A U.S.-incorporated resident of the U.S. for Treaty purposes (“Non-Resident Corporation”), whose shares were 50% owned by a non-resident artist whom it represented, presented various shows in Canadian provinces, and received a share of the revenues from the promoter. For each show, it (through its employees) had to install the stage, lights, sound system, etc. on the day of the show, and used a number of trailer trucks to transport the stage equipment.
Before finding that Non-Resident Corporation did not have a permanent establishment in any province for purposes of Part IV of the Regulations, the Directorate stated:
Article XVI of the Convention … applies without regard to, inter alia, Article VII of the Convention, and ... permits Canada to tax income derived by a non-resident company from performances in Canada without requiring that such income be earned through a permanent establishment in Canada under the Convention.