Section 115.1

Administrative Policy

93 C.M.TC - Q.16

Discussion of the circumstances in which the Canadian competent authority had permitted deferral of recognition of gain.

90 C.P.T.J. - Q.30

In determining the taxpayer's gain or income for Canadian income tax purposes, the taxpayer may choose whether or not to elect to reduce the resulting gain or income from the disposition of property using the replacement property rollovers in ss.13(4), 14(6) and 44(1). If he so chooses, it is the reduced amount that is relevant for purposes of Article XIII(8) of the U.S. Convention.


Dalsin, "Dispositions of Property by Non-Residents: Tax Deferral by Ministerial Discretion", 1991 Canadian Tax Journal, p. 77.

D'Aurelio, "International Issues: A Revenue Canada Perspective", 1990 Conference Report, c. 44, under "Section 115.1 and Related Treaty Provisions"

Subsection 115.1(1)

See Also

Sifto Canada Corp. v. The Queen, 2017 TCC 37

115.1 not germane to subsequent inconsistent CRA assessment

CRA accepted a voluntary disclosure by Sifto Canada that it had undercharged on its sales of rock salt to a U.S. affiliate, and reassessed accordingly. Sifto Canada and the parent of its U.S. affiliate (which used consolidated returns) then applied to the Canadian and U.S. competent authorities for the higher transfer price to be accepted, so that the income of the U.S. parent could be reduced accordingly. The two competent authorities agreed to this, and CRA then entered into a letter agreement with Sifto Canada where it agreed with the adjustment. Only then did CRA audit Sifto Canada, which resulted in it reassessing Sifto Canada on the basis that the transfer prices should have been even higher.

After having found for Sifto Canada on other ground, Owen J noted (at para. 165) that although s. 115.1(1) deemed the reassessments following the voluntary disclosure to be in accordance with the ITA, “it does not address the Minister’s ability to further reassess the Appellant to impose a transfer price different from that agreed to by the Minister and the IRS and accepted by the Appellant,” so that “this provision is of no assistance to the Appellant.”

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 9 agreement with the U.S. competent authority re a VDP-adjusted transfer price binds CRA even if it had not yet audited the taxpayer 593
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) TNMN method was reasonable 211
Tax Topics - Income Tax Act - Section 152 - Subsection 152(1) MAP agreement concurred in by taxpayer was binding on the Minister as it was not “indefensible” 265