In 2016-0651411I7, the CRA concluded that income originally allocated to a provincial permanent establishment (PE) can be reallocated to a different PE within the extended reassessment period under s. 152(4)(b)(iii).  In the CRA’s view, this provision allows a reassessment to be made within 3 years after the end of the normal reassessment period if there is a causal relationship between: (1) the amount assessed under Part I, and (2) a transaction involving the taxpayer and a non-arm’s length non-resident person (see page 6).  Such an assessment or reassessment includes the reattribution of gross revenues between provincial PEs (under s. 124(1) and Part IV of the Regulations) with respect to a transaction involving the taxpayer and a non-arm’s length non-resident person.  Furthermore, this ability to reallocate income among provinces does not require that there be increased Part I tax under the transfer-pricing rule in s. 247(2) (see pages 7 and 8).