What is the late filing penalty for Form T5013?

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Answer

The partnership information return and partner slips, including the reporting of non-resident partners. The exposure on this kind of filing is charged by reference to the form and the delay rather than to the tax, which is why an unfiled year with no tax can still be expensive.

What a late filing costs

The partnership information return and partner slips, including the reporting of non-resident partners.

Two of the firm’s advisers at the glass desk in the Delhi office

The exception that catches people

The partnership pays no tax and determines everyone's. Allocation and source of income decided here flow into each partner's return in each country, and non-resident partners bring withholding questions the partnership has to answer.

What is the late filing penalty for Form T5013?
ItemAmount
Income taxed in both countriesC$132,000
Tax paid abroad (assumed 30%)C$39,600
Home tax on the same income (assumed 44%)C$58,080
Credit available (lesser of the two)C$39,600
Home tax still payableC$18,480

The credit absorbs C$39,600 and leaves C$18,480 payable at home, because the home rate on this income is the higher of the two. The balance is real cash and it is due on the home timetable, which is why instalments get raised in the first meeting.

Illustrative figures, not a client engagement: the amounts are chosen to make the mechanism legible, and the rates and thresholds are assumptions stated for the example only. We confirm every one of them against the issuing authority for your own tax year before anything is filed.

Your next step

The full treatment — who it binds, the deadline, the penalty and the fixed fee — is on T5013 — partnership information return. If a letter prompted this, bring the letter — it usually contains the answer to half the questions.

Reviewed for the 2025 and 2026 filing seasons by Udit Gupta, Cross-Border Tax Expert, Legal Quotient Consultants. General information, not advice for your circumstances — call our 24-hour helpline to discuss your own position.

Penalty for not declaring foreign bank account, in practice

Most readers of this page are looking for penalty for not declaring foreign bank account. What follows sets out how it works for Form T5013: who is caught by it, what has to be filed, and what the work costs, agreed before it begins.

Cross-border tax case studies

Case study 1

Unfiled partnership returns found when a partner's overseas adviser asked for slips

A Canadian partnership had not filed its information return for several consecutive years. Nobody noticed until an overseas adviser acting for one partner asked for the slips supporting a foreign claim. We reconstructed the allocation for each open year from the partnership agreement and the accounts, reconciled the partners' capital accounts to the same figures, and prepared the outstanding returns and slips as one set. The engagement produced a filed history for every open year and a single allocation each partner could use in both countries, rather than one figure at home and a different one abroad.

Read how this one runs
Case study 2

Late partnership return where a non-resident partner had never been addressed

The partnership had admitted a partner living outside Canada and carried on filing as though nothing had changed, then stopped filing altogether. We established what each allocated amount actually was, took the partner's residency evidence onto the file, and set out in writing how the non-resident share was to be treated on the way out of Canada. The outstanding returns were then filed on that basis. What the work produced was a documented withholding position for the non-resident share, and slips the partner could hand to their own adviser.

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Case study 3

Reissued partner slips after allocations were filed against the wrong agreement

A partnership had filed on time, but on percentages taken from a superseded version of its agreement. Partners had already filed personal returns on the slips. We compared the executed agreement with the accounts, rebuilt the allocation for the years affected, and prepared amended slips together with a note explaining the change for each partner's file. The result was a corrected set of returns and slips, and amendments for the partners affected, filed in an order that left nobody reporting a figure the partnership had withdrawn.

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Case study 4

Partnership that received a demand to file before it came to us

The partnership arrived with a demand for outstanding information returns and an earlier penalty already on its record. We treated the demand as the fixed point in the timetable and worked backwards: the accounts were closed for each open year, the allocation settled with the partners, and the returns filed in date order. We also wrote up what had gone wrong in the bookkeeping that let the years accumulate. The engagement produced the filed returns, and a written account of the compliance history for the partners to hold.

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Case study 5

Investment partnership that believed it sat below the filing requirements

The partners had been told the structure was too small to file and had relied on that for years. We tested the position against the filing requirements themselves rather than the recollection of them, and found the partnership inside them for part of the period and outside them for the rest. The outstanding years were prepared and filed; the years genuinely outside were documented as such, so the question would not be reopened at the next change of adviser. The output was a filed record for the years that needed one and a written basis for the years that did not.

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Case study 6

Historic partnership filings cleared before a wind up and final distribution

A partnership was closing and the partners wanted their capital out, but several information returns were still outstanding and the final allocation could not be agreed until those existed. We prepared the overdue returns and slips first, in order, so each partner's running allocation was fixed, then dealt with the closing year. A partner was outside Canada, so the source of each closing amount had to be stated rather than assumed. The engagement produced a complete filing history to the final year and a final allocation the partners signed off.

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Case study 7

Accounts Reported Late When the Income Already Was

Where the income was on the return and only the account report was missed, a narrow route allows late filing with a reason attached. It is open only while no income is unreported and no examination has begun, which is why it is checked first.

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Case study 8

An Estate Using Its Graduated Rates in Time

The favourable rate treatment an estate can access is time-limited and conditional, and it is lost by administration rather than by decision. The file identifies the window and the filings that keep it open.

Read how this one runs

All case studies — every published engagement in one place.

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Asked next about Form T5013

Does the CRA late filing penalty apply if the partnership owes no tax?

The ordinary late filing penalty is worked out on a balance owing. For the 2025 tax year it is 5 per cent of that balance, plus 1 per cent for each full month the return is late, to a maximum of twelve months. A partnership does not pay the tax on its own income, so on a partnership information return there is usually no balance for that calculation to bite on. The exposure sits on the form and the delay instead. That is why an unfiled partnership year with no tax in it can still be expensive, and why the fact that nothing was owed is not an answer to the letter.

Can my partners file their own returns before the late T5013 is done?

They can, and sometimes they have to, but they are then filing on figures the partnership has not yet fixed. The allocation and the source of income are decided on the partnership return, and both flow straight into each partner's own return, in each country where a partner files. If the late return changes either, every partner's filing has to be amended behind it. Where a partner files in two countries an amendment is two amendments, on two timetables. It is usually cheaper to settle the allocation first and file once.

We filed the T5013 late two years running, so is the penalty doubled?

No. Repetition on its own is not what triggers the higher figures. For the 2025 tax year the higher rate applies where the CRA issued a demand to file and had already charged a late filing penalty in any of the three preceding tax years: 10 per cent of the balance owing, plus 2 per cent for each full month the return is late, to a maximum of twenty months. Both conditions have to be met. Twenty months is also not double twelve, so the higher figures are not simply the ordinary ones doubled. If a demand has been received, say so at the first meeting, because it changes the order of the work.

Does interest keep running while the partnership return sits unfiled?

The penalty itself does not compound. Interest does: it compounds daily on an unpaid balance. On a partnership the two come apart, because the partnership is not the party holding the balance. The tax on partnership income is assessed on the partners, so interest accrues on their accounts while the slips they need are still outstanding. A partner who cannot see their allocation cannot pay the right amount, and the interest carries on regardless. That is the reason to get the slips dated and issued before arguing about anything else.

How do we report a non-resident partner on a T5013 filed late?

The same way as on a timely one, and that is the point: the late return still has to state the allocation and the source of each amount, and a non-resident partner's share brings withholding questions the partnership has to answer rather than pass along. Before the return goes in, the partnership needs the partner's residency evidence on file and a settled view of what each allocated amount actually is, because the character of the income and the partner's residence together decide how it is treated on the way out of Canada. Filing first and asking afterwards is how partnerships end up amending.

Should we fix the allocations before filing the overdue partnership return?

Yes, in almost every case. An overdue return filed on allocations that do not match the partnership agreement produces slips that are wrong, and those slips have usually been used by the time anyone notices. Each partner then carries a filing built on a figure the partnership has since changed. Reconstruct the allocation from the agreement and the accounts, agree it with the partners, then file. Fixing the order of the work costs a few weeks; fixing it afterwards costs an amended return for every partner, in every country where one of them files.

Does a foreign-owned US entity need an EIN?

Yes, for almost anything it must do: file its returns, operate payroll, open a bank account, and act as a withholding agent on payments abroad. It is applied for on Form SS-4, and the part that stalls foreign owners is the responsible party — a real person with a US identification number is expected, and where none exists the application route and the supporting explanation both change. It is worth starting early because downstream registrations queue behind it. See EIN applications.

Do I pay tax twice on a foreign dividend?

Not at full rates if the relief is claimed. The paying country usually withholds at source, capped by treaty where one applies and the paperwork is in place; your residence country then taxes the dividend and credits the foreign withholding against its own charge. Where the withholding exceeded the treaty rate because no declaration was filed, the excess is recovered from the paying country, not credited at home. See the dividends article.

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