24 November 1995 GST/HST Interpretation 11690-1[2] - Registration of Corporate Partners

                                                                        Telephone: (613) 954-8585
Fax: (613) 990-1233
File: 11690-1(glr)
s. 145, 169, 175, 240

                                                                        November 24, 1995

I refer to XXXXX E-mail message of August 9, 1994, addressed to Mr. Gunar Ozols of my staff, concerning a registration request from a corporation that is a member of a partnership. Please accept my apologies for the delay in this response.

 XXXXX provided the following information in his message:

•   The corporation requesting registration does no billing and charges no GST. The corporation will only be claiming input tax credits (ITCs) on its own operating expenses.

•   The partnership is registered for GST, does all the billing and accounts for the GST.

Subsection 145(1) of the Excise Tax Act (Act) provides that any commercial activity engaged in by a person in that person's capacity as a member of the partnership is treated as a commercial activity of the partnership rather than the member. Consequently, partners are not required (and in some circumstances may not even be permitted) to register separately if their commercial activity (if any) is encompassed entirely by what they do as a member of the partnership. If the corporation has no commercial activity other than that as a member of the partnership, the application for registration should not be processed.

A corporation that is not registered for GST purposes is not entitled to claim ITCs for the GST paid or payable in respect of property or services acquired or imported for consumption, use or supply in the course of an activity of the partnership. The partnership may, however, be eligible to claim ITCs for the GST paid or payable on those acquisitions or the portion thereof. Further, the partnership and the corporation may be able to avail themselves of the reimbursement mechanism provided for in section 175 of the Act, depending on the nature and use of the expense and the relevant relationship between the partnership and the corporation.

If you require further information, please contact Ms. Anny Roy at (613) 954-2560, Mr. Lalith Kottachchi at (613) 952-9588, Mr. Serge Bernier at (613) 952-9580 or Mr. François Paris at (613) 952-8812.

H.L. Jones
Director
General Applications Division
GST Rulings and Interpretations
Policy and Legislation Branch