Tax Information

For schedule K-1 support or if you are a registered Canadian resident unitholder with questions on form T5013, please call our tax package support team at (844) 364-7561
or click here

Adjusted Cost Base of Units 2016

Canadian Taxable Income 2016

Withholding Tax Information for Distributions 2016

K1/T5013 Tax Package Support

General U.S., and Canadian Tax Summary

The following discussion is intended to provide a general explanation of the U.S. and Canadian tax treatment of holding Brookfield Business Partners units. For a more detailed and comprehensive discussion of the U.S. and Canadian tax treatment please refer to Brookfield Business Partners' most recent annual report on form 20-F.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular holder of Brookfield Business Partners units, and no representation with respect to the U.S. and Canadian income tax consequences to any particular holder is made. Consequently, holders of Brookfield Business Partners units are advised to consult their own tax advisors with respect to their particular circumstances.

Characterization of Brookfield Business Partners for Tax Purposes

Brookfield Business Partners is a Bermuda based limited partnership that is treated as a partnership for U.S. and Canadian tax purposes. Brookfield Business Partners is not a corporation or a trust. Brookfield Business Partners is a publicly traded partnership that does not earn active business income. Instead, Brookfield Business Partners generally earns interest and dividends from subsidiary corporations in various jurisdictions where the business is carried on.

Brookfield Business Partners units qualify for Individual Retirement Accounts (IRAs) . Brookfield Business Partners is a qualified investment for Registered Retirement Saving Plans (RRSPs), deferred profit sharing plans, Registered Retirement Income Funds (RRIFs), Registered Education Savings Plans (RESPs), Registered Disability Savings Plans (RDSs) and Tax Free Savings Accounts (TFSAs).

Partnership ID Numbers

Brookfield Business Partners' U.S. tax identification number (Employer Identification Number) is 98-1291692 and its Canadian tax identification number (Business Number) is in 766138895 RZ0001. Brookfield Business Partners does not have a Canadian tax shelter identification number.

Flow-Through Nature of Brookfield Business Partners

As a partnership, Brookfield Business Partners is a so-called "flow through" for U.S. and Canadian tax purposes. That is, Brookfield Business Partners is not subject to tax, instead its taxable income, (determined under U.S. tax rules using the U.S. dollar as its functional currency and under Canadian tax rules using the Canadian dollar as its functional currency) is subject to tax in the hands of its unitholders.

Taxible income for U.S. and Canadian tax purposes is unlikely to be equal because of (i) the different currencies used to compute the taxable income for each jurisdiction and (ii) the difference in the tax rules of the two countries applicable to the income and expenses of Brookfield Business Partners and its subsidiaries for a particular taxation year. Also, taxable income may not be equal to the distributions for a particular period. Brookfield Business Partner's taxable income may be comprised of various types of income and expenses and may include such items as interest income, foreign source dividends, local source dividends, eligible and qualified dividends, and short-term and long-term capital gains.

Generally, we expect Brookfield Business Partners’ taxable income to be mainly comprised of interest income net of management fee expenses.

Communication of Tax Information

After the end of Brookfield Business Partners’ taxation year (December 31), the U.S. and Canadian taxable income of Brookfield Business Partners is determined and allocated to all unitholders that are in turn required to report such income in their respective tax returns. The allocation of U.S. taxable income is communicated using Schedule K-1 (not a Form 1099). The allocation of Canadian taxable income is communicated using Form T5013 (not a Form T5).

All unitholders should receive a Schedule K-1 from Brookfield Business Partners. We are required to use reasonable efforts to send a Schedule K-1 to all unitholders (not just U.S. residents). Consequently, Canadian unitholders may receive a Schedule K-1 in addition to Form T5013. In general, Canadian resident unitholders may disregard the Schedule K-1 (unless for example, they are a U.S. citizen).

Schedule K-1 forms are anticipated to be mailed each year in early March for the prior tax year. If you are a U.S. unitholder and did not receive your K-1 for the previous taxation year please contact (844) 364-7561 or www.taxpackagesupport.com/bbu.

Canadian registered holders of Brookfield Business Partners units will receive a T5013 directly from Brookfield Business Partners. All other Canadian unitholders should receive a T5013 that is produced by their Canadian broker. Brookfield Business Partners uses the CDS Innovations facility to provide information to Canadian brokers to produce T5013 forms. If you are a beneficial Canadian resident unitholder and have any questions regarding the T5013 you should contact your broker. If you are a registered Canadian resident unitholder and did not receive your Form T5013 for the previous taxation year by the end of March, please contact (844) 364-7561 or www.taxpackagesupport.com/bbu.

Relationship of Taxable Income to Distributions

The computation of Brookfield Business Partners' annual U.S. and Canadian taxable income for a particular taxation year is independent of (i) the annual accounting income of Brookfield Business Partners; (ii) the annual cash generated by Brookfield Business Partners and (iii) the annual distributions of Brookfield Business Partners. As an investor in Brookfield Business Partners, holders are required to pay tax on their proportionate share of Brookfield Business Partners' taxable income. The U.S. and Canadian taxable income of Brookfield Business Partners is determined using U.S. and Canadian tax rules and will vary from year to year depending on the nature of the income of Brookfield Business Partners and its subsidiaries for the particular taxation year.

Please click here to download 2016 Canadian Taxable Income information

Tax Treatment of Distributions

Distributions received by Brookfield Business Partners' unitholders are not directly taxable in and of themselves. Distributions received reduce the tax cost of Brookfield Business Partners units. The distributions Brookfield Business Partners pays do not have a particular character or composition.

Withholding Tax Treatment of Distributions

The income Brookfield Business Partners earns from underlying subsidiaries includes dividends and interest paid by subsidiaries in jurisdictions that may levy withholding tax. Since Brookfield Business Partners is a "flow-through" for U.S. and Canadian income tax purposes, a portion of the income may be subject to withholding taxes levied by jurisdictions such as Canada and the U.S. The rate of withholding tax varies, amongst other factors, depending on a holder’s country of tax residence, type of ownership account, and whether holders have provided their broker (or Brookfield Business Partners’ transfer agent in the case of registered unitholders) with the appropriate Internal Revenue Service (IRS) Form and Canada Revenue Agency (CRA) Form. The type of documentation for U.S. withholding tax purposes will differ depending on a holder’s tax profile for U.S. tax purposes. We encourage holders to submit the appropriate IRS Form and CRA Form to their broker (or Brookfield Business Partners’ transfer agent in the case of registered unitholders) so their account can be (and will continue to be) certified and the most appropriate rates of withholding can be applied to distributions.

Please click here to download the 2016 Distribution – Breakdown for U.S. and Canadian Withholding Tax Purposes

Computation of Tax Cost

For U.S. and Canadian residents, in general, a unitholder's tax cost of his/her Brookfield Business Partners units should equal the sum of (i) the amount paid to acquire the units and (ii) the net taxable income allocated to the unitholder, minus the cash distributions received. If a Canadian unitholder receives distributions in U.S. dollars, the U.S. dollar distributions must be converted to Canadian dollar before reducing the tax cost of Brookfield Business Partners units for Canadian tax purposes. Brookfield Business Partners does not prescribe a particular foreign exchange rate that unitholders should use to make such conversions. Unitholders and/or their brokers would generally be expected to use the conversion rate on the date of receipt of the distribution.

The schedules distributed with Schedule K-1 compute the tax cost of Brookfield Business Partners units for U.S. residents.

For Canadian residents, the tax cost of units is generally determined in Canadian dollars so all three components should be determined in Canadian dollars. Brookfield Business Partners does not have sufficient information to determine the tax cost of units for each individual holder. Depending upon the particular taxation year, the T5013 will report various sources of income and expenses in a number of boxes on the form. The net taxable income allocated is the sum of the various income and expenses. Unitholders are obligated to accurately compute the tax cost of their Brookfield Business Partners units.

Please click here to download Adjusted Cost Base 2016 information

Other Tax Matters

Effectively Connected Income (ECI)
Brookfield Business Partners has not and is not expected to generate effectively connected income. Brookfield Business Partners' U.S. operations are carried out through its wholly owned U.S. resident subsidiary.

Unrelated Business Taxable Income (UBTI)
Brookfield Business Partners has not and is not expected to generate UBTI. UBTI is relevant to U.S. tax exempt entities.

Foreign Investment Real Property Tax Act (FIRPTA)
Non-U.S investors that own 5% or less of Brookfield Business Partners publicly traded units should not be subject to FIRPTA taxation on a disposition of their units. Investors that own more than 5% of Brookfield Business Partners publicly traded units may be subject to FIRPTA taxation on a disposition of their units.

Regulated Investment Corporations (RICs)
The 25% limitation imposed on the ownership of master limited partnerships (MLPs, technically “qualifying PTPs”) by regulated investment corporations has not been relevant to units of Brookfield Business Partners since Brookfield Business Partners is not a MLP (not a “qualifying PTP”) as defined for U.S. tax purposes because more than 90% of its gross income on an annual basis has been investment income. It is anticipated that more than 90% of Brookfield Business Partners’ income on an annual basis will continue to be investment income.

Specified Foreign Property

For the purpose of reporting foreign property by Canadian investors, pursuant to section 233.3 of the Canadian Income Tax Act, Brookfield Business Partners is not a specified foreign property and therefore does not need to be reported on Form T1135 – Foreign Income Verification Statement.

Tax Questions and Answers

I received units of Brookfield Business Partners in the special distribution to Brookfield Asset Management shareholders. Where can I find more information, especially on the commonly used method to determine the fair market value of the units for tax purposes?

Please refer to the link below for information on a commonly used method to determine the fair market value of the units for tax purposes, being the weighted average trading price of the units on the Toronto Stock Exchange and New York Stock Exchange for the five trading days commencing on June 20, 2016.

https://bam.brookfield.com/stock-and-distributions/tax-information

How can I obtain a tax credit for foreign taxes withheld?

The Forms 1099-INT and 1099-DIV prepared by your broker will include information on any foreign withholding taxes that were withheld by your broker so that you may claim them, if eligible, in your tax return as a credit and/or deduction. Because the withholding tax process is administered by the brokerage community rather than us, taxes withheld are only reported on Forms 1099-INT and 1099-DIV (and not on Schedule K-1).

Who applies the withholding tax? Why don’t I receive the full distribution amount?

Generally, our unitholders own their units in “nominee form” through brokers (also known as “beneficial” holders). Consequently, the brokers are responsible for withholding taxes as only they possess the requisite information about the unitholder that is necessary to calculate the appropriate amount to withhold as is typical for publicly traded securities. Because the withholding tax process is administered by the brokerage community rather than us, taxes withheld are only reported on Forms 1099-INT and 1099-DIV (and not on Schedule K-1) for U.S. holders. For Canadian unitholders, withholding taxes applied may not be included in the Form T5013. Information about the amount of taxes withheld is available in Canadian holders' monthly/annual broker statements.

As a Canadian taxpayer can I e-file my tax return if I own units of Brookfield Business Partners?

Yes, the Form T5013 you receive should include all information that is required by law for you to e-file your Canadian personal tax return.

Are units of Brookfield Business Partners considered foreign property for the purposes of the Canadian Revenue Agency T-1135 Form – Foreign Income Verification Statement?

No.

Does Brookfield Business Partners have a Quebec Tax ID Number or a Tax Shelter Identification Number?

Brookfield Business Partners does not have a Quebec number because it is non-resident of Quebec. Brookfield Business Partners does not have a Tax Shelter Identification because it is not a tax shelter.

1The U.S. dollar distributions must be converted to Canadian dollar before reducing the tax cost of Brookfield Business Partners units for Canadian tax purposes. Brookfield Business Partners does not prescribe a particular foreign exchange rate that unitholders should use to make such conversions. Unitholders and/or their brokers would generally be expected to use the conversion rate on the date of receipt of the distribution.