News Share

The Tax Hub

Daily Tax Newsletter

Canada

2 June 2016

Responsive image

Canada Announces that Delaware and Florida Limited Liability Partnerships will be Treated as Corporations for Tax Purposes

On 26 May 2016, the Canadian Revenue Agency (CRA) announced that it has taken the position that limited liability partnerships (LLP) and limited liability limited partnerships (LLLP) organized under the laws of the U.S. states of Delaware and Florida will be treated as corporations for tax purposes. The reasoning for the treatment as corporations is based on the separate legal personality and extensive limited liability of the two forms. However, CRA will be willing to treat existing LLPs and LLLPs as partnerships if certain conditions are met, including that:

  • The LLP or LLLP was formed and began to carry on business before July 2016;
  • The LLP or LLLP is converted to a partnership form recognized by the CRA before 2018;
  • The LLP or LLLP was never converted from an entity form treated as a corporation by the CRA;
  • The LLP or LLLP (or any of its members) has never taken a position with the CRA that the entity was anything other than a partnership; and
  • It is clear based on surrounding facts and circumstances that the members of the LLP or LLLP are carrying on business in common with a view to profit, and intended to create an entity that would be treated as a partnership.

Since the CRA announcement only mentions Delaware and Florida, it is unclear whether the CRA intends to take a similar position on similar entities formed under the law of other U.S. states. CRA is expected to issue additional guidance on the matter in the near future.

Powerful Tax Tools

NEW

FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.

NEW

Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.

NEW

Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.

NEW

Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.

NEW

Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.

NEW

OECD BEPS Project

Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.

NEW

Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.

NEW

Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

NEW

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

NEW

Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.

NEW

Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.

NEW

Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.

NEW

VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.

NEW

NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.

NEW

Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.

NEW

Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Translate Documents

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More