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.
SUBJECT: PRAIRIE TAX CONFERENCE (Q #12 NON-RESIDENT PARTNERS) SECTION: 233.1, 221(1)(d), REG 229(1)]
April 27, 1992 PRAIRIE TAX CONFERENCE May 19 & 20, 1992 DRAFT/EBAUCHE Question 12
Does subsection 229(1) of the Income Tax Regulations ("Regulations") (Partnership Information Return - T5013) and section 233.1 of the Income Tax Act ("Act") (Information Return for Non-Arm's Length Transactions with Non-Residents - T106) apply to non-resident partners of a partnership that carried on business in Canada? Would the answer be different if the partnership only had income from property or investments?
Department's Position
Pursuant to paragraph 221(1)(d) of the Act and subsection 229(1) of the Regulations, every member, whether a resident or non-resident of Canada, of a partnership that carries on business in Canada at any time in a fiscal period of the partnership shall make for that period an information return in prescribed form (ie. Form T5013) containing the information described in paragraphs 229(1)(a) through (e) of the Regulations as well as any other information required by Form T5013. Where the partnership does not carry on business in Canada, no such information return would be required to be filed unless the partnership is a Canadian partnership as defined in paragraph 102(a) of the Act. It is a question of fact whether a particular partnership is carrying on business in Canada.
Subsection 229(4) of the Regulations gives the Minister the discretionary power to exempt the members of any partnership or any class of partnerships from filing the Partnership Information Return. The Minister has exercised this authority to those partnerships described in paragraph 11 of Information Circular IC 89-5R.
Pursuant to section 233.1 of the Act, every non-resident corporation that carried on business in Canada, through a partnership or not, shall, in respect of each non-resident person with whom it was not dealing at arm's length at any time in the year, file within 6 months from the end of the year, an annual information return (ie. Form T106) for the year in prescribed form and containing prescribed information in respect of transactions with that person. Where the non-resident corporation does not carry on business in Canada, either directly or through a partnership, no such information return would be required.
Author: J. Wilson
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