If you operate a business partnership in Canada and your income reaches a certain threshold, the Canada Revenue Agency (CRA) requires that you file tax form T5013.
Canadian tax form T5013, also known as the Statement of Partnership Income, is a form that partnerships in Canada use to report basic financial information about their business to the CRA.
Partnerships don't pay income tax in Canada, and T5013 is not used to calculate your tax liability. It simply shows the CRA what portion of your partnership's net income or loss will be reported on each of its partners' individual tax returns.
Form T5013 is part of your broader partnership information return, which is composed of four parts:
If your partnership has to file a partnership information return, each of these forms is mandatory. (See "˜How do I fill out T5013?' below for more information about filling out each one.)
For a detailed, step-by-step guide to filling out a full partnership information return, consult this CRA guide.
The CRA defines a partnership as "an association or relationship between two or more individuals, corporations, trusts, or partnerships that join together to carry on a trade or business."
If you and at least one other person contribute money, property, labor or skills to a business and expect some kind of return, have registered for GST/HST, and have never incorporated, you're probably a partnership.
Just like sole proprietorships, partnerships aren't formal incorporated entities—they can sometimes be created by a simple verbal agreement between two people. Most have some kind of written agreement, however, describing who is part of the partnership and how income and equity will be divided between partners.
For more information about how the Canada Revenue Agency defines partnerships, see this guide.
According to the CRA, two kinds of partnerships must file a partnership information return, including Form T5013:
A partnership only has to submit a T5013 if one of the following is true:
Form T5013-FIN, the Partnership Financial Return, is the first step to filing your partnership information return.
T5013-FIN is a four-page form, the first page of which looks like this:
T5013-FIN is divided into three main parts:
Partnership Information
Located on page one, this part of the form will ask you for basic information about your partnership, including its trade name, address, partnership type, and partnership account number. (See "˜What's a partnership account number, and how do I get one?' below for more.)
Documents required to be attached to T5013-FIN
Located on page two of T5013 FIN, partnerships use this section to determine which of the additional T5013 schedules then need attach to T5013-FIN when filing your partnership information return (see below for more information).
Additional and miscellaneous information
Located on pages 3-4 of T5013-FIN, this section will ask you additional questions about your partnership's operations, finances and taxes.
Once you've filled out T5013-FIN, it's time to start filling out your additional T5013 schedules, which provide the CRA with detailed information about your partnership's finances and operations.
The following T5013 schedules are mandatory for all partnerships required to file a partnership information return:
These schedules can get pretty detailed and complex—have your partnership's books and financial statements on hand when completing them, or better yet, get an accountant or tax specialist to fill them out for you.
Depending on your answers to part two of T5013-FIN, you might also have to fill out one of the following schedules:
T5013 is a two-page document from the CRA, which looks like this:
If your partnership is required to submit a partnership information return, each individual partner must fill out a separate T5013.
There are two parts to form T5013: fixed boxes and generic boxes.
Fixed boxes
Use fixed boxes 001-006 and 010-040 to indicate important information about your partnership, including your total percentage share of the partnership (box 005), your share of the total income or loss for the period (010), the partnership's total income or loss (020), and your partnership's total capital gains or losses (030).
Generic boxes
Use these boxes to provide the CRA with additional information relating to your share of the partnership's revenues, expenses and net income.
For example, let's say we're filling out generic box number 110—the box for "Canadian and foreign net rental income (loss) (Multi-jurisdictional)," according to the CRA's identification guide.
Let's say your partnership is evenly split (50-50) between two partners, and earned $100,00 in Canadian net rental income, and $100,000 in foreign net rental income—$50,000 from the United States, and $50,000 from Mexico.
You would then use box code 110—the CRA box for "Canadian and foreign net rental income (loss) (Multi-jurisdictional)"—to record the following on each partner's individual T5013:
For a full list of generic box codes, click here.
Form T5013SUM is a two-page form that looks like this:
It reports the totals of amounts allocated to the partners on the T5013 slips.
For example, when filling out information for box 110 on T5013SUM, the partnership from the example above would add up their total Canadian ($100,000) and foreign ($100,000) net rental income and record the following:
A partnership account number—also known as an RZ account number—is a 15-character code assigned to all partnerships filing with the CRA. Your partnership needs one in order to submit a partnership information return.
If you don't have one, you can register for one online here, request one using Form RC1, or by calling the CRA at 1-800-959-5525. (Be ready to answer all questions in Part A of Form RC1 if you do.)
Once you have an RZ number, you can file your partnership information return using My Business Account, or a representative can file it on your behalf using Represent a Client.
You can also submit your T5013 forms using the CRA's Web Forms application, or use the same tax prep software you use to file your personal tax return.
Although the CRA discourages filing your partnership information return on paper, you can also mail them your T5013 forms by sending them to the following address:
Prince Edward Island Tax Centre
275 Pope Road
Summerside PE C1N 6A2
If all of the partners in your partnership are individuals—that is, as long as no corporations are part of your partnership or another partnership does not own interest in your partnership—the filing deadline for T5013 is on March 31st after the calendar year in which the fiscal period of the partnership ended.
If all of the partners in your partnership are corporations, the deadline is five months after the end of the partnership's fiscal period.
In all other cases, the deadline for submitting T5013 is March 31st or five months after the end of the partnership's fiscal period, whichever date is earlier.
The penalty for failing to file a partnership information return is $100 or $25 per day to a maximum of 100 days, whichever figure is greater, and repeat offenders could be subject to higher penalties.
If you're an individual partner, you must report all of the information you include on T5013 on your T1 General Income Tax and Benefit Return.
If you're a corporation, you must report all of the information you include on T5013 on your T2 Corporation Income Tax Return, and if you're a trust, report it on your T3, Trust Income Tax and Information Return.
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