In 2014-0527221R3, the CRA considered whether a company resident in Israel would be taxable in Canada on the sale of a Canadian corporation (Holdco) that owned shares of another Canadian corporation (Opco) whose value was derived from underlying Canadian real estate. The CRA ruled that the sale was not taxable. Although the shares of Holdco were taxable Canadian property under the Income Tax Act (Canada), the sale was exempt from tax in Canada by reason of Article XIII of the Canada-Israel tax treaty. Specifically, the directly held property of Holdco (being the shares of Opco) could not be said to consist principally of real estate situated in Canada.