Bobby Solhi has been quoted in an article titled “CRA Info About GST/HST on Trailing Commissions to Drop in February, March,” published by Investment Executive.
Writes Michelle Schriver: “For dealers, preparing for compliance will include reviewing agreements with fund managers.”
The Canada Revenue Agency has confirmed it will release guidance in February and March explaining its updated position that GST/HST will apply to mutual fund trailing commissions starting July 1. This clarification follows a tax interpretation the CRA provided to the Securities and Investment Management Association in December.
The CRA emphasized that the law itself has not changed — only its administrative position regarding how trailing commissions should be treated for tax purposes.
Says Bobby: “Determining whether a supply of a good or service is exempt or not requires, in part, viewing the supply through ‘the lens of the recipient.’”
Bobby goes on to discuss how fund managers perceive the service, how agreements will influence the tax outcome, how service descriptions impact taxability, and the CRA’s broader enforcement trends.
Careful review and potential restructuring may be required to support the intended tax treatment and manage compliance risk. Learn more about our Tax & Trusts team here.