Taxation of the Partnership. The Operating Partnership shall at all times be taxed as a partnership under the Code and not as an association taxable as a corporation. 7.13
Taxation of the Partnership. The Partnership is not itself liable for income tax, however, it is required to compute its net income or loss for each of its fiscal periods as if it were a separate person resident in Canada. The fiscal period of the Partnership ends on December 31 of each year. In computing its net income or loss the Partnership will be entitled to deduct expenses incurred by it in the fiscal period in which they are incurred to the extent such expenses are reasonable in amount and their deduction is permitted by the Tax Act. In some cases, outlays and expenses may have to be capitalized and added to the cost amount of its property.
Taxation of the Partnership. The only company-related tax payable by part- nerships and sole proprietors is the trade tax (Gewerbesteuer). The taxable item of the trade tax is each resident trade or business in Ger- many. As a trade income tax the trade tax is linked to the profit of the company. The concept of profit under the trade tax is not identical to the same term in corporation tax law or income tax law. The peculiarity in the calculation of trade income to be mentioned is that, in the case of sole proprietors and part- nerships, all payments to the partners (xxxx- xxxx, interest on shareholder loans, etc.) are included in profit. The rate of taxation for trade tax may differ from one municipality to the next because the municipalities have the right to fix the rates of assessment for municipal trade tax within certain limits. The trade tax burden lies between 10 % and 17 %. The liability for municipal trade tax is less of a burden as a result of the fact that the municipal trade tax can be offset against the income tax. This results in a significant reduction in the overall tax burden. The following is a simplified example of the cal- culation of the trade tax: Profit of a Company (determined by Income /Corporation Tax) 400,000.00 € + / - Trade tax additions / reduc- tions (after consideration of the new exemption) + 100,000.00 € = Trade earnings = 500,000.00 € - Tax exempt-amount for individu- als and partnerships - 24,500.00 € = Trade earnings = 475,500.00 € x Basic rate of tax x 3.5 % = Base amount = 16,642.50 € x Multiplier (e.g. Düsseldorf) x 440 % = Trade tax = 73,227.00 € The basic rate of tax is for all businesses
