Summary under Treaties - Art. 10.
Principal Issues: How does Article X(6) and Article IV(6) of the Canada-United States Income Tax Convention (1980) (the “Treaty”) impact a US limited liability company (“LLC”) carrying on business in Canada through a permanent establishment?
Position: The Treaty benefits may be available to the LLC with respect to income considered to be derived by corporate members of an LLC but not to individual members.
Reasons: The LLC has only one $500,000 exemption. There is no provision in the Treaty that is equivalent to Article X(6) for individual members of an LLC.