Tax & Trade Blog

Canada’s federal and provincial taxes of “vaping products” is really a vaping duty imposed under the Excise Act, 2001(the “Vaping Duty” and “EA 2001”), and the CRA is in charge of administering that excise duty – Including related audit activities.

CRA appears to be ramping up its audit activity in this area, now issuing proposed and final assessments under the taxing provisions in EA 2001 sections 158.57, 158.58 and 158.61.

"Reverse and rebill" situations are very common in the Oil, Gas and Petrochem industry, especially in situations where goods are delivered in one reporting period but invoiced (or reversed and rebilled) in another reporting period because of formula-based pricing. There are a number of other situations where it is also necessary to "true-up" commercial invoice previously issued, and the GST/HST reporting and remittance requirements in these situations are counterintuitive.

Unwary businesses often face subsequent CRA assessments for taxes not collected, with the CRA taking the position that taxes were required to be collected on the issuance of both invoices unless proper credit note steps are taken.

As a firm specializing in International Trade and related regulatory issues, we have noticed a marked increase in recent inquiries regarding the new regulatory requirements for Nicotine Pouches.  This uptick coincides with Health Canada’s recent announcement effectively restricting the sale of Nicotine Replacement Therapies (“NRTs”), including Nicotine Pouches, to pharmacies – and the need to understand how comprehensive these apply to current business, and what options there are for moving forward.

With May 31^st deadline quickly approaching for Canada’s first mandatory Annual Reports on Forced Labour, many in the Oil, Gas & Petrochem sector may have missed these requirements completely!

Making matters worse, Public Safety Canada’s recently released updated guidance (the “New Guidance”) on Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “FCLA”) leaves a number of “scope” questions unanswered.