Mandatory Construction Industry Reporting
The Canada Revenue Agency introduced the Contract Payment Reporting System in 1998.
If you are an individual or corporation earning 50% or more of your business income in the construction industry you are required to report the payments made to subcontractors to the Canada Revenue Agency each year. This information is reported to the Canada Revenue Agency on either a fiscal year or calendar year basis using the T5018 summary and supplementary forms. The report is due six months after the year end selected.
Examples of activities considered construction activities .
Payments to Report
Payments for materials only (no construction services) are not reported.
Payments to employees are not reported.
Payment for materials and construction services where the construction services exceed $500 are reported.
Payments for construction services only in excess of $500 are reported.
The payments reported should include GST/HST if applicable.
What Happens If I Do Not File?
A business that does not comply with the mandatory filing could be assessed failure to file penalties ($25 per day; minimum penalty $100; maximum penalty $2,500) as well as late filing penalties ($10-$75 per day; maximum $1,000-$7,500 – depending on number of subcontractors).
Additional information on the Contract Payment Reporting System can be obtained from the Canada Revenue Agency website.