2014-0547501E5 Certificates of residency and partnerships

Principal Issues: Whether a certificate of residency can be issued to a partnership?

Position: No.

Reasons: A partnership is not considered resident in Canada. However, each partner of a partnership can ask for a certificate of residency, or an authorized representative can make a request on behalf of the partners for CRA to certify that the partnership is a “Canadian partnership” in accordance with subsection 102(1) of the Income Tax Act as of a particular time.

Author: Demeter, Robert
Section: 250, 102(1)

XXXXXXXXXX
                                                                                                                                               2014-054750
                                                                                                                                               Robert Demeter
                                                                                                                                               (613) 948-5274

January 26, 2015

Dear XXXXXXXXXX:

Re:   Certificates of residency and partnerships

As part of the roundtable discussion at the 2013 Tax Executives Institute, Inc. (TEI) Liaison Meeting, the Canada Revenue Agency (CRA) was asked to consider whether a tax residency certificate could be issued in the name of a Canadian partnership on the basis of the Canadian residency of all its partners. In response, the CRA confirmed that a certificate of residency was not available to a partnership as the partnership is not, itself, considered resident in Canada. (endnote 1)  While these comments did reflect the established view of the CRA at that time, we are writing to advise you of a change in the certificate of residency process, as it relates to certain partnerships. 

While the CRA remains of the view that it cannot certify the residency of a partnership because partnerships are not considered resident, it should be noted that each partner of a partnership can ask for a certificate of residency on their own account, as proof that the requesting partner has filed returns as a resident of Canada. Alternatively, a representative authorized to act on behalf of the partners of the partnership can make a request on behalf of the partners. In such cases, the CRA will certify the residency of all partners of the partnership, and certify that the partnership is a “Canadian partnership” in accordance with subsection 102(1) of the Income Tax Act as of a particular time.

Please note that the information in respect of the certificate of residency process, as available at the CRA website, has recently been updated to clarify this process. (endnote 2)

We trust that this additional information is of assistance for your purposes.

Yours truly,

Robert A. Demeter, CPA, CGA
Section Manager
for Division Director
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

ENDNOTES

1  Refer to Income Tax Rulings document 2013-051085.
2  http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/crtrs-eng.html

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