Tax & Trade Blog

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TAX OBJECTIONS: WHAT HAPPENS NEXT?

APPEALS PROCESS MOVES SLOWLY UNTIL SUDDEN ACTION IS REQUIRED

As we have reported on, Canada Revenue Agency (“CRA”) and other government authorities appear to be ramping up their tax audit activity. While taxpayers have statutory rights to appeal assessments they view as incorrect by filing a Notice of Objection, what happens after filing those documents can be unclear.

Appeals processes initially move slowly and can feel a bit like a “black box”. Government officials are generally not forthcoming with updates, and it is not uncommon for taxpayers to hear nothing for months – or even years! However, when the appeal does advance, the timelines for action can suddenly become very short.

A failure to respond in time can result in an objection being denied, or the permanent loss of one’s further appeal rights.

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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!