Tax & Trade Blog

After 35 years of practice in Tax and Trade, one thing I am sure of is that there are no “magic” answers for dealing with administrative delay by the Canada Revenue Agency (“CRA”) or the Canada Border Services Agency (“CBSA”).  

A recent decision of the Canadian International Trade Tribunal (“CITT”) underscores this problem, and leaves taxpayers and importers in some potentially hard situations when faced by governmental inaction.

Many travelers, including seasoned and sophisticated travelers, misunderstand the fundamental obligation to declare all goods being imported into Canada.

The most common misconception is often that “I’m within my exemption limits” and therefore “I don’t have to tell anybody what I’m bringing in”.

A recent case from the Federal Court of Appeal (“FCA”) demonstrates that this is far from the truth!

Staffing agencies (as well as Employment Agencies, Temporary Labour, Placement Agencies and other similar entities – “Agencies”) play a growing role in connecting businesses with Canadian workers, but these models can come with unexpected tax “strings attached”.

For example, did you know that in some cases, Agencies hiring workers classified as independent contractors can still be required to make Canada Pension Plan (“CPP”) and Employment Insurance (“EI”) contributions (as if the workers were their employees)?  This tax quirk can be difficult to understand, especially when the Canada Revenue Agency (“CRA”) views one’s workers to be non-employees!

As we have blogged about here and here, the CRA is after a whole swath of residential homeowners who are finding themselves being taxed on the sale of their new or used residential properties, after substantially renovating them.

A recent decision of the Tax Court of Canada (“TCC”) in Bryan v. The King, 2024 TCC 108 highlights the problems that homeowners face when going into these ventures with possible “dual motivations”. 

As we have previously reported on here and here, Canada has continued to expand its economic sanctions on Russian nationals, following Russia’s invasion of Ukraine, targeting individuals and entities believed to be linked to the Russian regime.

Canada’s sanctions have been primarily imposed under the Special Economic Measures (Russia) Regulations (the “Russia Regulations”), the Special Economic Measure Act (“SEMA”), and through other similar regulations targeting persons in Belarus, Ukraine and most recently Moldova.  In total these sanctions include asset freezes and financial prohibitions, and even apply to certain listed persons set out in the Schedules within the regulations.  These lists change frequently, are hard to get off of, and have impacted more than 2,900 individuals and entities.

Over the past several years, the Canada Revenue Agency (the “CRA”) has been in the midst of a digital service transformation.  Like the CBSA’s “CARM” project, which we previously discussed here, this initiative appears to be a response to the Canadian government’s “digital first” policy, which aims to build digital delivery into government operations and services.

While the CRA now provides Notices of Assessment electronically through online portals including “My Account” and “My Business Account”, access to such documents remains difficult for many, especially non-Canadian residents who may be unfamiliar with the Canadian tax system.

When a person (whether a corporation or natural individual) crosses a border to perform services, Canada and the US have detailed taxing rules, aimed at ensuring that the person entering the other country properly reports those activities.  These rules often come with mandatory “withholding taxes“ on the payer of the services resident in the country where the services are being performed.

Canada has recently fine-tuned its position on Regulation 105 withholding, which may come as a surprise to many involved in the cross-border provision of services.