Article 8 of the treaties provides an exemption to the permanent establishment rules to allow aircraft and ships that are operating internationally to have to profits attributed to their country of residence.
There is often an additional paragraph to exempt trips within a country. That makes sense - if you are taking a trip between Toronto and Ottawa or Vancouver and Victoria, that should be taxed in Canada regardless of where the company that owns the plane is resident.
However, this article should always be read carefully as many differences can be found in different treaties. For instance the Canada-Chile treaty indicates that it applies to enterprises of the specific countries but the Canada-China treaty requires the head office or place of effective management to be in the other country.
No comments:
Post a Comment