CRA reverses its position that partnerships can be resident in Canada for CRS purposes otherwise than on the basis of their place of effective management

On December 19, 2025, the CRA amended its “Guidance on the Common Reporting Standard” (CRS) to add a position that a partnership will be considered to be resident in Canada for purposes of the CRS rules if it was formed under provincial law, or all its partners were residents. This expansion of scope was relevant to Ontario or other provincial limited partnership that had been used by non-resident investors as a convenient vehicle to invest in non-Canadian assets, or to a limited partnership that had only Canadian partners, including a general partner that was deemed to be resident in Canada due to its Canadian incorporation but with its central management and control (and that of the partnership) outside Canada.

CRA has now reverted to the previous version of the relevant paragraph, which read (and now again reads) as follows:

3.32 A Canadian financial institution can take the form of a partnership. If the place of effective management of a partnership's business is situated in Canada, the partnership is considered resident in Canada under Part XIX.

The amended version of the Guidance continues to be dated December 19, 2025, i.e., this change is retroactive.

Neal Armstrong. Summaries of Guidance on the Common Reporting Standard, Part XIX of the Income Tax Act, 19 December 2025 including under s. 270(1) – Canadian financial institution – (a).