US and Canada Competent Authority Agreement sets standards on attribution of profits to a PE

July 2012


On June 26, 2012, the United States and Canada concluded a Competent Authority Agreement addressing the interpretation of the provisions in the income tax convention between the United States and Canada, as amended by the 2007 Protocol (and four prior Protocols) ("the Treaty") providing the standards to apply in determining the attribution of profits to a permanent establishment (PE). The 2007 Protocol was signed just as the OECD was finalizing its discussion draft on the attribution of profits to a PE, which was released in May 2008 (the Authorized OECD Approach (AOA)). The AOA was finalized July 17, 2008 and revised in 2010, and is referred to in the Competent Authority Agreement as the "full AOA."

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