Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether the Notice of Determination provided for in subsection 152(3.3) can be issued to a partnership, calculated on a partnership basis.
Position TAKEN:
No
Reasons FOR POSITION TAKEN:
A partnership is not a person, except for certain purposes.
July 7, 1994
A. Bissonnette Head Office
Director Rulings Directorate
Source Deductions Division B. Kerr
957-8953
Attention: Al Scott
941552
Notice of Determination
UI Premium Tax Credit
This is in response to your memorandum of June 13, 1994, wherein you requested our assistance with respect to the application of subsection 152(3.3) of the Income Tax Act concerning the issuance of a "Notice of Determination" requested by partnership employers.
Unless otherwise stated all references to statute are references to the Income Tax Act S.C. 1970-71-72, c.63 as amended consolidated to June 10, 1993 (the "Act").
You have stated that the Act deems a partnership to be a corporation for purposes of the UI Premium Tax Credit ("UIPTC"). However, partners are taxed on their share of the partnership income. Under subsection 126.1(7), one of the partners may file a UIPTC claim on behalf of the partnership. You have indicated that administratively, it would be ideal if you could also issue the Notice of Determination on a partnership basis.
You have asked for our opinion on whether it would be acceptable for you to issue a "Notice of Determination" to a partnership, calculated on a partnership basis.
Generally, a partnership is not a person nor a taxpayer. Paragraph 2 of Interpretation Bulletin IT-90 defines a partnership as "the relation that subsists between persons carrying on business in common with a view to profit". However, where a taxpayer is a member of a partnership, paragraph 96(1)(a) of the Act deems a partnership to be a person only for the purposes specified therein which include determining the taxpayer's income and certain types of losses, but do not include tax liability, payments, returns or assessments. Since subsection 152(3.3) makes reference to subsection 152(3.2) which involves a "taxpayer" and subsection 122.61(1) which involves a "person", a Notice of Determination can not be issued to a partnership. It can only be issued to a taxpayer and only in respect of that taxpayers's liability.
Although section 126.1 of the Act deems a partnership to be a corporation for certain purposes and subsection 126.1(7) allows a member of a partnership to file the prescribed form for the UIPTC, these provisions are only for the purposes of section 126.1 of the Act. Accordingly, these provisions can not be relied upon for the purpose of subsection 152(3.3) of the Act. However, in regards to the UIPTC and the Notice of Determination with respect to the amount deemed by subsections 126.1(6) or (7) to be an overpayment, a taxpayer may request a determination of the overpayment of the taxpayers's liability and a Notice of Determination shall be sent by virtue of the provisions of subsections 152(3.4) and 152(3.5) respectively.
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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