The CRA Guide for T5008’s explains how to prepare this form, to account for the Return of Securities Transactions. This form reports purchases and sales of securities. Transactions are reported to all persons; individuals, corporations, partnerships, trusts, or ANY other person residing in or outside Canada.
Who has to file a T5008 Information Return?
- every trader or dealer in securities who buys a security as principal (for their own account) or sells a security as an agent or nominee for any vendor;
- every person in the business of buying and selling precious metals in the form of certificates, bullion, or coins who makes a payment to another person for a sale of precious metals by that other person;
- every person who, as a nominee or agent for another person, gets the proceeds of a sale or other transaction carried out in the name of the nominee or agent;
- every person who makes a payment to, or acts as a nominee or agent for, an individual resident in Canada for the disposition or redemption of a debt obligation in bearer form; and
- every person (other than an individual who is not a trust) who acquires, redeems, or cancels a security issued by that same person, except when the transactions involve the following:
- exchanges of shares for new shares in the course of a reorganization of the capital of a corporation (section 86), if no consideration other than the new shares is receivable;
- securities disposed of when a partnership ends [subsection 98(3)];
- securities transferred when a new partnership is formed from a predecessor partnership [subsection 98(6)];
- convertible property (section 51), that is, when a corporation’s shares, bonds, debentures, or notes are exchanged for shares of the same corporation and no consideration other than the new shares is receivable;
- redemptions, cancellations, or acquisitions of securities made during an amalgamation (section 87); or
- exchange of capital property that is a convertible debt obligation for another debt obligation under section 51.1.
If cash or some other consideration totalling $200 or less is received instead of a fractional interest in shares during an exchange to which section 51 or 87 applies, you do not need to report the transaction. If the cash or other consideration is more than $200, you have to report the entire exchange transaction.
You do not need to file a T5008 information return for:
- a purchase of a security by one trader or dealer in securities from another, other than a non-resident trader or dealer in securities;
- a sale of a security by a trader or dealer in securities for another trader or dealer in securities;
- a sale of currencies or precious metals in the form of jewellery, works of art, or numismatic coins;
- a sale of precious metals if you ordinarily produce or sell precious metals in bulk or commercial quantities;
- a redemption, acquisition, or cancellation of a debt obligation by the issuer or agent when:
- the debt obligation was issued for its principal amount;
- the redemption, acquisition, or cancellation satisfies all of the issuer’s obligations;
- there are no disproportionate payments of principal and interest to any person with an interest in the debt obligation; and
- an information return other than a T5008 information return is required as a result of the redemption, acquisition, or cancellation;
- a sale of securities by a trader or dealer in securities on behalf of a person who is exempt from tax under section 149 (for example, municipalities, registered charities, non-profit organizations, and registered retirement savings plans);
- transactions reported under section 202 or 204 of the Income Tax Regulations;
- a deemed disposition of a security; or
- the expiry or exercise of an option, right, or warrant.
When is it due?
You have to file your T5008 information return on or before the last day of February following the year to which the information return applies. For example, if you are filing a T5008 information return for 2009, it has to be filed on or before the last day of February, 2010. If this date falls on a Saturday, Sunday, or statutory holiday, your information return is due on the next business day. Note that several provinces and territories have their own unique holidays. Therefore, due dates may be affected depending on where you reside. For a list of public holidays, visit www.cra.gc.ca/duedates.
Cessation of Business:
If you end your business or activity, you have to file a return for the year or part of the year no later than 30 days after the date the business or activity ended.
You can send recipients an electronic copy of their T5008 slips. The recipient must have consented in writing or by email to receive the slips electronically.
Send the recipients’ copies of the T5008 slips to their last known address or deliver them in person. You have to do this on or before the day you have to file the T5008 information return.
From the IRS;
A W-8BEN must be signed and dated by the beneficial owner of the income. If the beneficial owner is a;
Individual – That person must sign and date the form. The capacity line should be left blank. For a minor child, a parent or guardian may sign and must enter “parent” or “guardian” where applicable on the capacity line.
Corporation – The form must be signed and dated by the President, VP, Treasurer, Assistant-Treasurer, CAO,, or any other officer, such as the Tax Officer, who has the authority to sign. Forms signed by a receiver or trustee in bankruptcy on behalf of a corporation must be accompanied by a copy of the order or instructions of the court signing the form.
Partnership – A general partner or member manager must sign and date the form. If the form is filed on behalf of a partnership by a trustee, receiver or assignee, the fiduciary must sign instead of a general partner or member manager. Forms signed by a receiver or trustee in bankruptcy on behalf of a partnership must be accompanied by a copy of the order or instructions of the court authorizing signing of the form. The capacity line must state the tile of the person signing on behalf of the partnership.
Estate or Trust – A fiduciary must sign and date the form. The capacity line must state the fiduciary’s title – such as trustee, administrator, or executor.
* fiduciary – A person or institution which occupies a position of special trust and has responsibility for the money, property or financial affairs of another
A couple items are coming down the pipeline at the CRA – so say my sources in Headquarters in Ottawa. Since They are a couple years off at best, here are the main 2 which will have a significant impact on the general public, especially in industries where there is a lot of filing of slips and returns to be done.
These items were announced in the 2009 budget on January 27, 2009.
1) Mandatory Electronic Filing for Information Returns – The CRA is tired of getting paper, loads and loads of paper which they then haev to key into their systems which is why they began converting systems about 10 years ago, so they could accomodate the vast amounts of informatin tehy expect to be receiving electronically.
Yes, a lot can be filed with the CRA electronically, on CD rom, or directly through the website, but going forward the CRA will charge a penalty to those filing in any way other than electronically through their website or via XML filing. A smart move!
2) The CRA is in the process of developing a Canadian equivalent to the US W8 / W9 forms which require residents and non-residets of the US o complete valid forms and submit them to transfer agents in order to qualify for a reduced amount of tax withholding, if applicable.
From what I’m told these forms will go hand in hand with the NR4 form and will be a Canadian version, so light on the requirements for now, but used by the CRA going forward. Actually, my sources tell me that these forms will only need to be completed by people whose actual residential address is unknown since the CRA uses that address (domicile) for determining the treaty rate.
Sounds like good times are coming… Tell you friends.
The IRS has started putting together a new group to focus on international tax issues, including offshore bank accounts used to evade taxes.
An IRS unit that deals with large corporations and large partnerships has posted job openings for several positions in a new group that will “focus on examinations involving the complicated business arrangements and entities controlled by the high-wealth taxpayer segment,” according to IRS spokesman Frank Keith.
It shows the agency is “taking this very seriously,” says Roy Black, an attorney at Black, Srebnick, Kornspan & Stumpf. The IRS looks to be assembling a “more sophisticated” group of examiners for the group, judging from the job postings, Black adds.
The group was formed to follow on a pledge by IRS Commissioner Doug Shulman to beef up international tax compliance, partly through a crackdown on people who use offshore accounts to evade taxes. President Obama’s 2010 budget earmarked extra IRS funds for this purpose.
IRS spokesman Keith said it would “be premature at this time to discuss further specifics” of the group that’s being formed.
I think the IRS should open up more than one phone line for international entities and actually have their officers be patient and understanding that those who are calling from say, Canada, may not understand the IRS way of operating and may need some tender love and care. As it is, they come across on this line, from Pennsylvania, as being pompous, arrogant know-it-alls, unwilling to take a few minutes to explain anything to the callers.
At least that is my impression in the dozens of times I have called this line and spoke to a Mr. Jones, Mr. Smith or Agent 345678.
Is it too much to ask for some customer service too… Not everyone calling is a criminal!