Tax Measures Under Canada’s COVID-19 Economic Response Plan

In addition, where appropriate, the CRA will consider adopting a similar approach in determining the residency of a commercial trust.

  • Permanent establishment: Non-residents must pay tax on income from a business carried on in Canada. In general, a resident of a country with which Canada has a tax treaty is only liable to pay tax in Canada if the person’s activities meet the definition of “permanent establishment” in the treaty. When the employees of a non-resident entity are required to perform their duties in Canada due to travel restrictions, the CRA will not consider this alone to be sufficient to create a permanent establishment in Canada. The non-resident entity must still file a return for that year, however.

Also, where a dependent agent contracts in Canada on behalf of a non-resident entity during the travel restrictions, activities limited to the period during which the restrictions are in effect will not be considered sufficient to create a permanent establishment in Canada, as long as those activities would not otherwise have been performed in Canada.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58

Share