INTERNATIONAL TOPICS DATABASE

This section  provides a more detailed examination of how tax and trade agreements impact non-resident service providers. It includes legislation, statutory references and case law. It includes the follwing topics.

1. GATS - The GATS came into force on January 1, 1995, as part of the Agreement establishing the World Trade Organization (WTO agreement) . The GATS accord is a multilateral agreement covering trade in the service sectors, which applies to all WTO Member countries.  Its scope and coverage is reliant on basic definitions about who is a service supplier, and what is considered a measure "affecting trade in services." It covers 4 methods of providing services including cross border.               

2. NAFTA - Chapter 12 of the NAFTA establishes basic rules agreed to by Canada, Mexico and the U.S. for regulating the provision of services across their respective borders. The agreement calls for national treatment, MFN treatment, and prohibits local presence requirements. It exceeds the GATS both in scope and coverage, bringing all existing and future government measures relating to cross-border, non-financial services within the scope of the Chapter.             

3. Direct Taxation -The discussion focuses  on income taxes and where applicable GST. Reference is also made to tax measures that indirectly affect the service provider. E.G., Can a purchaser of  services claim a deduction for the services of  a resident but not a non-resident service provider.

4. Tax Treaties -Tax treaties are bilateral. They  are intended to avoid double taxation and to provide for the exchange of information. Bilateral ax treaties have been entered into by each of the NAFTA paprners. In addition each NAFTA country has entered a network of tax treaties with Third countries.