A non-resident individual (the "Non-resident") residing in Hong Kong for the purposes of the Canada-Hong Kong Convention disposed of land located in Canada to an arm's length third party. CRA stated:
[T]he capital gain from the disposition of the Land by the Non-resident is taxable in Canada under Article 13, paragraph 1, of the Convention, whether or not that property has generated property income or business income. Indeed, we understand that the reference to Article 6, "Income from Immovable Property", in Article 13, paragraph 1, of the Convention does not have the effect of reducing the scope of that paragraph. Finally, we are of the view that paragraph 22 of the OECD Commentary on Article 13 of the Model Tax Convention on Income and on Capital supports our conclusion since it specifies that, for purposes of the definition of immovable property, paragraph 1 of Article 13 refers to Article 6.