INCOME TAX |
Non-Residents |
Canada v. Dudney
A-707-98
Sharlow J.A.
24/2/00
13 pp.
Appeal from Tax Court's decision ((1998), 99 DTC 147) respondent exempt from taxation under Canada-United States Income Tax Convention (1980), Art. XIV--Under Art. XIV individual liable to taxation if having fixed base regularly available to him--Respondent resident of United States--In 1994, 1995, earned income by performing certain services in Canada as independent contractor--Training employees of PanCanadian Petroleum Limited (PanCan) at PanCan's premises in Calgary--Given small room from which to work--Three months later moved to larger room which shared with other consultants--Later moved to another room also occupied by PanCan--Actual training taking place in offices of trainees, or in conference room--Use of space provided to trainers strictly limited--Available to them for purpose of contract only--Access to building controlled by magnetic card system, restricted to business hours, on week days only--Appellant not having business cards, letterhead identifying his place of business as PanCan--Not identified as working in PanCan premises on directory in lobby--Crown taking position Art. XIV not applicable, assessing tax--Tax Court allowing appeal, ordering reassessments vacated--Appeal dismissed--"Fixed base regularly available to him" not defined in Convention--Application of Art. XIV determined on case-by-case basis--Literal, legalistic interpretation to be avoided--Art. XIV considered in context within Convention--Travaux préparatoires, including OECD Model Conventions, commentaries, case law also considered--Where person denied benefit of Art. XIV on basis having fixed base regularly available to him in Canada, must ask whether person carried on business at that location during relevant period--Factors to be considered including, but not limited to, whether and by what legal right person exercised or could exercise control over premises, degree to which premises objectively identified with person's business--Evidence as whole supporting conclusion premises of PanCan not location through which respondent carrying on business--Although had access to offices of PanCan and had right to use them, could do so only during PanCan's office hours and only for purpose of performing services for PanCan required by contract--No right to use PanCan's offices as base for operation of own business--Could not, did not use PanCan's offices as own--Recognition of fact providers of independent personal services who, because of skill or services provide, require little in way of fixed place of business not justifying conclusion respondent must necessarily have fixed place of business wherever services provided--If PanCan's premises found to constitute respondent's place of business, duration of contract might have indicated place of business there permanent--However question of permanence not arising on facts herein--Convention Between Canada and the United States of America With Respect to Taxes on Income and on Capital, being Schedule I of Canada-United States Convention Act, 1984, S.C. 1984, c. 20, Art. XIV.