A partnership is the relationship which exists between the persons carrying on business in common with a view to profit. However the definition of partnership for income tax purposes not only encompasses a partnership in that sense, but also includes an association of persons in receipt of income.

With the exception of a Corporate Limited Partnership, a partnership is not taxable as such, but the partners are taxable in their individual capacities on their share of the net partnership income whether distributed to them or not.

Each partnership is required to furnish a return of the income of the partnership to determine the net partnership income or partnership loss. Each partner must then include in a personal return his or her individual share of the partnership income or loss and pay tax accordingly on net taxable income for the year.