28 September 2020 External T.I. 2020-0851731E5 - CEWS - 125.7(4)(d) election - NAL chain -- summary under Paragraph (d)

CRA indicated that s. 125.7(4)(d) was not available in the situation where all of Canco’s revenues were derived from manufacturing and selling products to Forco A which, in turn, finished the products and sold them to Forco B (which, like Forco A, was a related foreign corporation), for sale to arm’s length customers. The reason is that Forco A was the only NAL entity from whom Canco directly earned qualifying revenues (and, thus, the only entity with which it could elect), and Forco A had no qualifying revenues (as per para. (d) of the “qualifying revenue” definition) because all of its revenues were earned from a NAL entity (Forco B).