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.
Principal Issues: Based on the definition provided in subsection 251(4) of the Income Tax Act (the "Act"), a ''related group'' is a group of persons but a partnership is not always a person for the purpose of the Act. However, it is included in Part I, Section 3.C iv), Partnership, of form T1134. Can the Canada Revenue Agency ("CRA") clarify its position as to when a partnership should be included in a group of reporting entities that are related to each other?
Position: A ''group of reporting entities that are related to each other'' can include a partnership in certain cases.
Reasons: If a partnership is considered a reporting entity, the administrative position relating to reporting entities that are members of a related group would be extended to partnerships if at least one of the partners is related to every other reporting entity forming the related group.
2025 CTF Annual Conference
CRA Round Table
Question 4: T1134 – Partnerships and the meaning of “Related Group”
The instructions to the T1134 information return indicate that to benefit from the administrative relief for “groups of reporting entities that are related to each other,” the filers must be members of a related group, as defined under subsection 251(4). The definition of “related group” under subsection 251(4) specifies that a related group is a “group of persons each member of which is related to every other member of the group.” Although a partnership is a reporting entity pursuant to paragraph 233.4(1)(c), it is not necessarily a person for the purposes of the Act.
Can the CRA indicate how to determine if a partnership should be part of a related group under the administrative relief for the “group of reporting entities that are related to each other,” if the partnership is not a person for purposes of the definition of “related group” under subsection 251(4)?
CRA Response
For taxation years beginning after 2020, the CRA allows reporting entities who are members of the same “group of reporting entities that are related to each other” to file a single T1134 information return for all foreign affiliates for which the members of the related group would otherwise have been required to file T1134 information returns.
As stated in the instructions to the T1134 information return, to be part of a “group of reporting entities that are related to each other,” the reporting entities must belong to the same related group as defined under subsection 251(4), have the same year end, and be reporting in Canadian currency or the same functional currency.
A partnership referred to under paragraph 233.4(1)(c) is a reporting entity for the purposes of section 233.4 from the moment a partner who resides in Canada and who is not exempt from Part I tax holds at least a 10% interest in the partnership's income or losses for the period. In other words, a partnership is a reporting entity if the total of all amounts, each representing the share of the partnership’s income or loss for the period of a non-resident partner or of one who is a fully exempt taxpayer, is less than 90% of the partnership’s income or loss for the period.
As stated at the 2024 APFF Conference,(footnote 1) if a partnership is a reporting entity in respect of a foreign affiliate, the administrative relief for the “group of reporting entities that are related to each other” extends to the partnership if at least one of its partners (or if another partnership is a partner, one of the partners of that other partnership) is related to each of the other reporting entities forming a related group in respect of that same foreign affiliate. If there is any doubt about the inclusion of a partnership, the reporting entity would benefit from including it on the T1134 information return for the “group of reporting entities that are related to each other” in order to ensure that the partnership's reporting obligations are met and that the CRA will recognize them as such. Should the designated reporting entity choose to include the partnership as a member of the related group, the designated reporting entity and the partnership should work collaboratively to ensure that T1134 supplements are filed for all foreign affiliates that the partnership would have been required to report on as a standalone reporting entity.
Isabelle Sauvé
2025-108066
December 2, 2025
Response prepared in collaboration with:
Darren Poiré, Senior Technical Specialist
Compliance Programs Branch
International Technical Issues Section
Amélie Guimont, Senior Technical Specialist
Compliance Programs Branch
International Technical Issues Section
FOOTNOTES
Note to reader: Because of our system requirements, the footnotes contained in the original document are shown below instead:
1. CRA Document No. 2024-1028681C6, October 10, 2024
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