Tax & Trade Blog

"Reverse and rebill" situations are very common in the Oil, Gas and Petrochem industry, especially in situations where goods are delivered in one reporting period but invoiced (or reversed and rebilled) in another reporting period because of formula-based pricing. There are a number of other situations where it is also necessary to "true-up" commercial invoice previously issued, and the GST/HST reporting and remittance requirements in these situations are counterintuitive.

Unwary businesses often face subsequent CRA assessments for taxes not collected, with the CRA taking the position that taxes were required to be collected on the issuance of both invoices unless proper credit note steps are taken.

With May 31^st deadline quickly approaching for Canada’s first mandatory Annual Reports on Forced Labour, many in the Oil, Gas & Petrochem sector may have missed these requirements completely!

Making matters worse, Public Safety Canada’s recently released updated guidance (the “New Guidance”) on Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “FCLA”) leaves a number of “scope” questions unanswered.

The new year brings an important new reporting obligation likely affecting most Canadian and many US-based Oil, Gas and Petroleum businesses – and sadly, the in-house Customs & Trade Professionals they employ!

New Canadian Forced Labour Legislation / Reporting Requirements

Canada’s Bill S-211, Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “FCLA” and “Forced Labour”), came into force on January 1, 2024.  These new Forced Labour rules are broadly aimed at eradicating Forced Labour from Canadian supply chains, by establishing annual reporting requirements, banning related imports and increasing non-compliance penalties.