Tax related information for the Construction industry
Contract Payment Reporting System (CPRS)
Who has to report?
All individuals, partnerships, and corporations whose primary business activity is construction must report payments made to subcontractors.
What type of payments must be reported?
Payments to subcontractors for construction services must be reported. Goods-only payments should not be reported. Mixed service and goods payments must be reported if the total service component is $500 or more per year.
Who is a subcontractor?
A subcontractor is an individual, partnership, or corporation that provides construction services. Subcontractors include businesses which are below the $30,000 limit for goods and services tax/harmonized sales tax (GST/HST) registration purposes. Payments to recipients who provide other services, such as bookkeepers, janitors, and lawyers, do not have to be reported.
Reporting periods
Filers may report payments on either a calendar or fiscal-year basis. Payments made on a fiscal-year basis do not have to be segregated into the calendar year in which they are paid.
When is the information due?
Information returns must be filed within 6 months from the end of the elected reporting period. That is, no later than June 30 for those filers with a December 31 year-end and within six months for those with a year-end other than December 31.
How is information submitted?
The payment information may be provided in a T5018 Information Return, which consists of a T5018 Information Slip, Statement of Contract Payments and a T5018 Summary, Summary of Contract Payments. The summary states the total number of subcontractors and the total amount paid to them. Contractors are encouraged to use the slips and summary that are now available to ensure that all the required information is received. Beginning in January 2011, it will be mandatory to use the appropriate forms when filing these returns. Here are the links for each form:
