The Double Taxation Relief (Taxes on Income) (Canada) Order 1980

ARTICLE 22 Non-Discrimination

1.  The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

2.  The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging either Contracting State to grant to individuals not resident in its territory those personal allowances and reliefs for tax purposes which are by law available only to individuals who are so resident.

3.  Subject to the provisions of paragraph 4 of this Article, nothing in this Convention shall be construed as preventing a Contracting State from imposing on the earnings attributable to a permanent establishment in that State of a company which is a resident of the other Contracting State, tax in addition to the tax which would be chargeable on the earnings of a company which is a resident of the first-mentioned State, provided that the rate of any additional tax so imposed shall not exceed the lesser of:

(a) 15 per cent of the amount of such earnings which have not been subjected to such additional tax in previous taxation years, and

(b) the rate specified in respect of such additional tax in any agreement or convention entered into by Canada with any third State.

For the purposes of this provision, the term “earnings” means an amount not in excess of the profits attributable to a permanent establishment in a Contracting State in a year and previous years after deducting therefrom all taxes, other than the additional tax referred to herein, imposed on such profits in that State.

4.  The provisions of paragraph 3 of this Article shall not apply where the profits attributable to a permanent establishment in a year or previous years do not exceed in the aggregate 500,000 Canadian dollars or 250,000 pounds sterling, whichever is the greater.

5.  In this Article, the term “ taxation” means taxes which are the subject of this Convention.