The corporate Taxpayer had an October 16 taxation year and had only a permanent establishment in Quebec excepting the Partnership, which had an October 31 taxation year and had permanent establishments in several provinces but which, on October 16, 2005, disposed of all its assets located outside Quebec. After finding that the Taxpayer was required to allocate income for its taxation year ending on October 31, 2006 on the basis that it had permanent establishments in those other provinces, the Directorate went on to address the reverse situation, stating:
[A] corporation with a permanent establishment only in Quebec becomes a partner in a new partnership in a particular taxation year. Suppose that the first fiscal period of the new partnership will end after the particular taxation year and that the new partnership has only a permanent establishment in Ontario. In this example, although the corporation would have a permanent establishment in Ontario through the partnership during its particular taxation year, since the partnership's income is included only in the corporation's income in the taxation year following the particular taxation year, no portion of the corporation's taxable income for the particular taxation year will be allocated to the province of Ontario under subsection 402(6) of the Regulations.