This preview shows page 1. Sign up to view the full content.
Unformatted text preview: is upstream, downstream, or parallel to the activity conducted in the other country. The technical explanation further explains that if the us activity of a Canadian resident company consists of selling the output of a Canadian manufacturer or providing inputs for the manufacturing process, or consists of manufacturing or selling in the united states the same sorts of products that are sold by a Canadian trade or business in Canada, the income generated by these activities is treated as earned in connection with the Canadian trade or business.
For the purposes of the us model convention, income is derived in connection with a trade or business if an income-producing activity in the source country is a line of business that “forms part of ” or is “complementary to” the trade or business conducted in the residence country. The technical explanation to the us model convention33 also provides the following:
a business activity generally will be considered to form part of a business activity conducted in the state of...
View Full Document