In Canada, partnerships are businesses that are run by two or more people. Keep reading to find out what you need to know if you are part of a business partnership that pays taxes in Canada.
Unlike corporations, the business partnership itself has no tax obligations to fulfill. Instead, each partner must report their share of the business’s profits as self-employed income.
For example, you and your business partner might decide to split business profits 50/50. In this case, your personal income will be 50% of the business profits for the year. This means that if your business makes $80K in profits for the year, your income will be $40K. Report this amount on lines 135 and 143 of your income tax return.
You’ll also need to fill out form T2125, which is the Statement of Business or Professional Activities. Certain businesses must also fill out form T5013, which is the Statement of Partnership Income. This form only applies to larger businesses with assets worth more than $5M.
Read more About Partnership From CANADA REVENUE AGENCY
CRA Guideline For Partnership click here