11 May 2012 External T.I. 2011-0428791E5 - Foreign Tax Credit -- summary under Article 24

Respecting a question as to the availability of a foreign tax credit for state franchise tax paid by a Canadian taxpayer (Canco), CRA (after indicating that the tax potentially would qualify for a credit), CRA went on to indicate that Article XXIV of the Canada-US Convention would not provided relief where the foreign tax credit was not available and the franchise tax was imposed notwithstanding the absence by Canco of a permanent establishment in the state (presumably given that the income in question would not be deemed to arise in the US under Art. XXIV, para. 3).