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!
If there was such a thing as a “10-Alarm” fire, CRA’s public release of GST Interpretation RITS 202403 would seem to fit that bill.
In this April 2023 Interpretation – issued only a few weeks ago – CRA takes the view that Employers with pension funds invested in an insurer’s segregated funds, are NOT eligible to claim ITCs for the GST/HST payable on the investment management fees (“IM Fees”) paid directly out of those funds.
On one level of analysis, CRA has done an about-face and reversed a prior 2012 Ruling in this area (which seemed to have addressed the same situation). While CRA may disagree with that statement, this does appear to be a potentially significant “reinterpretation”.
Justice John Owen of the Tax Court of Canada has rendered one of the most important and potentially far-reaching decisions in 33 years of GST. While Fiera Foods Company v. The King, 2023 TCC 140is about some other things, the Tax Court’s keen observations about GST “Information Requirements” is its most important part: they require sufficient evidence to be obtained prior to claiming input tax credits (“ITCs”), but do not specify or require the “form” of that evidence.
Another question that we are often asked is what the CRA means by the term “carousel scheme”. It is a great question, because the CRA does not define its position on that phrase anywhere, other than in private assessment documents that it sometimes provides to GST registered persons on the wrong end of the CRA’s Notices of Assessment powers.
We have recently seen many clients make improper “corrections” or “amendments” to previously-filed GST Returns, which ultimately causes even more problems, and leads to unrecoverable GST!
In fact, there is no legislative basis for filing a corrected or amended GST Return. We regularly see clients who chose to deal with errors by making “after-the-fact” changes to “GST collectible” or “GST credits claimed” in later periods – perhaps believing that if net tax was under-reported in January, it can be fixed by adding extra “net tax” to July!
While errors on GST Returns are a fact of life, the way that these mistakes are corrected can cause bigger problems (think: lost money)!
