Generally, a foreign business which is resident in a country with which Canada has a tax treaty can have an independent sales representative organization in Canada by way of distribution arrangements, or can enter into sales contracts to supply goods or services to Canadians, without being liable to Canadian income tax on its profits from such sales. Care must be taken to ensure that the foreign entity does not maintain a permanent establishment in Canada. In addition, its Canadian broker or agent must be independent of the foreign business organization, and not devote all or almost all of its efforts to representing the foreign business.
A foreign business will be liable for Canadian income tax if it has a dependent agent or broker in Canada, with authority to negotiate and conclude contracts in its name.
In addition, certain bilateral tax treaties provide that a foreign business can store its products in Canada for purposes of display or delivery, or to maintain an office in Canada solely for the purpose of purchasing Canadian goods, or for collecting information without becoming liable for Canadian income tax.
Additional posts from the blog
On February 6, 2014, the Ontario Securities Commission (“OSC”) released OSC Staff Notice 51-722 Report on a Review of Mining Issuers’ Management’s Discussion and Analysis Guidance (the “Report”). The Report summarizes the results of a review conducted by the OSC of the annual and interim Management’s Discussion and Analysis (MD&A) filed by 100 mining companies with market capitalization of less than $100 million (the “Review”) and is designed to serve as a tool to assist small mining companies to navigate regulatory requirements.
Alberta Securities Commission publishes Staff Notice 91-704 Over-the-Counter Derivatives Transactions
On January 2, 2014, Alberta Securities Commission (“ASC”) staff published Staff Notice 91-704 Over-the-Counter Derivatives Transactions (“ASC Staff Notice 91-704”) summarizing the current regulatory framework governing over-the-counter (“OTC”) derivatives trades in Alberta.
On December 18, 2013, Hydro-Québec Distribution (“HQD”) officially launched call for tenders A/O 2013-01 for the purchase of a 450 MW block of wind power (“A/O 2013-01”).