Under the current Canada Revenue Agency (CRA) administrative policy, a partnership is required to file a partnership information return if it has six or more partners at any time in a fiscal period, or it has five or fewer partners throughout the whole fiscal period and one or more of its partners is another partnership, corporation or trust. The situations that currently mandate the filing of a partnership information return are explained in the Guide for the T5013 Partnership Return (T4068).
The CRA recently announced changes to its administrative policy for filing a partnership information return, shifting its focus to the partnership’s assets and activities in making this determination rather than the number of partners. On January 1, 2011, new filing criteria will come into effect, and will apply to partnerships with fiscal periods ending on or after January 1, 2011.
Effective January 1, 2011, a partnership that carries on business in Canada, or a Canadian partnership with Canadian or foreign operations or investments, will be required to file a partnership information return for each fiscal period of the partnership:
- If, at the end of the fiscal period, the partnership has an “absolute” value of revenues and expenses of more than $2 million, or has more than $5 million in assets
- If, at any time during the fiscal period, the partnership:
– Is a tiered partnership (it is a partner in another partnership or it has another partnership as a partner)
– Has a corporation or a trust as a partner
– Invested in flow-through shares of a Canadian resource business, or
– Is requested to file by the Minister in writing
For more information, please refer to the CRA news release New filing requirements for partnerships. A revised information return and tax guide for partnerships will be introduced in 2011.
Note that these changes are administrative only. The legislative requirement for partnerships to file information returns, and thereby start the clock ticking on the statutory time limit for determination of income for the fiscal period, has not changed.
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