The Taxation of Permanent Establishments in Canada

Abstract

This article was prepared for the Bulletin for International Taxation's Special Issue for the 63rd International Fiscal Association Congress. The article examines some of the main features of Canada's tax laws and policies regarding the taxation of permanent establishments (PEs). The article discusses the definition of PE in Canada's tax treaties and sets out the tax laws and policies on agency PEs and the entertainer and athlete PE fiction. The article also reviews Canada's approach to attributing profits to PEs under the recent OECD reform efforts. The article concludes tentatively that Canada appears to be following a worldwide trend of diluting the "fixed place of business" requirement for a traditional PE in order to address changing global commercial realities.

Keywords: tax, international tax, international trade, international investment

JEL Classification: H20, K34