The Canada Revenue Agency has indefinitely delayed the implementation of some of the new tax filing requirements applicable to partnerships. This measure will significantly alleviate the tax compliance requirements for partnerships that have corporations and trusts as its partners.
The CRA had previously announced that a partnership, with a fiscal period that commenced on January 1, 2006, or later and which had corporations or trusts as its partners, would automatically be required to file the Form T5013 Partnership Information Return (PIR). Historically, partnerships with five or fewer members, regardless of whether the partners were corporations or trusts, were often exempted from filing the PIR.
By press release issued on March 29, 2007, the CRA announced that it would revert to its historic administrative position regarding whether a partnership was required to file the PIR. A partnership that has a corporation or trust as a partner will remain exempt from filing the PIR provided that it satisfies all of the following conditions:
In a nutshell, if a partnership continues to satisfy the historic exemption from the PIR filing, then the partnership will still not be required to file the PIR. Once the partnership no longer meets the exemption conditions, and commencing with the partnership's fiscal periods ending after 2006, it must submit to the CRA the re-designed version of the PIR. This re-designed PIR requires substantially more information to be reported compared to its former version.