What it is: Canada’s Goods and Services Tax (GST) is a value-added tax of 5% on most supplies made in Canada. In participating provinces, an extra provincial component applies (the HST); zero-rated supplies are taxed at 0%, and exempt supplies are outside the tax and typically don’t allow input tax credits (ITCs). The Act places the tax on the recipient, and registrants must charge, collect, and remit it. 1) Do I need to register? Small supplier rule: If you…

The RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, is the CRA’s built-in safety valve. If you fell behind on your tax obligations because of events outside your control, serious financial hardship, or CRA’s own delays or mistakes, this is the form you use to ask the CRA to cancel or reduce penalties and interest. This guide walks you through: Who actually qualifies (and who doesn’t) The 10-year deadline most people miss Ho…

Have you recently sold or renovated a home in Canada? You might be on the CRA’s radar for a “builder” audit — whether you think you’re a builder or not. The CRA has been aggressively targeting individuals who construct, substantially renovate, or flip residential properties and sell them, often without charging HST or properly reporting the income. In Ontario alone, real estate audits from 2015 to 2023 yielded over $300 million in GST/HST assessments, illustrating…

Statutory Framework for Directors’ Tax Liability Directors of Canadian corporations face personal liability if their company fails to remit certain taxes. Under Income Tax Act (Canada) (ITA) subsection 227.1(1) and Excise Tax Act (Canada) (ETA) subsection 323(1), directors are jointly and severally liable with the corporation for unremitted employee source withholdings (payroll deductions) and net GST/HST, including interest and penalties. Both statutes provide…

Introduction His Majesty the King v. Vefghi Holding Corporation and S.O.N.S. Environmental Ltd., 2025 FCA 143 (“Vefghi”), is a Federal Court of Appeal decision addressing the timing for determining whether two corporations are “connected” for the purposes of Part IV tax under paragraph 186(1)(a) of the Income Tax Act (Canada) (“Act”) when a trust intercedes in the payment of dividends. The case arose from a tax planning arrangement where family trusts receive…