The Canada Revenue Agency (CRA) published guidance regarding the new reporting requirements for digital platform operators on 10 September 2024. Under the rules, reporting platform operators are now required to collect and report information on sellers considered to be reportable sellers to the Canada Revenue Agency.
These rules, which are based on the OECD’s Model Reporting Rules for Digital Platforms, will take effect in 2024.
The first information return is due by 31 January 2025 for the 2024 calendar year. The deadline is the same for each preceding calendar year.
What’s a reporting platform operator?
A platform operator that is resident in Canada is considered a reporting platform operator. A platform operator that is non-resident in Canada or that is managed or incorporated in another jurisdiction will also generally be considered a reporting platform operator if it allows sellers to sell goods or offer services, including the rental of real or immovable property, in Canada.
You will not be considered a reporting platform operator and will not have to report information on your sellers if you can demonstrate that your entire business model does not:
- Allow sellers to derive a profit, or
- Have reportable sellers
What’s a reportable seller?
Generally, a seller is considered to be a reportable seller if they:
- Are registered on a digital platform
- Reside in Canada or another country that has implemented the rules, and
- Sell goods or offer services, such as the rental of real or immovable property, to customers that reside in Canada or other countries that have implemented the rules.
What information must be reported to the CRA?
Reporting platform operators must report identification and activity information on each reportable seller.
The following are some examples:
- Identification information
- Name of seller
- Seller’s primary address
- Date of birth, where applicable
- Seller’s tax identification number including the jurisdiction of issuance
- Seller’s financial account identifiers
- Activity information
- Consideration paid or credited
- Fees, commissions or taxes withheld or charged by the platform operator
- Location of rented real or immovable property, if applicable
What are the due diligence procedures?
As a reporting platform operator, you must ensure that by 31 December 2024 of the reportable period the information you collect and report is reliable. However, there is a transitional period for the first year you are considered a reporting platform operator.
More specifically, you must verify the reliability of:
- Information collected in respect of entities that are excluded sellers
- Seller information
- The address of each property listing, if applicable
What are the filing instructions?
All reporting platform operators must obtain a business number and an information returns RZ programme account to file.
The return must be filed using an XML Schema. Your filing process will be different based on whether you’re a resident in Canada or not:
- If you are resident in Canada, you will be able to file your information using My Business Account;
- If you are resident in Canada and have a representative, your representative can use Represent a Client to file on your behalf;
- If you are not resident in Canada, you will need to obtain a Web Access Code to electronically file your information return through the CRA web portal.
