CRA Releases GST/HST Memorandum on Partnerships

In March 2025, the Canada Revenue Agency (CRA) released GST/HST Memorandum 14-9-1, “Partnerships – Determining the Existence of a Partnership”. This memorandum outlines the CRA’s approach to determining whether a partnership exists for the purposes of the Excise Tax Act (ETA) and provides important interpretive guidance for businesses engaged in collaborative or joint business activities.

The ETA defines a partnership as a person but does not define the term “partnership.” The memorandum outlines the CRA’s interpretation of when a partnership exists under the ETA, drawing on common law principles, the Civil Code of Québec, and other relevant provincial legislation. In addition, the CRA notes the following preconditions for a partnership to exist as summarized by the Supreme Court of Canada:

• Two or more persons must demonstrate a relationship in which they are carrying on a business; and

• The parties in the relationship must be doing so in common and with a view to profit.

The CRA emphasizes that no single criterion is determinative in establishing the existence of a partnership. Instead, all facts and circumstances, including agreements, conduct of the parties, and financial arrangements, must be evaluated to help determine if a partnership exists.

The memorandum also clarifies the distinction between partnerships and other structures (e.g., co-ownerships, joint ventures, and cost-sharing arrangements) and addresses limited partnerships, registration requirements for goods and services tax (GST) and harmonized sales tax (HST), and the tax implications of changes in partnership composition.

Businesses involved in any form of collaborative arrangement should review their situation to determine if it might be considered a partnership for ETA purposes, as this may affect an organization’s GST/HST compliance obligations and eligibility for input tax credits.

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals.