Will CRA look through LLCs and other entities that are fiscally transparent for US purposes, in applying paras. 2(d) and (e) of "qualifying person" of Art. XXIX A of the Canada-U.S. Treaty? CRA responded:
The principles of new paragraph 6 of Article IV of the Treaty will be taken into account by the CRA when applying the ownership and base erosion provisions of Article XXIX A. Therefore, the CRA will "look through" an entity that is viewed as fiscally transparent under the domestic laws of the residence State (other than entities that are resident in the source State) when applying the ownership/base erosion test in paragraphs 2(d) and 2(e) of the definition of "qualifying person" of Article XXIX A. The CRA recommended that the [Technical Explanation] reflect this interpretation.