5. Newfoundland & Labrador -

5. Newfoundland & Labrador

Newfoundland & Labrador defines a “permanent establishment” (by reference to Federal regulations) as a fixed place of business of the corporation. This specifically includes an office, a branch, a mine, an oil well, a farm, timber land, a factory, a workshop or a warehouse. The following series of rules is provided:

  • where the corporation does not have any fixed place of business, “permanent establishment” means the principal place in which the corporation’s business is conducted;
  • where a corporation carries on business through an employee or agent established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the corporation shall be deemed to have a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business;
  • where a corporation, otherwise having a permanent establishment in Canada, owns land in a province, such land shall be deemed to be a permanent establishment;
  • where a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year, it shall be deemed to have a permanent establishment in that place;
  • if, under the above rules, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;
  • the fact that a corporation had business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment; and
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place.

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