Income Tax Act — I-3.3 93.1
n. Tiered partnerships (3) A person or partnership that is (or is deemed by this subsection to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership, and the person or partnership is deemed to have, directly, rights to the income or capital of the other partnership to the extent of the person or partnership’s direct and indirect rights to that income or capital, for the purposes of applying (a) except to the extent that the context otherwise requires, a provision of this Subdivision; (b) any of paragraphs 13(21.2)(a), 14(12)(a), 18(13)(a), 40(2)(e.1), (e.3) and (g) and (3.3)(a); and (c) subsections 39(2.1), 40(3.6), 85.1(4.1) and 87(8.31). Partnership deemed to be corporation (4) For the purpose of applying clause 95(2)(a)(ii)(D) in respect of an amount paid or payable by a partnership to a foreign affiliate, of a taxpayer, that is a member of the partnership or to another foreign affiliate of the taxpayer, (a) if, at any time, all the members (in this subsection referred to as “member affiliates”) of the partnership are foreign affiliates of the taxpayer, (i) the partnership is deemed to be, at that time in respect of the taxpayer and the member affiliates, a non-resident corporation without share capital, and (ii) all the membership interests in the partnership are deemed to be, at that time, equity interests in the corporation held by the member affiliates; and (b) if, at any time, all the member affiliates are resident in a particular country and the partnership does not carry on business outside the particular country, the partnership is deemed to be, at that time, resident in the particular country. Computing FAPI in respect of partnership (5) For the purpose of applying a relevant provision in respect of a foreign affiliate of a taxpayer resident in Canada, if at any time the taxpayer is a partnership of which a particular corporation resident in Canada, or a foreign affiliate of the particular corporation, is a member and if, based on the relevant assumptions, the particular corporation and the taxpayer would be related, then (a) a non-resident corporation that is, at that time, a foreign affiliate of the particular corporation is deemed to be, at that time, a foreign affiliate of the taxpayer; and (b) the taxpayer is deemed to have, at that time, a qualifying interest in respect of that foreign affiliate if the particular corporation has, at that time, a qualifying interest in respect of the non-resident corporation. Relevant provisions and assumptions (6) For the purposes of subsection (5), (a) the relevant provisions are (i) paragraph (b) of the description of A in the definition foreign accrual property income in subsection 95(1), (ii) in determining whether a property of a foreign affiliate of a taxpayer is excluded property of the affiliate, the description of B in the definition foreign accrual property income in subsection 95(1), (iii) paragraphs 95(2)(a) and (g), and (iv) subsections 95(2.2) and (2.21); and (b) the relevant assumptions are that (i) the partnership is a non-resident corporation having capital stock of a single class divided into 100 issued shares that each have full voting rights, and (ii) each member of the partnership (other than another partnership) owns, at any time, the proportion of the issued shares of that class that (A) the fair market value of the member’s interest held, directly or indirectly through one or more partnerships, in the partnership at that time is of (B) the fair market value of all the interests in the partnership held directly by members of the partnership at that time. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] 2001, c. 17, s. 71; 2012, c. 31, s. 20; 2013, c. 34, ss. 69, 427; 2014, c. 39, s. 21; 2018, c. 27, s. 6 2026, c. 3, s. 26