CRA recently released a letter which discussed whether income allocated to a First Nation from a limited partnership is exempt from tax because the First Nation is a public body performing a function of government. 

CRA had the following comments:

“Because the First Nation is, and as long as it continues to be, a public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) of the Act, and therefore exempt from tax under Part I of the Act, no tax will be payable under Part I of the Act by the First Nation on income allocated to the First Nation by the Limited Partnership, in respect of the XXXXXXXXXX operated by the Limited Partnership, as a result of the proposed transactions described above.”

To access the full CRA letter, please click here.