Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
942058
XXXXXXXXXX G. Middleton
Attention: XXXXXXXXXX
December 15, 1994
Dear Sirs:
This is in reply to your letter of July 25, 1994 concerning XXXXXXXXXX
You indicate that XXXXXXXXXX is a registered United States company operating in the United States and is considering having extra provincial registration in British Columbia. You asked us whether the income earned by XXXXXXXXXX from a branch office in Vancouver would be subject to tax in Canada.
Since the facts in your situation involve a particular taxpayer and an existing situation, we are unable to answer your questions because the Rulings Directorate does not provide opinions in respect of existing situations. For assistance in this matter, we suggest you contact the District Taxation Office in Vancouver for their views. We are prepared, however, to offer you the following general comments which relate to XXXXXXXXXX circumstances.
Where a United States company carries on business, or part of its business, in Canada through a fixed place of business, that is, a permanent establishment, located in Canada, the income in respect of the Canadian business is, in general, subject to tax in Canada.
It is always a question of fact whether such a company is carrying on business in Canada and whether it has a permanent establishment or fixed place of business in Canada as described in Article V of the Canada-United States Income Tax Convention, 1980 (the "U.S. Convention"). These determinations can only be made after examining all of the circumstances; considering the relevant legislation (e.g. the definition of "business" in subsection 248(1) of the Income Tax Act (the "Act"), the extended meaning of "carrying on business" in section 253 of the Act and Article V of the U.S. Convention); and reviewing the jurisprudence, literature and commentaries on these issues.
We have enclosed some material which may be of interest to you. If you require additional information, we suggest you contact the Vancouver District Taxation Office at (1-800-663-1511).
We trust our comments will be of assistance to you.
Yours truly,
for Director
Reorganizations and Foreign Division
Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1994
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1994