28 November 2000 External T.I. 2000-0057765 - Delaware Revised Uniform Partnership Act

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:

What is the status for Canadian income tax purposes of an entity governed by the Delaware Revised Uniform Partnership Act (the "DRUPA") ?

Position:

We would considered an entity governed by the DRUPA as a partnership for Canadian income tax purposes.

Reasons:

In our view, the attributes of an entity formed under the DRUPA more closely resemble those of a Canadian general partnership under our common law. Furthermore, it is our view that the existence of a separate legal entity clause contained in foreign partnership legislation would not, in and by itself, preclude an arrangement from being considered as a partnership for purposes of the Canadian Income Tax Act.

XXXXXXXXXX
2000-005776
Attention: XXXXXXXXXX

November 28, 2000

Dear Sir\Madam:

Re: Delaware Revised Uniform Partnership Act

This is in reply to your letter of September 8, 2000 concerning the status for Canadian income tax purposes of an entity governed by the Delaware Revised Uniform Partnership Act (the "DRUPA").

We have fully analysed the attributes of the entity governed by the DRUPA and compared them to the attributes of a Canadian partnership and a Canadian corporation. Generally, this approach is used in determining the classification, for purposes of applying the Canadian Income Tax Act, of an entity created under foreign partnership legislation.

In our view, the attributes of an entity formed under the DRUPA more closely resemble those of a Canadian general partnership under our common law and, as such, an entity governed by the DRUPA would be treated as a partnership for Canadian income tax purposes. Furthermore, it is our view that the existence of a separate legal entity clause contained in foreign partnership legislation would not, in and by itself, preclude an arrangement from being considered as a partnership for purposes of the Canadian Income Tax Act. However, given the facts of a particular situation, you may wish to request an advance income tax ruling where you are contemplating transactions involving foreign entities whose status may not be clear for Canadian income tax purposes.

Yours truly,

Marc Vanasse, CA
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch