CRA adopts the position that partnerships formed under provincial law are resident in Canada for CRS purposes

On December 19, 2025, the CRA amended its “Guidance on the Common Reporting Standard” (CRS) to add a position that a partnership will be considered to be resident in Canada for purposes of the CRS rules if it was formed under provincial law, or all its partners were residents. In particular, the CRA amended paragraph 3.32 to include the following italicized words:

A partnership will be considered as a Canadian resident partnership if:

• All the partners, including all end members, are resident in Canada;
• The place of effective management and control of a partnership's business is situated in Canada; or
• The partnership was formed under the laws of a province or territory.

It is common for non-residents to choose an Ontario or other provincial limited partnership as a convenient vehicle to invest in non-Canadian assets. In addition, a limited partnership might have only Canadian partners, including a general partner that was deemed to be resident in Canada due to its Canadian incorporation but with its central management and control (and that of the partnership) outside Canada. These change will, in many situations, render such partnerships “Canadian financial institutions” for CRS purposes, so as to result in reporting obligations under those rules. No change has been made to the equivalent FATCA guidance, giving rise to a more pronounced dual regime.

An ad hoc group has represented to CRA that inter alia it is appropriate to provide grandfathering and transitional relief given that such partnerships would have had no notice for most or all of 2025 that they should have been collecting certifications from their investors.

Neal Armstrong. Summaries of Guidance on the Common Reporting Standard, Part XIX of the Income Tax Act, 19 December 2025 under s. 270(1) – investment entity, Canadian financial institution – (a), active NFE – (a), s. 263(1) – LFI – para. (k) and s. 277(4).