Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2014-09-15 and last amended on 2014-06-19. Previous Versions

Non-Residents

  •  (1) Subject to subsection (2), if an individual does not reside in Canada at any time in a taxation year, the individual’s income earned in the taxation year in a province is the total of

    • (a) the portion of the taxpayer’s income from an office or employment that is included in the taxpayer’s taxable income earned in Canada for the taxation year under subparagraph 115(1)(a)(i) of the Act and that is reasonably attributable to the duties performed by the taxpayer the province; and

    • (b) the taxpayer’s income for the taxation year from carrying on business earned in the province, determined in accordance with this Part.

  • (2) Where the aggregate of the amounts of an individual’s income as determined under subsection (1) for all provinces for a taxation year exceeds the aggregate of the amounts of his income described in subparagraphs 115(1)(a)(i) and (ii) of the Act, the amount of his income earned in the taxation year in a particular province shall be that proportion of his income so described that the amount of his income earned in the taxation year in the province as determined under subsection (1) is of the aggregate of all such amounts.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/2010-93, s. 20.

Income from Business

  •  (1) Where, in a taxation year, an individual had a permanent establishment in a particular province or a country other than Canada and had no permanent establishment outside that province or country, the whole of his income from carrying on business for the year shall be deemed to have been earned therein.

  • (2) Where, in a taxation year, an individual had no permanent establishment in a particular province or country other than Canada, no part of his income for the year from carrying on business shall be deemed to have been earned therein.

  • (3) Except as otherwise provided, where, in a taxation year, an individual had a permanent establishment in a particular province or in a particular country other than Canada and had a permanent establishment outside that particular province or particular country, the amount of the individual’s income for the taxation year from carrying on business that is deemed to have been earned in the particular province or particular country is half of the total of

    • (a) that proportion of the individual’s income for the year from carrying on business that the gross revenue for the fiscal period that ends in the taxation year that is reasonably attributable to the permanent establishment in the particular province or particular country is of the individual’s total gross revenue for that period from the business; and

    • (b) that proportion of the individual’s income for the taxation year from carrying on business that the total of all amounts that are salaries and wages paid in the fiscal period that ends in the taxation year to employees of the permanent establishment in the particular province or particular country is of the total of all amounts that are salaries and wages paid in that period to employees of the business.

  • (4) For the purpose of determining the gross revenue for the year reasonably attributable to the permanent establishment in a particular province or country other than Canada within the meaning of paragraph (3)(a), the following rules shall apply:

    • (a) where the destination of a shipment of merchandise to a customer to whom the merchandise is sold is in the particular province or country, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province or country;

    • (b) except as provided in paragraph (c), where the destination of a shipment of merchandise to a customer to whom the merchandise is sold is in a province or country other than Canada in which the taxpayer has no permanent establishment, if the person negotiating the sale may reasonably be regarded as being attached to the permanent establishment in the particular province or country, the gross revenue derived therefrom shall be attributable to that permanent establishment;

    • (c) where the destination of a shipment of merchandise to a customer to whom the merchandise is sold is in a country other than Canada in which the taxpayer has no permanent establishment,

      • (i) if the merchandise was produced or manufactured, or produced and manufactured, entirely in the particular province by the taxpayer, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province, or

      • (ii) if the merchandise was produced or manufactured, or produced and manufactured, partly in the particular province and partly in another place by the taxpayer, the gross revenue derived therefrom attributable to the permanent establishment in the province shall be that proportion thereof that the salaries and wages paid in the year to employees of the permanent establishment in the province where the merchandise was partly produced or manufactured (or partly produced and manufactured) is of the aggregate of the salaries and wages paid in the year to employees of the permanent establishments where the merchandise was produced or manufactured (or produced and manufactured);

    • (d) where a customer to whom merchandise is sold instructs that shipment be made to some other person and the customer’s office with which the sale was negotiated is located in the particular province or country, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province or country;

    • (e) except as provided in paragraph (f), where a customer to whom merchandise is sold instructs that shipment be made to some other person and the customer’s office with which the sale was negotiated is located in a province or country other than Canada in which the taxpayer has no permanent establishment, if the person negotiating the sale may reasonably be regarded as being attached to the permanent establishment in the particular province or country, the gross revenue derived therefrom shall be attributable to that permanent establishment;

    • (f) where a customer to whom merchandise is sold instructs that shipment be made to some other person and the customer’s office with which the sale was negotiated is located in a country other than Canada in which the taxpayer has no permanent establishment,

      • (i) if the merchandise was produced or manufactured, or produced and manufactured, entirely in the particular province by the taxpayer, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province, or

      • (ii) if the merchandise was produced or manufactured, or produced and manufactured, partly in the particular province and partly in another place by the taxpayer, the gross revenue derived therefrom attributable to the permanent establishment in the province shall be that proportion thereof that the salaries and wages paid in the year to employees of the permanent establishment in the province where the merchandise was partly produced or manufactured (or partly produced and manufactured) is of the aggregate of the salaries and wages paid in the year to employees of the permanent establishments where the merchandise was produced or manufactured (or produced and manufactured);

    • (g) where gross revenue is derived from services rendered in the particular province or country, the gross revenue shall be attributable to the permanent establishment in the province or country;

    • (h) where gross revenue is derived from services rendered in a province or country other than Canada in which the taxpayer has no permanent establishment, if the person negotiating the contract may reasonably be regarded as being attached to the permanent establishment of the taxpayer in the particular province or country, the gross revenue shall be attributable to that permanent establishment;

    • (i) where standing timber or the right to cut standing timber is sold and the timber limit on which the timber is standing is in the particular province or country, the gross revenue from such sale shall be attributable to the permanent establishment of the taxpayer in the province or country; and

    • (j) where land is a permanent establishment of the taxpayer in the particular province, the gross revenue which arises from leasing the land shall be attributable to that permanent establishment.

  • (5) Where an individual pays a fee to another person under an agreement pursuant to which that other person or employees of that other person perform services for the individual that would normally be performed by employees of the individual, the fee so paid shall be deemed to be salary paid by the individual and that part of the fee that may reasonably be regarded as payment in respect of services rendered at a particular permanent establishment of the individual shall be deemed to be salary paid to an employee of that permanent establishment.

  • (6) For the purposes of subsection (5), a fee does not include a commission paid to a person who is not an employee of the individual.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/94-686, s. 81(F);
  • SOR/2011-195, s. 7.