CRA rules that the property of a Canadian company does not for Treaty purposes “consist of” Canadian real estate where the real estate is held through a subsidiary

Art. XIII, para. 3 of the Canada-Israel Treaty permits Canada to tax an Israeli resident on "gains from the alienation of shares of a company, the property of which consists principally of immovable property situated in [Canada]."  CRA ruled that any gains of an Israeli company from transferring shares of a Canadian subsidiary which, directly and through a subsidiary LP, held shares of a Canadian real estate company, were exempted from Canadian capital gains tax under the Treaty.

Neal Armstrong.  Summary of 2014 Ruling 2014-0527221R3 under Treaties – Art. 13.