,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,numb]3 ,,it-#agg;,r#b 7,3solidat$7
,date3 ,see ,bullet9 ,revi.ns sec;n
,subject3 ,9come ,tax ,act--,p]man5t
  ,e/abli%;t (a ,corpor,n 9 a ,prov9ce
,ref];e3 ,subsec;ns #abd7#a7 & #abd7#d7
  (! ,9come ,tax ,act 7! 8,act07 &
  subsec;n #djj7#b7 (! ,9come ,tax
  ,regul,ns 7! 8,regul,ns07

  ,late/ ,revi.ns--,title1 ,ref];e1
,3t5ts1 ,applic,n & ,summ>y sec;ns &
p>agraphs #a-d1 & #g
  ,at ! ,canada ,cu/oms & ,rev5ue ,ag5cy
7,,ccra71 we issue 9come tax 9t]pret,n
bullet9s 7,,it's7 9 ord] 6provide
te*nical 9t]pret,ns & posi;ns reg>d+
c]ta9 provi.ns 3ta9$ 9 9come tax law4
,due 6_! te*nical nature1 ,,it's >e us$
prim>ily 0\r /aff1 tax speciali/s1 & o!r
9dividuals :o h an 9t]e/ 9 tax        #a
          ,,it-#agg;,r#b;,con        a#a
matt]s4 ,= ^? r1d]s :o pref] a less
te*nical explan,n (! law1 we (f] o!r
public,ns1 s* z tax guides & pamphlets4
  ,:ile ! -;ts 9 a "picul> p>agraph 9 an
,,it may relate 6provi.ns (! law 9 =ce
at ! "t !y 7 made1 s* -;ts >e n a
sub/itute =! law4 ,! r1d] %d1 "!=e1
3sid] s* -;ts 9 li<t (! relevant
provi.ns (! law 9 =ce =! "picul> tax,n
ye> 2+ 3sid]$1 tak+ 96a3.t ! e6ect ( any
relevant am5d;ts 6^? provi.ns or
relevant c\rt deci.ns o3urr+ af ! date
on : ! -;ts 7 made4
  ,subject 6! abv1 an 9t]pret,n or
posi;n 3ta9$ 9 an ,,it g5],y applies z
(! date on : x 0 publi%$1 un.s o!rwise
specifi$4 ,if "! is a subsequ5t *ange 9
t 9t]pret,n or posi;n &! *ange is
b5eficial 6taxpay]s1 x is usu,y e6ective
= future assess;ts & reassess;ts4 ,if1
on ! o!r h&1 ! *ange is n fav\ra#
6taxpay]s1 x w norm,y 2 e6ective =!
curr5t & subsequ5t tax,n ye>s or =
                                      #b
          ,,it-#agg;,r#b;,con        b#a
transac;ns 5t]$ 96af ! date on : ! *ange
is publi%$4
  ,mo/ ( \r public,ns >e availa# on \r
,web site at3 _+www.ccra.gc.ca_:
  ,if y h any -;ts reg>d+ matt]s 4cuss$
9 an ,,it1 pl1se s5d !m to3

  ,manag]1 ,te*nical ,public,ns &
    ,projects ,sec;n
  ,9come ,tax ,rul+s ,directorate
  ,policy & ,legisl,n ,bran*
  ,canada ,cu/oms & ,rev5ue ,ag5cy
  ,ottawa ,,on
  ,k#a;,a #j;,l#e

  or 0email at ! foll[+ a4ress3
_+bulletins@ccra.gc.ca_:
  ,? v].n is only availa# electronic,y4





                                      #c
                 ,3t5ts              c#a
    
,applic,n
,summ>y
,4cus.n & ,9t]pret,n
  ,def9i;n 7p>agraph #a7
  ,det]m9,n 7p>agraph #b7
  ,fix$ ,place ( ,busi;s 7p>agraph #c7
  ,employee or ,ag5t 7p>agraphs #d-e7
  ,sub/antial ,usage ( ,ma*9]y or
    ,equip;t 7p>agraph #f7
  ,r5tal ,op],n 7p>agraph #g7
  ,subsidi>y (a ,corpor,n 7p>agraph #h7
,bullet9 ,revi.ns

               ,applic,n
    
  ,? bullet9 is a 3solid,n (! foll[+3
    --,9t]pret,n ,bullet9 ,,it-#agg;,r#b
      dat$ ,may #d1 #aihd2
    --,special ,rel1se 6,,it-#agg;,r#b
      dat$ ,augu/ #be1 #aiie2 &
    --subsequ5t am5d;ts "!to4
  ,= fur!r "picul>s1 see ! 8,bullet9
,revi.n0 sec;n ne> ! 5d ( ?           #d
          ,,it-#agg;,r#b;,con        d#a
bullet94 ,un.s o!rwise /at$1 all
/atutory ref];es "?\t ! bullet9 >e 6!
,act4

                ,summ>y
    
  ,9 ord] =a corpor,n 6h 8taxa# 9come
e>n$ 9 ! ye> 9 a prov9ce01 x is nec
6det]m9e :e!r x has a p]man5t e/abli%;t
9 t prov9ce 9 ! ye>4 ,a corpor,n w h a
p]man5t e/abli%;t 9 a prov9ce if x has a
fix$ place ( busi;s "!4 ,x may al h a
p]man5t e/abli%;t 9 c]ta9 o!r
circum/.es1 s* z :5 x c>ries on busi;s
"? an employee or ag5t1 or uses
sub/antial ma*9]y or equip;t 9 a
prov9ce4 ,": a corpor,n has a p]man5t
e/abli%;t 9 a prov9ce 9 a ye>1 #aj@3p (
xs taxa# 9come e>n$ 9 ! ye> 9 t prov9ce
may 2 deduct$ f xs ,"p ;,i tax o!rwise
paya#4


                                      #e
          ,4cus.n & ,9t]pret,n        #b
    
         ,def9i;n 7p>agraph #a7
    
#a4 ,! t]m 8p]man5t e/abli%;t0 is def9$
  9 subsec;n #djj7#b7 (! ,regul,ns 9
  3nec;n )! det]m9,n ( 8taxa# 9come e>n$
  9 ! ye> 9 a prov9ce0 7z def9$ 9
  subsec;n #abd7#d77 = purposes (!
  deduc;n "u subsec;n #abd7#a74

        ,det]m9,n 7p>agraph #b7
    
#b4 ,6det]m9e if a corpor,n has a
  p]man5t e/abli%;t 9 a prov9ce1 x is
  nec 6see if ! corpor,n meets any (!
  crit]ia 9 subsec;n #djj7#b7 (!
  ,regul,ns4 ,? w (t5 9volve "qs ( fact
  : m/ 2 answ]$ 0! circum/.es ( ea*
  case4 ,an e/abli%;t 9 a prov9ce is n a
  8p]man5t e/abli%;t0 z 3templat$ 9 !
  ,regul,ns un.s a busi;s is 3nect$ ) x4
  ,[n]%ip 0! corpor,n (a f>m1 timb] l&1
  factory or a "w%op does n 3/itute a
  p]man5t e/abli%;t (! corpor,n       #f
          ,,it-#agg;,r#b;,con        a#b
  un.s x is us$ 9 xs busi;s4 ,h["e1 if a
  corpor,n o!rwise has a p]man5t
  e/abli%;t 9 ,canada & [ns l& 9 a
  prov9ce1 s* l& is deem$ 6be a p]man5t
  e/abli%;t4 ,=! purpose ( det]m9+ :e!r
  a non-resid5t corpor,n has a busi;s 9
  a prov9ce1 x %d 2 not$ t ! deem+ rules
  9 sec;n #bec apply4

         ,fix$ ,place ( ,busi;s
             7p>agraph #c7
    
#c4 ,if a corpor,n has a fix$ place (
  busi;s 9 a prov9ce1 x has a p]man5t
  e/abli%;t ac 6! ,regul,ns4 ,a fix$
  place ( busi;s may 9clude a place1
  plant or natural res\rce us$ 9 ! "d-
  to-"d busi;s (! corpor,n4 ,x does n
  m1n t ! place ( busi;s m/ exi/ =a l;g
  "t or 2 locat$ 9 a dura# build+2 =
  9/.e1 a tempor>y field (fice on a
  3/ruc;n site cd 2 a fix$ place (
  busi;s4
                                      #g
          ,,it-#agg;,r#b;,con        b#b
  ,examples ( fix$ places ( busi;s >e
  set \ 9 subsec;n #djj7#b7 (! ,regul,ns
  b ^! >e n exclusive nor >e !y
  absolute4 ,a public w>eh\se t is us$
  0a corpor,n1 b t is nei [n$ 0x nor "u
  "s m1sure ( xs 3trol1 does n 3/itute
  0xf a p]man5t e/abli%;t ( t corpor,n4
  ,an (fice t is ma9ta9$ & 3troll$ 0an
  employee (! corpor,n at ! employee's
  *oice & exp5se or an (fice t is
  ma9ta9$ solely 6pur*ase m]*&ise is n 9
  xf deem$ 6be a p]man5t e/abli%;t (!
  corpor,n4 ,": a corpor,n does n h .any
  fix$ place ( busi;s 7in or \tside
  ,canada71 x w h a p]man5t e/abli%;t 9
  ! pr9cipal place 9 : ! corpor,n's
  busi;s is 3duct$4

     ,employee or ,ag5t 7p>agraphs
                 #d-e7
    
#d4 ,if a corpor,n does n h a fix$ place
  ( busi;s 9 a prov9ce1 x may / h a
  p]man5t e/abli%;t 9 ! prov9ce if    #h
          ,,it-#agg;,r#b;,con        c#b
  x satisfies any (! o!r crit]ia li/$ 9
  subsec;n #djj7#b7 (! ,regul,ns4 ,a
  corpor,n is deem$ 6h a p]man5t
  e/abli%;t 9 a "picul> place if x
  c>ries on busi;s "? an employee or
  ag5t e/abli%$ 9 t place )a g5]al
  au?or;y 63tract on 2half (! corpor,n4
  ,! fact t a corpor,n has busi;s d1l+s
  9 a "picul> place "? a -mis.n ag5t1
  brok] or o!r 9dep5d5t ag5t is n 9 xf 5
  6result 9 a p]man5t e/abli%;t4 ,h["e1
  "! is no?+ 9 ! law : excludes a -mis.n
  ag5t1 brok] or o!r 9dep5d5t ag5t f !
  ref];e 6an 8ag5t0 9 ! abv-m5;n$ deem+
  rule4 ,"!=e1 a p]man5t e/abli%;t wd 2
  deem$ 6exi/ 9 a "picul> place ": a
  corpor,n c>ries on busi;s "? s* an
  ag5t :o is e/abli%$ 9 t place & has
  g5]al au?or;y 63tract =! corpor,n4
#e4 ,a corpor,n w al 2 deem$ 6h a
  p]man5t e/abli%;t if an employee or
  ag5t1 e/abli%$ 9 a "picul> place1 has
  a /ock ( gds [n$ 0! corpor,n f : !
  employee or ag5t regul>ly fills     #i
          ,,it-#agg;,r#b;,con        d#b
  ord]s4 ,! ord]s may 2 rcvd directly f
  ! corpor,n or may -e f ! cu/om]s !mvs4
  8,regul>ly0 is tak5 6m1n rep1t$ly ac
  6an e/abli%$ patt]n4 ,a corpor,n :
  transacts all xs busi;s f a s\rce
  \tside ! prov9ce "? mail ord] &
  catalogue sales & does n h a /ock (
  gds 9 ! prov9ce w n usu,y h a p]man5t
  e/abli%;t 9 t prov9ce4

      ,sub/antial ,usage ( ,ma*9]y
       or ,equip;t 7p>agraph #f7
    
#f4 ,a corpor,n t uses sub/antial ma*9]y
  or equip;t 9 a "picul> place 9 a
  prov9ce w 2 deem$ 6h a p]man5t
  e/abli%;t 9 t prov9ce4 ,! corpor,n ne$
  n [n ! ma*9]y or equip;t t x uses4 ,!
  size1 quant;y & doll> value ( ma*9]y
  or equip;t us$ 9 ! "picul> place >e "s
  (! crit]ia 6be 3sid]$ 9 ! det]m9,n (
  8sub/antial04 ,a -p>ison (! total or
  type ( ma*9]y or equip;t us$ 0!
  corpor,n z a :ole ) t us$ 9 !      #aj
          ,,it-#agg;,r#b;,con        e#b
  "picul> place is n relevant4 ,ano!r
  factor t may 2 tak5 96a3.t 9 !
  det]m9,n is :e!r ! sd ma*9]y or
  equip;t 3tributes sub/anti,y 6! g5],n
  (! gross 9come (! corpor,n e>n$ at !
  "picul> place4 ,! 4play or demon/r,n (
  ma*9]y or equip;t 0an ag5t is n a use
  z 3templat$ 0subsec;n #djj7#b7 (!
  ,regul,ns4 ,a p]man5t e/abli%;t w n 2
  3sid]$ 6exi/ 9 a prov9ce solely 0r1son
  (! fact t a bus or truck travell$ "? t
  prov9ce4

      ,r5tal ,op],n 7p>agraph #g7
    
#g4 ,x is a "q ( fact :e!r a r5tal op],n
  3/itutes ! c>ry+ on (a busi;s or :e!r
  r5ts rcvd 3/itute 9come f prop]ty4
  ,g5],y1 subject
--------------------------------------#c
  6! -;ts 9 ! curr5t v].n ( ,,it-#dbj1
  ,non-,resid5ts--,9come ,e>n$ 9
  ,canada1 r5tal 9come (a corpor,n w 2
  3sid]$ 63/itute 9come f a          #aa
          ,,it-#agg;,r#b;,con        a#c
  busi;s4 ,if a corpor,n has r5tal 9come
  f r1l e/ate t is 9come f a busi;s1 !
  corpor,n w h a p]man5t e/abli%;t 9 ea*
  prov9ce 9 : x has a r5tal prop]ty 2c
  ea* prop]ty w 2 3sid]$ a fix$ place (
  busi;s4 ,if a corpor,n has r5tal 9come
  f o!r busi;s op],ns1 a p]man5t
  e/abli%;t = ^? op],ns may or may n
  exi/ 9 a3ord.e )! rules 4cuss$ 9 ?
  bullet91 dep5d+ on ! facts (! case4

        ,subsidi>y (a ,corpor,n
             7p>agraph #h7
    
#h4 ,a corpor,n's subsidi>y 9 a prov9ce
  or a subsidi>y 5gag$ 9 trade or busi;s
  9 a prov9ce does n 9 xf 3/itute a
  p]man5t e/abli%;t (! corpor,n4 ,h["e1
  ! subsidi>y may 2 an ag5t (! corpor,n
  ) g5]al au?or;y 63tract on xs 2half1 9
  : case ! corpor,n wd 2 deem$ 6h a
  p]man5t e/abli%;t 9 ! prov9ce 7z
  describ$ 9 p>agraph #d74
                                     #ab
           ,bullet9 ,revi.ns          #d
    
  ,s9ce ! issu.e ( ,,it-#agg;,r#b on
,may #d1 #aihd1 "! h be5 no significant
revi.ns 6p>agraphs #b1 #e1 #f & #h4
  ,! ref];e 9 ! title (! previ\s bullet9
to 8a =eign 5t]prise 9 ,canada0 has be5
delet$ 9 ord] 6cl>ify t ? bullet9 d1ls
)! det]m9,n ( p]man5t e/abli%;ts =
prov9cial alloc,n purposes only4
,7,novemb] #aa1 #bjjc7'
  ,! ,ref];e sec;n has be5 *ang$ 6m
a3urately reflect ! 3t5t (! bullet94
,7,novemb] #aa1 #bjjc7'
  8,3t5t01 8,applic,n0 & 8,summ>y0
sec;ns h be5 a4$ 6! bullet91 z well z
h1d+s abv c]ta9 p>agraphs4 ,7,novemb]
#aa1 #bjjc7'
  ,p>agraph #a has be5 modifi$ 6delete !
la/ s5t;e 2c ! bullet9 is n 9t5d$ 6d1l )
:e!r a =eign 5t]prise has a p]man5t
e/abli%;t 9 ,canada4 ,9 a4i;n1 a ref];e
6subsec;n #abd7#d7 (! ,act has be5 a4$4
,7,novemb] #aa1 #bjjc7'
                                     #ac
          ,,it-#agg;,r#b;,con        a#d
  ,! la/ s5t;e ( p>agraph #b has be5
revis$ 6cl>ify xs m1n+4 ,7,novemb] #aa1
#bjjc7'
  ,9 p>agraph #c1 a s5t;e has be5 a4$ :
d1ls )! situ,n describ$ 9 p>agraph
#djj7#b77a7 (! ,regul,ns4 ,7,novemb]
#aa1 #bjjc7'
  ,p>agraphs #d & #g h be5 modifi$ 0!
,special ,rel1se 6,,it-#agg;,r#b1 dat$
,augu/ #be1 #aiie4
  ,! la/ s5t;e ( p>agraph #d has be5
*ang$ 9 ord] 6cl>ify xs m1n+4 ,7,novemb]
#aa1 #bjjc7'
  ,-;ts 9 p>agraph #g h be5 revis$
69dicate t !y only apply 9 det]m9+ :e!r
a corpor,n's r5tal op],n w 3/itute a
p]man5t e/abli%;t 9 a prov9ce4
,7,novemb] #aa1 #bjjc7'
  ,"?\t ! bullet91 we h revis$ ! ref];es
to 8,regul,n #djj0 to 8subsec;n #djj7#b7
(! ,regul,ns0 9 ord] 6be m te*nic,y
precise4 ,7,novemb] #aa1 #bjjc7'

                                     #ad