9 March 2016 Internal T.I. 2015-0612501I7 - ITA 261(21) anti-avoidance -- summary under Tax Reporting Currency

CRA considered that s. 261(21) did not apply to deny an FX loss sustained by a Canadian subsidiary (“Holdco”) of a non-resident parent (“Parent”) on hedging agreements it entered into with Parent to hedge its FX exposure on a U.S. dollar loan it had made to a Canadian subsidiary of Holdco which, unlike Holdco, had the U.S. dollar as its reporting currency, given that any of Parent's Canadian tax results would have been determined in Canadian dollars.