Business profits and permanent establishment — Articles V and VII · low-cost, fixed fee

Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the permanent-establishment article defines fixed places, dependent agents, construction sites and service presences, with carve-outs for preparatory activity.

That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.

It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.

Not automatically. The question is what that person is authorised to do and what they habitually do. A dependent agent who habitually plays the principal role leading to the conclusion of contracts can create an establishment with no office at all. Someone who only gathers market information, passes enquiries to head office and has every price and term settled abroad is closer to the preparatory activity the article carves out. The label on the contract matters less than the pattern of conduct across a year, so we read the quotations, the emails and the signature pages to see who actually committed the enterprise.

A fixed place of business is the classic route to an establishment, and premises you rent count as much as premises you own. But the article carves out activity of a preparatory or auxiliary character, and storage or display of goods belonging to the enterprise is the usual example given. So the answer depends on what happens inside the building. Storage feeding onward delivery is one thing; a warehouse where staff take orders, negotiate discounts and settle customer disputes is a place of business doing the core work of the enterprise. Write down what actually occurs there before concluding either way.

The permanent-establishment article sets a duration test for building sites and installation projects, and the length differs between treaties, so it has to be read out of the specific agreement in the version in force for the year. What catches people is the counting. Time generally runs from when work starts on site rather than from the date of the contract, and short interruptions for weather, permits or a subtrade that has not arrived do not usually reset the clock. Splitting one project between related companies to keep each below the threshold is the arrangement authorities examine hardest. Keep a dated site log from the first day.

No. Article VII limits Canada to the profits attributable to the establishment, not to everything the enterprise earns from Canadian customers. Sales concluded entirely from head office, with no involvement from the local operation, generally sit outside. Attribution treats the establishment as though it were a separate enterprise dealing at arm's length with the rest of the business, so it is credited with the functions it performs, the assets it uses and the risks it genuinely carries, and charged for what head office supplies. That analysis has to exist in writing before an auditor asks for it, because reconstructing it afterwards looks like advocacy rather than accounting.

Contemporaneous ones. Travel records showing who was in the country and for how long. The signature page of every contract, with the place of signing and the signatory named. The delegation of authority setting out who may commit the company. And the correspondence showing where terms were actually negotiated rather than where they were formally accepted. Schedules reconstructed from memory after a query arrives carry far less weight than a calendar and an expense file kept as you went. Where the position is finely balanced, the file you keep during the year is the thing that decides it two years later.

Yes. A subsidiary is a separate taxpayer and its existence alone does not make the parent taxable here. But the parent can still have an establishment through the subsidiary's premises or its people, if those people habitually act for the parent rather than for their own employer, or if the parent effectively has space at its disposal in the subsidiary's offices. Intercompany service agreements that do not describe what the staff actually do are the usual source of the problem, because the auditor reads the conduct and then reads the agreement, in that order.

Most treaties give building sites and installation projects their own rule, turning on how long the work continues rather than on whether an office exists. Time is generally counted per site, and related contracts split between group companies are commonly aggregated to stop the threshold being avoided by paperwork. The period differs between treaties, so it is read from the one that applies. See permanent establishment risk.

It tells a US payer that you are not a US person and, where you are entitled, claims the treaty rate on the income they are about to pay you — so withholding comes off at the reduced rate rather than the statutory one. It goes to the payer or the broker, never to the IRS, and it expires, so a stale form is a common cause of over-withholding. Getting it in before payment is the difference between a lower rate and a refund claim. See Form W-8BEN.