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September 18, 2010

New filing requirements for partnerships

According to the Canada Revenue Agency, starting in 2011 the requirement related to the number of partners in a partnership will be replaced with a new requirement based on financial activity and the requirement to file based on the types of partners will be revised. The new requirements apply to all partnerships for fiscal periods ending in 2011 and later.

In 1989, a regulation was added to the Canadian Income Tax Regulations requiring all partnerships to file an annual information return. Under certain conditions, the CRA has exempted partnerships with fewer than six partners from filing. However, over the last 20 years, the Canadian economy and business landscape have evolved, showing that business activity and assets held by a partnership, as well as the complexity of a partnership's structure, are more significant for tax matters than the number of partners.

Along with the changes to the filing requirements, the CRA will introduce a revised information return and tax guide for partnerships in 2011. For more information, go to www.cra.gc.ca/partnership.

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Posted by Taxes.ca Editorial Team [permalink]

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