13 August 1990 Ministerial Letter 59718 F - Société en nom collectif

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.

Attention: 19(1)

August 13, 1990

Dear Sirs:

Re: Société en Nom Collectif ("SNC")

This is in response to your letter of March 9, 1990.

It is our view that an SNC created under the laws of France is a partnership for the purposes of the Income Tax Act (the "Act") whether or not it elects to be taxed as a corporation for the purposes of French income tax law. Accordingly, if an SNC carries on business in Canada, each non-resident partner will generally be subject to tax on its share of income from such business pursuant to subparagraph 115(1)(a)(ii) and subsection 96(1) of the Act.  As well a partner who is resident in Canada would be required to report its share of the world-wide income or loss of the SNC in accordance with section 96 of the Act.

Where a partnership carries on business in Canada through a permanent establishment, each partner is considered to be carrying on business in Canada through a permanent establishment. If a non-resident partner is resident in a country with which Canada has an income tax convention, the convention will which probably provide relief from Canadian tax where the partnership does not have a permanent establishment in Canada for the purposes of such convention.  In the case of an SNC, it is not necessarily the convention between Canada and France that is relevant but rather the convention between Canada and the country in which the partners are resident.

We trust this is the information you require.

Yours truly,

for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch