In 2013-0474671E5, the CRA concluded that “the simple holding of shares” by a US company is not a business activity, and as such, would be ignored when applying the “more closely connected business activities” exception in the new “foreign affiliate dumping” (or CRIC) rules. The hypothetical case involved a non-resident parent owning a Canadian company (Canco), Canco owning a US holding company (US Holdco), and US Holdco owning a US operating company (US Opco). US Opco carried on an active business similar to an active business Canco carried on in Canada. No other non-resident corporations in the group carried on business activities similar to Canco’s business activities in Canada. The CRA confirmed that for the purpose of the “more closely connected business activities” exception in the CRIC rules (s. 212.3(16)), the collective business activities of US Holdco and US Opco would be comprised only of those activities carried on by US Opco. Accordingly, the first condition in s. 212.3(16) would be met: i.e., Opco’s business activities were expected to remain “more closely connected” to Canco’s business activities than to any other business activities carried on by any other non-resident corporation in the group.