Does s. 214(3)(a) deem a non-resident corporation to pay a dividend (subject to Part XIII tax under s. 212(2)) to its non-resident shareholder where such shareholder uses a property of the corporation in Canada free of charge? After noting that “If the person paid rent to the corporation for the use of the property, the person would be deemed, in respect of that payment, to be a person resident in Canada pursuant to paragraph 212(13)(a),” CRA stated:
[T]he corporation conferred a benefit the value of which, if any, could be included in computing the income of the non-resident person for the purposes of the application of the Act. Indeed, subsection 15(7) makes subsection 15(1) applicable whether or not the corporation has been resident in Canada or has carried on a business there. Thus … subsections 15(1), 212(2) and paragraph 214(3)(a) would be likely to subject the non-resident to Part XIII tax.