Reporting is required by all businesses, whether carried on by an individual, partnership or corporation, whose principal activity is construction. For this purpose, construction is defined as “erecting, installing, altering, modifying, repairing, improving, demolishing, dismantling or removing any structure or part thereof”.

Payments to subcontractors for construction services must be reported if the amount paid for services is $500 or more (payments for goods are excluded). Subcontractors include businesses that are below the $30,000 limit for goods and services tax (GST) purposes.

The payments can be reported on either a calendar-year or fiscal-year basis. For example, assume your business's year-end is July 31, 2007. Your reporting return for 2007 can either report all payments from August 1, 2006 to July 31, 2007 or it can report all payments made from January 1, 2007 to December 31, 2007.

You must report to the CRA the name of the subcontractor, the business address, the subcontractor's Business Number (BN) or Social Insurance Number (if no BN is available), and the amount paid for the reporting period.

The information can be reported on either a Contract Payment Reporting Information return (form T5018) or, alternatively, the information can be reported on a line-by-line basis in a column format with the appropriate summary information.