The Golden Horseshoe Tax Study Group met yesterday. Kathryn Smith pointed out to the group that the CRA has changed its administrative policy on the reporting required of a partnership.
The CRA, in T4068 (“Guide for the T5013 Partnership Information Return”), writes as follows:
A partnership that carries on a business in Canada, or a Canadian partnership with Canadian or foreign operations or investments, has to file a T5013 Partnership Information Return for each fiscal period of the partnership if at any time during the fiscal period:
- it had six or more partners;
- it was a tiered partnership (a partnership which has a partner that is itself a partnership);
- it was a partnership which had a member that was a corporation or a trust;
- it invested in flow-through shares of a principal-business corporation that incurred Canadian resource expenses and renounced those expenses to the partnership; or
- if the Minister of National Revenue requests one in writing.
The third condition is new: previously the CRA did not distinguish between partnerships that included corporate or trust members and partnerships that did not.
Interestingly, section 229 of the Income Tax Regulations, which requires the T5013, does not provide for any exceptions: technically, all Canadian partnerships or partnerships that carry on business in Canada are required to file the return.
