Filing the T5013 Partnership Information Return is a vital task for any Canadian partnership. Whether your business is small or large, understanding your tax filing responsibilities is essential for compliance and efficient financial operations. This blog will provide a detailed overview of the T5013 form, its requirements, a complete filing process, key considerations, and how Ease to Compliance can support your partnership’s filing needs.
What is the T5013 Partnership Information Return?
The T5013 Partnership Information Return is a tax return that partnerships in Canada use to report their financial information to the Canada Revenue Agency (CRA). While partnerships themselves are not directly taxed, the income or loss is passed through to the individual partners, who report it on their own income tax returns.
This return includes:
- Financial statements of the partnership
- Details of income, losses, capital gains, and other tax items
- Allocation of these figures among partners
- T5013 slips issued to each partner, reflecting their respective share
The CRA uses this information to verify the accuracy of each partner’s individual tax return. Filing accurately and on time also helps avoid costly penalties and audits.
Who Needs to File a T5013?
You must file a T5013 Partnership Information Return if your partnership meets any of the following conditions:
- It carries on business in Canada
- It is a Canadian partnership with Canadian or foreign operations
- The total of revenues plus expenses exceeds $2 million
- The partnership’s assets exceed $5 million
- It is a Specified Investment Flow-Through (SIFT) partnership
Even if a partnership isn’t required to file, it may still do so voluntarily. Filing can provide transparency, particularly when there are many partners or foreign partners involved.
Exceptions
Certain farming or fishing partnerships and joint ventures may be exempt. It’s always best to verify your situation directly with CRA guidelines or a professional tax advisor.
Key Documents and Information Required
Before filing, partnerships should gather:
- Business Number (BN)
- Partnership agreement
- Financial statements (income statement, balance sheet)
- Each partner’s SIN or business number
- Capital account balances
- Allocation details (based on partnership agreement)
- Adjusted Cost Base (ACB) of each partner’s interest
Having this information ready ensures accurate T5013 slips and avoids discrepancies on partner tax returns. It also ensures smoother coordination between accounting and legal teams.
How to Complete and File the T5013 Partnership Information Return
Step 1: Assess Filing Obligations
Use CRA’s eligibility guidelines to confirm whether your partnership must file. If you’re unsure, consult a tax professional.
Step 2: Prepare Financial Statements
Ensure your income statement and balance sheet are up to date. These must align with your fiscal period and should reflect any major financial activities.
Step 3: Complete the T5013 Summary and Slips
Use CRA forms:
- T5013 Summary: Consolidates total income/loss and allocations
- T5013 Slip: Prepared for each partner, showing individual allocations
You’ll need to allocate:
- Net income or loss
- Capital gains or losses
- Foreign income
- Tax credits
- Other relevant tax elements
It is important that these allocations strictly adhere to the terms defined in your partnership agreement.
Step 4: Distribute T5013 Slips to Partners
Distribute slips by the deadline so each partner can file their tax return accurately and on time. Partners may need these slips for both personal and corporate filings.
Step 5: File With the CRA
The return must be filed electronically if:
- The partnership has more than 5 partners
- The CRA mandates electronic filing based on prior returns
The CRA provides web forms and XML filing options for electronic submission.
Filing Deadline: The T5013 return is due five months after the end of the partnership’s fiscal year. For example, if the fiscal year ends December 31, the return is due by May 31 of the following year.
Make sure to keep records of all correspondence and confirmation numbers after submission.
Additional Considerations
Tax Credits and Deductions
When preparing the T5013 slips, don’t forget to include applicable tax credits, such as:
- Scientific Research and Experimental Development (SR&ED) credits
- Foreign tax credits
- Investment tax credits
Each partner should be informed of any carry-forward or carry-back implications these may have on their tax situation.
Adjusted Cost Base (ACB) Tracking
Maintaining accurate ACB figures is critical for partners. Errors in tracking capital contributions, withdrawals, and profit allocations can result in incorrect capital gains reporting.
Changes in Partnership Composition
Changes such as partner additions or withdrawals must be carefully recorded and reflected in the T5013. Consult your legal advisor and accountant when changes occur.
Penalties for Non-Compliance
Failing to file a T5013 return when required can result in:
- Penalties: $25/day up to a maximum of $2,500
- Additional fines for intentionally failing to file
- Audit flags: CRA may audit both the partnership and the partners
Filing incorrect or incomplete information may also lead to reassessments or disputes. To avoid this, many partnerships hire tax professionals or rely on advanced accounting software.
Common Mistakes to Avoid
- Misallocating income or losses among partners
- Using outdated forms or software
- Omitting key schedules (e.g., foreign income, capital gains)
- Missing or incorrect partner information (SIN/BN)
- Filing past the deadline
- Failing to update CRA on changes in partner information or fiscal year-end
Being proactive with bookkeeping and communication among partners can reduce errors and improve tax outcomes.
Benefits of Filing the T5013 Correctly
- Avoid penalties and audits
- Ensure partners receive proper tax credits and deductions
- Maintain accurate financial records
- Simplify tax filings for all partners
- Demonstrate professionalism to investors, financial institutions, and CRA
- Build a solid compliance track record for future transactions and financing
How Ease to Compliance Helps With T5013 Filing
At Ease to Compliance, our firm assists Canadian partnerships with every aspect of T5013 filing:
- Verifying if your partnership is required to file
- Gathering and organizing financial data
- Accurately completing T5013 slips and summary
- Electronic submission to the CRA
- Ensuring timely distribution to all partners
- Post-filing support, including handling CRA queries or audits
- Year-round bookkeeping and advisory for better compliance readiness
Our team is experienced in simplifying the filing process, reducing compliance risks, and helping you focus on growing your business. Whether your partnership has two partners or two hundred, we ensure your partnership stays ahead of changing tax laws and reporting obligations.
To get started or for more details, contact us today.
Final Thoughts
Filing the T5013 Partnership Information Return in Canada is a legal requirement for many partnerships and an important step in maintaining financial transparency. While the process can be detailed and technical, it is essential for accurate tax reporting and avoiding CRA penalties.
Let professionals like Ease to Compliance handle the paperwork, so you can focus on building your business. Our tailored services provide peace of mind and ensure you’re fully compliant with CRA expectations.
FAQs On T5013 Partnership Information Return in Canada
Question 1. What is the difference between a T5013 slip and the T5013 Partnership Information Return?
Answer: The T5013 slip is the document issued to each individual partner showing their share of income or loss from the partnership, while the T5013 Partnership Information Return is the overall return filed by the partnership with the CRA summarizing the entire partnership’s financial information.
Question 2. Can foreign partners in a Canadian partnership receive a T5013 slip?
Answer: Yes, foreign partners in a Canadian partnership are entitled to receive a T5013 slip reflecting their share of income or losses. The partnership must ensure proper allocation and reporting to comply with CRA regulations.
Question 3. Are there any software options recommended for filing T5013 returns electronically?
Answer: While the CRA allows electronic filing through XML formats or web forms, many accounting firms and partnerships use specialized tax software such as TaxCycle, ProFile, or others certified by the CRA to streamline T5013 filing. Consulting with a tax professional can help select the best software for your needs.
