27 June 2008 External T.I. 2007-0247551E5 - FAPI and Part XIII Tax -- summary under Subsection 5900(3)

A partnership (FP) between two CFAs of Canco received dividends from a non-resident subsidiary of FP (NRco) and on-paid those dividends to its two CFA members. CRA stated that since NRco was not a foreign affiliate of Canco for FAPI purposes, the dividends from NRco were not excluded under the para. (b) FAPI exclusion. However, FP was entitled to an offsetting deduction under s. 91(5) and Reg. 5900(3).