Dear Sirs:
This is in reply to your letter dated March 19, 1991.
We acknowledge your advices of March 19, 1991 that our request for an advance income tax ruling on behalf of 24(1) set forth in your letter to us dated February 8, 1991 is withdrawn. An account for our time spent servicing your request for an advance income tax ruling shall be forwarded to you under separate cover.
As indicated to you previously by telephone, whether a resident of the United Kingdom has a permanent establishment in Canada for purposes of the Canada-United Kingdom Income Tax Convention (the "Convention") is essentially a question of fact that generally can only be determined retrospectively after all of the relevant facts have been determine and considered. It is also essentially a question of fact as to whether an agent is an "agent of independent status" and as to whether "persons are acting in the ordinary course of their business" within the meaning of these terms as used in paragraph 5 of Article 5 of the Convention.
We can, however, advise that it is our opinion that the fact that an enterprise of the United Kingdom carries on business in Canada through several agents (rather than merely one agent) of an independent status, where such persons are acting in the ordinary course of their business, does not in and of itself render paragraph 5 of Article 5 of the Convention inapplicable and does not in and of itself result in such enterprise of the United Kingdom being considered to have a permanent establishment in Canada.
The opinions expressed herein are not advance income tax rulings and, in accordance with paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, are not considered binding on the Department.
Yours truly,
Reorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch