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Partnerships - Not Statute-Barred If No T5013 Filed

Subject: Partnerships Number: 04-09 Date: 4/2/2004

Filing a Partnership Return Ensures Partnership Income becomes Statute-Barred

A Canadian partnership is required to file an annual T5013 Partnership Information Return.

Under Canada Revenue Agency's administrative policy, certain partnerships are not required to file this return, including: (a) partnerships with five or fewer members throughout the fiscal period where no member is another partnership; (b) certain limited partnerships whose only activity is investment in flow-through shares; and (c) partnerships whose members are all status Indians whose income from the partnership is exempt under the Indian Act.

The time period for assessment is within three years from the later of the day a partnership return is required to be filed and the day the return is filed.

If no partnership return is filed, then the CCRA could take the position that the partnership information is never statute-barred. This means that CCRA could re-assess partnership information after the usual three-year period.

Accordingly, where no partnership return is required, it is still advisable for partnerships to file a return as filing starts the limitation period and may protect partners from a potentially unlimited reassessment period.

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