Triskelion – Tax Court of Canada leaves open the argument that days cannot be counted twice under the 183-day test for a services PE under the Canada-US Treaty
A U.S.-resident corporation provided 198 days of consulting services in Canada in 2015 and 54 days in 2016 respecting a 12-month Canadian construction project commencing in March 2015. Spiro J found that the taxpayer had a “services” permanent establishment in Canada in 2016 under Art. V(9) of the Canada-U.S. Tax Treaty, which referenced a test that “the services are provided in [Canada] for an aggregate of 183 days or more in any twelve-month period with respect to the [Canadian project]” – so that there was a services PE based on the taxpayer’s Canadian services provided during the 12-month period ending in March 2016.
Spiro J rejected the taxpayer’s argument, that the Minister had “counted 183 of the 198 days during which the Appellant provided consulting services in Canada in 2015” so “that the Minister was entitled to carry over only 15 days from her 2015 computation in determining whether the Appellant had a ‘deemed services PE’ in Canada for its 2016 taxation year,” on the basis of that there was no indication in the record that the taxpayer’s 2015 taxation year had been assessed - and went on to state that “the Court … makes no comment on whether such an argument might prevail on a different evidentiary record.”
Neal Armstrong. Summary of Triskelion Projects International Inc. v. The Queen, 2022 TCC 63 under Treaties – Income Tax Conventions – Art. 5.