Revenue Minister announces modifications to simplify contract payment reporting
Ottawa, December 13, 1999... The Honourable Martin Cauchon, Minister of National Revenue and Secretary of State responsible for the Economic Development Agency of Canada for the Regions of Quebec, today announced changes to the Contract Payment Reporting System for the construction industry.
Mandatory contract payment reporting first was announced in the February 1998 budget by the Honourable Paul Martin, Minister of Finance, as part of the federal government's efforts to promote compliance with tax laws and combat underground economic activity in the construction industry. Details of the Contract Payment Reporting System were announced in December 1998 by the Honourable Herb Dhaliwal, former Minister of National Revenue.
"These modifications are a direct result of our ongoing consultations with the construction industry," Mr. Cauchon said. "Over the past few months, we have received many excellent recommendations on refining reporting mechanisms, and we have modified the system to address these views."
Modifications to the Contract Payment Reporting System include:
- As of January 1, 1999, businesses whose principal activity is construction must ensure they record and keep the name, the amount paid, and the identifier number (Business Number or Social Insurance Number) of their subcontractors. While reporting the address of the subcontractor is now optional, contractors are encouraged to provide this information.
- The due date for reporting contract payment information has been extended to June 30, 2000 (from March 31, 2000) for those companies whose reporting periods end during 1999.
- Contractors now have a choice in how they file their information:
- The payment information can be provided on the T5018 Information Return. This form includes T5018 Information Slips (Statement of Contract Payments) and a T5018 Summary of Contract Payments.
- Alternatively, the information may be reported on a line-by-line basis in a column format with the appropriate summary information.
Canada Customs and Revenue Agency (CCRA) encourages contractors to use the T5018 Information Return to ensure appropriate information is provided. Also, CCRA reminds contractors that although they are not required to provide information slips to subcontractors, they should be provided where possible.
Mr. Cauchon said his officials will continue to consult with the construction industry to ensure an effective and efficient system for reporting information.
"It is important that the Contract Payment Reporting System work easily and well," the Minister said. "To ensure it is working smoothly, we will review the system with the construction industry at the end of the first two reporting cycles."
For more information on the Contract Payment Reporting System, visit CCRA's Internet site at: www.cra-arc.gc.ca/contract
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