We are a super-boutique Canadian tax and trade law firm, with litigation and planning expertise in tax, trade, GST/HST and customs matters. Our client base is comprised of national and international leaders in almost every industry sector who have come to rely on us for the specific and cost-effective litigation services and advice that we can provide.
When matters cannot be resolved with the governmental authorities to our clients’ satisfaction, we represent them in tax and trade litigation before all relevant courts, and at all levels of court, including before the Tax Court of Canada, the Canadian International Trade Tribunal, the Federal Court and Federal Court of Appeal, and the Supreme Court of Canada.
Our tax practice includes a focus on Canada’s GST/HST system, which is a multi-level, value-added taxing system, imposed under Canada's Excise Tax Act (the ETA), and administered by the Canada Revenue Agency (the CRA). The GST applies at a 5% rate federally, and the HST applies an additional provincial component by province, resulting in GST/HST rates ranging from 5% to 15% nationally.
Our Customs and Trade practice focuses on all Canadian issues affecting the movement of goods to and from Canada, including tariff classification, origin, valuation, marking, seizures and ascertained forfeitures, and export controls. Our trade practice also includes assisting clients on NAFTA, and Anti-Dumping & Countervail (SIMA) matters, and much much more.
Our firm has a special focus on direct selling companies. Our firm is truly a “one stop shop” for direct sellers looking to expand into the Canadian marketplace. From tax structuring assistance to help with incorporation, to compliance with Canada’s anti-pyramid laws and provincial consumer protection licensing, we have assisted hundreds of direct selling companies in the Canadian marketplace with their legal compliance, including four of the last six DSA Rising Star Award winners!
When it comes to a Direct Selling Company’s legal relationship with its Distributors, Canadian direct sellers are treated differently from those in the US, where IRS deeming rules operate to clarify that Distributors are independent contractors and not employees!
In Canada, there is no such special status, and the “common law” determines employee vs. independent contractor (“IC”) status, making this a perennial compliance issue.
The direct selling industry poses a number of unique challenges for Canadian sales tax regimes. The patchwork of separate federal GST/HST and provincial PST/QST regimes only further complicate the matter, making it difficult for new entrants to the Canadian market to determine their collection, remittance, and reporting obligations. This revised article from our 2023 primer provides a brief overview these optional sales tax rules.
Direct Sellers and the distributor and representative businesses that work closely with them should be no stranger to oversight and scrutiny from all levels of government, no matter where they operate.
The Canada Revenue Agency (“CRA”) recently added one more headache for in-house Law Departments and other Compliance Professionals with Direct Selling Companies, issuing a warning exclaiming: “Watch out for tax schemes involving multilevel marketing businesses!” (the “Warning”).
Quebec’s controversial Bill 96, officially titled “An Act respecting French, the official and common language of Quebec” (“Act”), was passed in 2022. Bill 96 amends the Charter of the French Language (“Charter”) to try and ensure that French remains the predominant language in commercial activities within Quebec. Practically speaking, Bill 96 has made things extremely complicated for any English-based Canadian or US business trying to operate in Quebec, including both Canadian and US Direct Sellers.
The new year brings an important new reporting obligation likely affecting many Canadian and some US-based Direct Selling businesses – and sadly, the in-house Law Department and other Compliance 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.
