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.
Re: Section 233.1 Form T106
This is in response to your memorandum of August 21, 1991 in which you asked that we consider the view of 19(1) expressed to you in her letter of August 12, the effect that where a corporate partner does not control a partnership, there will be no requirement to file a Form T106 in respect of transactions entered into between the partnership and non- resident persons related to the corporate partner.
Section 233.1 of the Income Tax Act (the Act) refers to "every corporation......was resident in Canada or carried on business in Canada shall in respect of each non-resident person with who It was not dealing at arm's length.....",. In the context of a corporate partnership, due to the fact that under the common law all members of a partnership carry on the partnership business whether or not they are actively engaged in the activities of the partnership business, each corporate partner is considered to carry on the business of the partnership irrespective of whether or not the partner controls the partnership. Therefore, it is our opinion that in a situation where a corporate partnership enters into transactions with a non-resident person or persons with whom a partner was not dealing at arm's length within the meaning of subsection 2511) of the Act, each such partner is required to file For T106 in respect of the transactions with that person or persons.
We trust that our comments will be of assistance to you.
for DirectorReorganization and Foreign Division"Rulings DirectorateLegislative and Intergovernmental Affairs Branch
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