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.
Dear Sirs:
Re: Withholding Tax - Partnerships
This is in reply to your letter dated February 6, 1991 whereby you inquired concerning the provision of refunds of tax withheld under Part XIII of the Canadian Income Tax Act (the "Act") on interest paid to a partnership where, by virtue of the provisions of an income tax convention (such as Article XXI or Article XI of the Canada-United States Income Tax Convention, 1980), by virtue of provisions of the Act (such as subsection 212(14)) or by virtue of the fact that a partner is a resident of Canada and thus not subject to tax under Part XIII, such tax would not have been exigible or would have been exigible at a lesser rate had there not been a partnership and had the debt been owed and the interest been paid to the partners directly.
Except in respect of a partner resident in a country where a partnership is treated as a separate entity for income tax purposes, in which case a different policy may be applied, for the purpose of responding to an application by a partner for a refund of Part XIII tax withheld from payments to a partnership of which the partner is a member, the Department treats the partnership as a conduit and the Department's administrative policy is to refund the excess if the amount of Part XIII tax withheld and remitted that is attributable to the partner exceeds the amount of such tax that would have been exigible had there not been a partnership and had the partner's share of the interest been paid to it directly.
For further information concerning the Department's administrative policies and procedures in respect of Part XIII tax you should contact Non-Resident Taxation Division, Source Deductions (613-954-1315).
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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