I-3, r. 1 - Regulation respecting the Taxation Act

Section 771r16 Disposition versions

2012-09-01

771R16. Despite section 771R14, where, in a taxation year, merchandise sold by a corporation is shipped to a country other than Canada in which the corporation has an establishment or is sold to a buyer whose establishment is situated in a country other than Canada in which the corporation has an establishment and who instructs the corporation to ship the merchandise to another person, and the corporation is not subject to taxation on its income under the laws of the other country, or its gross revenue derived from the sale of the merchandise is not included in computing the income or profit or other base for income or profits taxation by the other country, by reason of the provisions of any taxing statute of the other country or the operation of any tax treaty or convention between Canada and the other country, the following rules apply:

(a)  for the purposes of determining the gross revenue derived from the sale, the first and third paragraphs of section 771R15 are to be read without reference to “where the corporation has no establishment” and “in which the corporation has no establishment”, respectively; and

(b)  for the purposes of paragraph b of section 771R4, section 771R5 and the second paragraph of section 771R15, the salaries and wages paid by the corporation in the year to the employees of an establishment situated in the other country are deemed to be nil.

s. 771R8.1; O.C. 1631-96, s. 34; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.