27 May 1992 Administrative Letter 9210786 F - Offshore Articles - Deemed P.E.'S

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.

May 27, 1992

International Tax ProgramsRulings DirectorateC.G. ToussaintDirector General

Attention: John Fennelly

Offshore Activities - 24(1)

Canada-United Kingdom Income Tax Convention (the "treaty")

This is in reply to your memorandum of April 6, 1992 in which you requested confirmation of our previous comments made in our memorandum of July 12, 1991 regarding Article XXVIIA of the treaty.  It is our understanding that representatives of 24(1) are of the view that our interpretation of the Article is far too broad and beyond the intent of the treaty parties.

We agree with you that the representation has provided no additional facts which would change our opinion as provided in our earlier memorandum.  Furthermore, as you are aware, the views of the U.K. tax authorities (ie. in regard to the meaning of "activities" and "in connection with" as used in Article XXVIIA) were requested by Provincial and International Relations Division (at your request) and their reply basically confirmed the position we had taken.

In the memorandum to your directorate on February 24th from the St. John's D.O., Mr. Hillier has indicated that the representative will be forwarding him information concerning the U.K.'s interpretation of the offshore article.  If you wish, we will review such information if and when it is received.

for DirectorReorganizations and Foreign DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch