Tax reporting for sub-contractors, particularly in the construction and real estate industries, is expected to come under greater scrutiny this year by Canada Revenue Agency. The government is trying to cut down on the underground “cash” business, or employees who are claiming to be businesses to claim tax deductions they wouldn’t otherwise be eligible for.
So, if your primary business activity is construction, you must report amounts paid or credited for construction services by filing a T5018 information return. This consists of the T5018 summary and related T5018 slips. The filing deadline for these slips is February 28, 2011.
At a recent Canadian Tax Update seminar, we learned that Canada Revenue Agency is expected to be much more vigilant in enforcing penalty provisions for non-compliance (i.e. not filing the T5018). So please ensure you get them in by the filing deadline, and discuss voluntary disclosure for prior years.
Discuss this with your tax advisor to avoid penalties and interest.construction, cra, real estate, tax, tax calendar