Can treaty SA/Canada allow Canadian Company to be exclusively taxed in SA? My client is ex Canada, re-enters his birth country South Africa, as ordinarily tax resident. His Canadian company is retained because of ongoing contracts and the source of the income is both Canadian and not Canadian. There is no more than a rep office to receive post and protect his artist rights, the effective management is undoubtedly SA.
Tax Professional Answers
Reading sub-article 5.5 it appears to me because the director is in SA, his presence and authority or role as director living in SA could deem the Canadian company to have a PE in SA in which case we need to carefully consider sub-section 7.1
Being the sole director is all the business not (sub-article 7.2) not conducted from SA?
After all each and every decision is made in SA and the answer would be to appoint a second director to ensure Canadian director deals with Canadian contracts? Perhaps I am too conservative or too narrow in my application of the attribution to the PE in SA as the attribution is more to the use of the IP in Canada than the making available the IP from SA by SA resident director?
Meet Leading Tax Advisors
Federal Tax Credits & Incentives Practice Leader
New York, NY
Managing Tax Consultant
Des Plaines, IL
Rancho Santa Fe, CA
President/ Tax And Financial Advisor
Managing Tax Lawyer
Tax Advisor/Fiduciary Coach
San Diego, CA
Senior Tax Principal
Daytona Beach, FL
Managing Tax Advisor/CEO