Income Tax Regulations

8201 For the purposes of subsection 16.1(1), the definition outstanding debts to specified non-residents in subsection 18(5), the definition excluded income and excluded revenue in subsection 95(2.5), subsections 100(1.3), 112(2), 125.4(1) and 125.5(1), the definition taxable supplier in subsection 127(9), subparagraph 128.1(4)(b)(ii), paragraphs 181.3(5)(a) and 190.14(2)(b), the definition Canadian banking business in subsection 248(1) and paragraph 260(5)(a) of the Act, a permanent establishment of a person or partnership (either of whom is referred to in this section as the “person”) means a fixed place of business of the person, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse if the person has a fixed place of business and, if the person does not have any fixed place of business, the principal place at which the person’s business is conducted, and

• (a) where the person carries on business through an employee or agent, established in a particular place, who has general authority to contract for the person or who has a stock of merchandise owned by the person from which the employee or agent regularly fills orders, the person shall be deemed to have a permanent establishment at that place,

• (b) where the person is an insurance corporation, the person is deemed to have a permanent establishment in each country in which the person is registered or licensed to do business,

• (c) where the person uses substantial machinery or equipment at a particular place at any time in a taxation year, the person shall be deemed to have a permanent establishment at that place,

• (d) the fact that the person has business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the person has a permanent establishment, and

• (e) where the person is a corporation, the fact that the person has a subsidiary controlled corporation at a place or a subsidiary controlled corporation engaged in trade or business at a place shall not of itself be held to mean that the person is operating a permanent establishment at that place,

except that, where the person is resident in a country with which the Government of Canada has concluded a tax treaty in which the expression “permanent establishment” is given a particular meaning, that meaning shall apply.