Businesses must stay on top of their tax obligations under Canada’s indirect tax regulations to avoid missing deadlines.
Apart from the usual GST/HST and provincial sales tax (PST) returns, companies may have other compliance requirements and tax changes to address throughout the year. The evolving tax landscape in Canada has introduced various registrations, tax amendments, and additional filing obligations, making it crucial for affected businesses to be fully aware of and adhere to their indirect tax filing responsibilities to avoid potential penalties or interest charges.
Businesses with potential additional indirect tax responsibilities include financial institutions, digital businesses, vaping product sellers, importers, and real estate owners.
Here’s a summary of some key upcoming deadlines for indirect tax filings and compliance requirements, excluding the regular GST/HST and PST returns, as well as some imminent tax adjustments:
Financial Institutions and Deemed Financial Institutions
- Annual GST/HST and QST returns must be filed by June 30, 2024, for many financial institutions and those deemed as financial institutions.
- Financial institutions meeting certain income thresholds are required to file annual GST/HST information returns by June 30, 2024.
- Qualifying financial institutions have until July 5, 2024, to elect or modify their input tax credit (ITC) allocation methods for the coming year.
- By October 15, 2024, distributed investment plans (DIPs) must request specific data from investors to help manage their indirect tax costs.
Digital Businesses and Entities in the Digital Economy
- Distribution platform operators need to file the annual QST form by June 30, 2024.
- Online marketplace facilitators are required to file an annual information report for B.C. PST by August 31, 2024.
- Platform operators have to submit new federal annual information reports to the CRA by January 31, 2025, detailing seller data for the 2024 calendar year.
- Digital businesses may have to register for the proposed Digital Services Tax (DST) by January 31, 2025, with the first filing and payment under the new DST regulations due by June 30, 2025.
Attention Vape Product Businesses: Tax Increases Coming July 1, 2024
- Vape product sellers and importers need to be aware of upcoming tax rate changes scheduled to take effect on July 1, 2024. The excise duty rates on vaping products are set to rise, impacting both non-participating and participating jurisdictions in the federal coordinated vaping duty system. It’s vital for businesses to adjust their systems accordingly to comply with the new rates prescribed by the government.
Expansion of Federal Coordinated Vaping Duty System
- Four additional jurisdictions, including Ontario, Quebec, the Northwest Territories, and Nunavut, are set to join the federal coordinated vaping product taxation regime on July 1, 2024. This means that manufacturers, importers, and retailers operating in these regions must familiarize themselves with the updated rules and implement necessary changes to their processes, including adapting to new stamps and transitional regulations.
Further Expansion in January 2025
Looking ahead to January 1, 2025, more participating jurisdictions are anticipated to join the federal coordinated vaping duty system. Manitoba, New Brunswick, Alberta, Yukon, and Prince Edward Island are expected to become part of the regime, necessitating businesses in these areas to prepare for the upcoming changes in taxation regulations.
Importers: CARM Release 2 Launching October 21, 2024
- Importers, brokers, and other trade partners should gear up for the launch of CARM Release 2 on October 21, 2024. This significant update to import processes, rules, and obligations by the Canada Border Services Agency (CBSA) will bring about substantial changes, making it essential for stakeholders in the import chain to get ready for the transition to the new system.
Compliance with Forced Labor Reporting Requirements
- Businesses are reminded to gather data and prepare to file reports on efforts to combat child labor and forced labor by May 31, 2025. With strict reporting deadlines in place, affected organizations must carefully review their supply chains and ensure timely completion and submission of required reports and questionnaires to comply with the regulations.
Stay on Top of Tax Deadlines for Real Estate Ownership
- Property owners, both Canadian and non-resident, must file their Underused Housing Tax (UHT) return and make the necessary payments for the 2024 calendar year by April 30, 2025. Failure to meet the deadline or qualify for exemptions could result in liability for the 1% UHT imposed on reportable residential properties owned in Canada.
Cross-Border Insurance Coverage: 10% Federal Tax Due by April 30, 2025
- Businesses with cross-border insurance coverage are reminded to remit a 10% federal tax on premiums by April 30, 2025, for policies acquired from insurers outside Canada in 2024 or through global insurance policies obtained from affiliated companies located abroad.
GST/HST and QST Collection on Masks and Face Shields
- Manufacturers and retailers must start collecting GST/HST and QST on qualifying masks and face shields from May 1, 2024. The temporary zero-rating measures previously in place for these products have ended, necessitating businesses to apply the appropriate taxes on these essential healthcare items moving forward.
We can help
If you have any further questions or need assistance regarding the aforementioned changes or any accounting and tax-related matters, feel free to reach out to your Clear Wealth Accounting Advisors Inc advisor for personalized guidance and support. We can provide you with detailed information on how these changes may impact your business and assist you in navigating the necessary compliance requirements.
