Deemed interest may arise on non-interest bearing intercompany term loans

"It is possible" that the fair market value of a non-interest-bearing term loan will be less than the amount advanced, in which case s. 69(1)(a) "could" deem the loan to have a cost equal to that fair market value if it was made to a related person – so that Reg. 7000(2)(a) would then apply to require current accrual of the (deemed) loan discount. This is one reason most domestic non-interest bearing inter-company loans are repayable on demand.

Neal Armstrong.  Summary of 28 July 2014 T.I. 2014-0532651E5 under Reg. 7000(2)(a).