14.2.2[a] Independent Personal Services
Article XIV governs income earned by an individual from independent personal services. Any type of business or professional activity could qualify as an independent personal service provided that it is rendered by the individual in the capacity as a self-employed, independent contractor.
14.2.2[b] Fixed Base
Article XIV provides that income earned by an individual in respect of independent personal services can be taxed both in the State of residence and in the source State. However, the source state will only be permitted to tax the income if the individual has or has a fixed base regularly available to him in the source State, and only to the extent that the income is attributable to that fixed base.
14.2.2[c] Income Attributable
Even where a resident of one Contracting State renders independent personal services in the other Contracting State through a fixed base situated in the source State, the source State may only tax the income from such services to the extent that the income is attributable to the fixed base.
Section 4 of the Income Tax Conventions Interpretation Act provides that the determination of profits that are attributable or allocable to a permanent establishment should be computed on the same basis that a person resident in Canada would be required to compute income from a business for the purposes of the Act.
Advisor’s Guide to Canada – U.S. Tax Treaty
By: Vitaly Timokhov, Raymond Montero, David Kerzner
Published by: Thomson Carswell
The Accounting and Tax