Tax & Trade Blog

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GATHERING DOCUMENTS BEFORE AN AUDIT

 KNOWING WHAT TO PROVIDE IS KEY - BUT MAY REQUIRE EXPERT LEGAL GUIDANCE

Businesses often respond to the initial communications from the Canada Revenue Agency (“CRA”) without much thought. In the early stage of an Audit, the whole process can seem deceptively casual. Handling things this way can be a huge mistake. Knowing what one is – and is not – required to provide the CRA is often critical to how the Audit progress, especially for large businesses.

In this Tax Audits blog, we review some of the more common hazards for taxpayers during this preliminary, seemingly simple stage of the Audit, and illuminate why the information gathering process can be hugely consequential.

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OECD ADAPTS TO REMOTE WORK ECONOMY

HOME OFFICES AS POTENTIAL PERMANENT ESTABLISHMENTS IN REMOTE WORK ERA

On November 19, 2025, the Organization for Economic Co-operation and Development (“OECD”) released an update to the OECD Model Tax Convention on Income and on Capital (the “2025 Update”).

Among the changes are important clarifications to the Commentary on Article 5, dealing with the meaning of Permanent Establishment (“PE”) – and more specifically directed at helping determine when an individual’s home office may constitute a PE of the enterprise engaging the worker.

In a world increasingly shaped by remote work, changes like these are timely and likely only the beginning of further developments – and tax audits!

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GROWING GST RISK FOR COMMERCIAL BUILDERS?

PRESSURE TO GRANT GST REBATES NOW A HARBINGER OF AUDIT ISSUES TO COME

A good friend who’s a lawyer in the thick of things in the commercial building space recently prognosticated that with all of the pressure on Commercial Builders to close new home and (particularly) condo deals, they have been granting GST/HST New Housing Rebate credits that may not ultimately pass muster.

We review the latent liability risk that may be facing Commercial Builders below.

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SALE OF MIXED USE REAL PROPERTY PROBLEMATIC

ONTARIO COURT IDENTIFIES CHALLENGES OF SELLING RESIDENTIAL / COMMERCIAL PROPERTY

Most real property owners in Canada are aware that their tax obligations may differ depending on whether a property is used for residential (such as renting as a home or apartment) or for commercial purposes (such as renting for business use).

A recent Ontario Superior Court decision identifies problems that can arise from poorly drafted Agreements for Purchase and Sale (“APS”) and highlights the need to obtain proper GST/HST advice before signing such agreements.

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BC EXTENDS PST TO NEW SERVICES

PROVINCE ANNOUNCES EXPANSION OF SALES TAX TO PROFESSIONAL SERVICES

British Columbia has recently announced a further expansion of its Provincial Sales Tax (“PST”) base – a move that will not surprise those who have watched the province’s post-HST trajectory.

BC briefly participated in Canada’s Harmonized Sales Tax (“HST”) system in 2010, only to exit following a 2011 referendum and revert to its standalone PST system in April 2013. Since returning to a traditional retail sales tax model, the defining feature of PST policy has been base expansion – likely to help address recent provincial fiscal commitments and infrastructure projects.

We review the latest plan below.