Tax & Trade Blog

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NO EXCUSE FOR MISSED CRA PORTAL ALERTS

TCC CONFIRMS BUSINESS CARRIES ALL THE RISK WHEN DIGITAL PORTALS IGNORED

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A recent Tax Court of Canada (“TCC”) case highlights the harsh consequences of failing to monitor an online Canada Revenue Agency (“CRA”) portal, like MyCRA or My Business Account. In Web Listings Inc. v. His Majesty the King, 2026 TCC 101 (“Web Listings”), the TCC confirmed that if a business’s authorized representative receives online portal notifications and ignores them, the tax consequences for the business are severe.

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CRA ASSESSING DIRECTORS FOR GST MORE OFTEN

SIMILAR SURGE IN ASSESSING THIRD-PARTY TRANSFEREES, INCLUDING SHAREHOLDERS

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Most business owners assume a corporation’s debts belong to the corporation. For unpaid GST/HST, that assumption is often wrong.

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HOUSE FLIPPING & BRIEF OCCUPANCY

TCC FINDS TWO RENOVATED HOMES HELD AS INVENTORY – NOT RESIDENCES

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As we have noted before (here and here), the Canada Revenue Agency (“CRA”) continues to audit residential homeowners who build or substantially renovate homes for resale, regularly assessing them as “builders” liable to pay GST/HST.

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MYCRA LOCKOUTS HAVE REAL TAX COSTS

MINOR COURT WIN FOR TAXPAYERS WITH PORTAL ISSUES – BUT LITTLE REAL RELIEF

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A recent Federal Court (“FC”) case is a minor win for taxpayers who have struggled with the buggy, confusing mess that is the MyCRA web portal (“MyCRA”) run by Canada Revenue Agency (“CRA”). It also brings to light how serious MyCRA access issues can become.

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NOTICE OF ASSESSMENT NOT RECEIVED. CAN I APPEAL?

TAX COURT SETS FOUR-STEP PROCESS FOR GETTING NOTICES OF OBJECTION BACK ON TRACK

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When it comes to filing a Notice of Objection (an “Objection”) in respect of a Notice of Assessment (an “NOA”) for GST/HST or income tax matters – or many other matters involving federal taxes – most taxpayers will know that they generally have a 90-day window to file that Objection.

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EXCISE ACT 2001 RECORDKEEPING REQUIREMENTS

MORE THAN MEETS THE EYE — CRA’S STRINGENT REQUIREMENTS

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The Excise Act, 2001 (“EA 2001”) governs the taxation and regulatory framework applicable to specified goods, including tobacco, wine, spirits, and, more recently, vaping products. Recordkeeping requirements under the EA 2001 are among the most stringent in Canadian tax legislation. In our experience, CRA is increasingly relying on imperfect or incomplete records as a basis for assessing additional duty, interest, and, in some cases, significant penalties.

In this Indirect Tax Report, we review the statutory requirements for books and records under the EA 2001 and highlight key compliance risks and practical traps for industry participants.

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WHEN IS CANNABIS, CANNABIS?

CRA TAXING TRIM LIKE CANNABIS

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Cannabis cultivators and producers will generally be aware of the two-tier flat tax that applies to the production of cannabis products, such as pre-rolls. That is, a higher tax rate of $0.25 per gram applies to flowering material, while a lower tax rate of $0.075 per gram applies to non-flowering material – putatively on the basis that it is far less potent in terms of cannabinoid content (THC and CBD).

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加拿大转让定价规则获简化

新规解决老问题 —— 中小企业的文档准备要求

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SIMPLIFIED CANADIAN TRANSFER PRICING RULES

NEW RULES ADDRESS OLD PROBLEM: SMALLER BUSINESS DOCUMENTATION STANDARDS

For the English Version of this Report, please click here.

加拿大的转让定价规则最早于1997年引入。该规则要求加拿大企业与境外关联方进行交易时——例如，在跨国企业集团内部购买、销售或许可使用货物、服务及无形资产——必须保存书面资料说明其定价方式符合国际公认的独立交易原则。加拿大税务局（CRA）历来采用经济合作与发展组织（OECD）的《转让定价指南》作为审查依据。

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SIMPLIFIED CANADIAN TRANSFER PRICING RULES

NEW RULES ADDRESS OLD PROBLEM: SMALLER BUSINESS DOCUMENTATION STANDARDS

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Canada’s transfer pricing rules were first introduced in 1997 and essentially require Canadian businesses transacting with related foreign parties – for example, buying, selling or licensing goods, services and intangibles within a multinational corporate group – to maintain written documentation explaining how their prices comply with internationally accepted arm’s length principles. The Canada Revenue Agency (“CRA”) has historically adopted the OECD Transfer Pricing Guidelines for that purpose.

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HST CANNOT BE SET OFF AGAINST DEBTS OWNING

BCAA CONFIRMS HST CANNOT BE SET OFF AGAINST SUPPLIER’S DEBTS

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Many commercial agreements include broad rights of set-off, which sophisticated businesses use to net out liabilities between parties. While that seems straightforward in commercial terms, businesses run into problems when applying this practice to GST/HST. Under the Excise Tax Act, HST collected – or collectible – by a supplier is NOT the supplier’s money to begin with. Rather, it is money held in trust for the Crown.

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CRA REFUNDS: WHERE DID MY MONEY GO?

CRA EXPLAINS WHY TAX CREDITS ARE AUTOMATICALLY TRANSFERRED

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Many taxpayers expect that once the Canada Revenue Agency (“CRA”) determines that they are entitled to a GST/HST or income tax refund, that the refund will simply be paid. Unfortunately, that is often not the case (!) with the CRA explaining its “set-off” rights in a recent industry roundtable, confirming that where refunds are due, those amounts can often be automatically transferred to satisfy outstanding balances in other CRA tax accounts.

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CRA AUDIT SETTLEMENTS: IS THAT A REAL THING?

CRA EXPLAINS HOW AUDITS CAN BE SETTLED & WHO REALLY MAKES THE DECISION

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Many taxpayers assume that once a CRA auditor starts an Audit, the Audit needs to be completed, with no opportunity to reach an early settlement on contentious issues. To the contrary, CRA has recently confirmed that many Audits can, in fact, be settled – albeit only after being subject to additional internal review before becoming final.

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CRA BUSINESS ACCOUNT: AUTHORIZATION TRAPS

WHO CAN ACCESS WHAT?

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Most Canadian businesses assume that once an employee or professional advisor has been authorized to deal with the Canada Revenue Agency (“CRA”), that individual has the immediate ability to access and update all of the business’s online CRA information. As the CRA recently confirmed at an industry roundtable, that assumption is incorrect, with different authorization levels permitting different activities and access to one CRA Account not necessarily providing access to others.

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LATE TAX OBJECTIONS FACE STRICT DEADLINES

NO SECOND CHANCES WHEN APPLYING FOR AN EXTENSION OF TIME TO OBJECT

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A Notice of Objection (“NoO”) may be filed late – but ONLY if certain conditions and deadlines are met. Many taxpayers are unaware of the ability to apply for a late filing, and equally unaware that when THOSE deadlines are missed, it is all over!

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REMEDIES CONSTRAINED IN JUDICIAL REVIEW

FEDERAL COURT CONFIRMS REDETERMINATION REMAINS USUAL REMEDY

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An application for Judicial Review (“JR Application”) in the Federal Court can be an important tool for taxpayers to challenge decisions by the Canada Revenue Agency (“CRA”) that appear unreasonable, including decisions denying interest and penalty relief.

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IGNORING CRA COULD LEAD TO JAIL!

COURT ISSUES 30-DAY JAIL THREAT TO TAXPAYER FOR NONCOMPLIANCE

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We have previously written about Requests for Information ("RFI") issued to taxpayers under audit by the Canada Revenue Agency ("CRA") – and the importance of complying with CRA RFIs, with assistance from Experienced Tax Counsel.

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航空燃油销售 —— GST 纳税义务

CRA 认定“注入油罐”式燃油销售应税，企业面临实际 GST 风险

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Stored Aviation Fuel Sales – GST Liability

CRA Position on Taxable “Into-Tank” Fuel Sales Creates Real GST Risks

For the English Version of this Report, please click here.

航空业长期以来一直存在一个 GST/HST 问题：用于国际商业航班的航空燃油，如果并非直接加注至飞机油箱（“into the wing”），而是先交付至机场储油罐，是否仍可适用零税率。 加拿大税务局CRA在近期的圆桌会议讨论中继续坚持其立场，即由于存在燃油被转作其他用途的风险，交付至储油罐的燃油应缴税。

When a Canada Revenue Agency (the “CRA”) audit concludes and a Proposed Assessment issued, it is presented in a “Statement of Proposed Audit Adjustment”.  This document outlines the CRA’s Assessment of the additional taxes owed.  At this stage, significant work needs to take place to try and understand the basis for the Proposed Assessment and attempt to rebut the CRA’s Assessment position. 

Because CRA is the “elephant in the room” (and typically does what it wants to do), where an Assessment is finalized and raised, it is a very signification matter, for the following reasons.

If there was such a thing as a “10-Alarm” fire, CRA’s public release of GST Interpretation RITS 202403 would seem to fit that bill.

In this April 2023 Interpretation – issued only a few weeks ago – CRA takes the view that Employers with pension funds invested in an insurer’s segregated funds, are NOT eligible to claim ITCs for the GST/HST payable on the investment management fees (“IM Fees”) paid directly out of those funds.

On one level of analysis, CRA has done an about-face and reversed a prior 2012 Ruling in this area (which seemed to have addressed the same situation).  While CRA may disagree with that statement, this does appear to be a potentially significant “reinterpretation”.

While the government of Canada appears focused on the political hot potato that is our residential housing industry, announcing new rules for rental houses are coming,  the CRA is headed in the other direction, apparently targeting residential home-owners that have recently sold their homes, on the basis that the degree to which they fixed them up prior to sale caused the homes to become “new homes” and subject to full GST/HST on their fair market value.