Art. 5(3)(b) of the Mexico-Canada Convention provides that a “permanent establishment” includes:
(b) the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if activities of that nature continue (for the same or a connected project) within a Contracting State for a period or periods aggregating more than six months within any twelve month period
Regarding how “six months” should be computed, the Directorate first noted that, as this was an undefined term, it was to be determined in accordance with “Canadian domestic tax law,” and then stated:
Considering that the testing period of six months is not required to be consecutive, the only reasonable interpretation of the term “periods aggregating more than” six months within any twelve month period” is to aggregate the number of days equivalent to the number of months.
This interpretation was supported by Art. 5(3)(b) of the 2001 UN Model Convention, on which Art. 5(3)(b) of the Canada-Mexico Treaty was based, in 2011 having replaced the previous “six months” test by a “183 days” test, and by Kayelle.
In summary, for the purpose of Article 5(3)(b) … the term “six months” generally means the aggregation of the number of days in six months … [being] 183 days … .