Classic International Tax Case: Canada v. Dudney 2000

Par Robert Robillard - 21 juillet 2014

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In Canada v. Dudney, 2000 CanLII 14932 (FCA), the Crown appeals the Tax Court of Canada decision stating that the taxpayer does not have a « fixed base regularly available to him » in Canada. CRA argues that he does. The appeal is dismissed.


« [1] William A. Dudney is a resident of the United States. In 1994 and 1995, he earned income by performing certain services in Canada as an independent contractor. In his Canadian tax returns for those years, he claimed that his income was exempt from Canadian tax. His claim for exemption was based on Article XIV of the Canada-United States Income Tax Convention (1980) (the « Convention »), enacted as Schedule I to the Canada-United States Convention Act, 1984 , S.C. 1984, c. 20.

[2] The Crown took the position that Article XIV of the Convention did not apply, and assessed tax on the income. Mr. Dudney appealed to the Tax Court of Canada. The Tax Court Judge allowed Mr. Dudney »s appeal and ordered the reassessments to be vacated. The Crown is now appealing the decision of the Tax Court Judge.

[3] Article XIV of the Convention reads as follows:

Income derived by an individual who is a resident of a Contracting State in respect of independent personal services may be taxed in that state. Such income may also be taxed in the other Contracting State if the individual has or had a fixed base regularly available to him in that other State but only to the extent that the income is attributable to the fixed base. Les revenus qu’une personne physique qui est un résident d’un État contractant tire d’une profession indépendante sont imposables dans cet État. Ces revenus sont aussi imposables dans l’autre État contractant si la personne physique dispose, ou a disposé, de façon habituelle d’une base fixe dans cet autre État mais uniquement dans la mesure où les revenus sont imputables à la base fixe.
[4] The only issue in this appeal is whether Mr. Dudney had « a fixed base regularly available to him in Canada » within the meaning of Article XIV of the Convention. »


The appeal of the Crown was dismissed.

To see the full case click here. Aussi disponible en français sur ce lien.

Canada v. Dudney, 2000 CanLII 14932 (FCA)

Canada c. Dudney, 2000 CanLII 14932 (CAF)

Robert Robillard, CPA, CGA, MBA, M.Sc. Econ.
Transfer Pricing Chief Economist, RBRT Inc.
514-742-8086; robert.robillard « at » localhost

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