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.
Dear XXX
This is in reply to your letter of November 21, 1990, concerning taxation by Spain of fees earned by your company with respect to a contract to be entered into by your firm to provide XXX
We are not aware of any special tax concessions adopted by the Spanish Government with respect to foreign companies performing work for the XXX However, Article 7 of the Canada-Spain Income Tax Convention (copy attached) does provide that the business profits of a Canadian enterprise are only taxable in Canada unless the enterprise has a permanent establishment in Spain. As you state that your company XXX we presume that the Spanish tax authorities would exempt the fees earned by your firm on the basis of this provision.
Article 1 of the Convention (copy attached) provides that the Convention shall apply only to residents of one or both of the Contracting States. In as much as a resident of a Contracting State is defined in the Convention as being any person liable to tax in that State by reason of residence, place of management, etc., the Spanish tax authorities have the right to ask that the Canadian tax authorities confirm that your company is a resident of Canada and liable to tax here prior to granting any relief provided for in the Convention.
We have therefore forwarded a copy of your letter to Mr. Don Regimbald, Chief of Taxroll, (613) 954-9868, with a request that a certificate be issued to your company on an urgent basis.
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© Her Majesty the Queen in Right of Canada, 1990
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© Sa Majesté la Reine du Chef du Canada, 1990
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