File: 11690-12(mf)
XXXXX 11695-5
This is further to your memorandum of December 21, 1992 addressed to Norine Wiens, Headquarters, Ottawa, forwarded to Policy and Legislation by Richard Lalonde, Acting Chief, Registration. It is our understanding that you are requesting written clarification concerning subsections 127(2) and 127(3) of the Excise Tax Act (the "Act") relating to when a corporation is associated with an individual and when a partnership or trust is associated with an individual.
Subsection 127(2) of the Act defines when a person, other than a corporation, is associated with a corporation. Subsection 127(3) defines when a person is associated with a partnership or trust. The language contained in these subsections refer specifically to a person being associated with a corporation, partnership or trust; however, when read in the context of the Act as a whole there is no reason to restrict the "association" from flowing both ways.
Consequently, when calculating the small supplier threshold or determining frequency of filing requirements, the Act requires that the tests are applied to the gross revenue in respect of taxable supplies of a particular person and any other person associated with the person.
If you have further questions in respect of this matter, please contact Serge Bernier at (613) 952-9580.
H.L. Jones Director
General Tax Policy
Policy and Legislation
GTP: XXXXX
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