- Budget 2025 proposes a reverse charge mechanism (RCM) for GST/HST on specified telecommunication services supplied to registered resellers.
- The RCM shifts the responsibility to self-assess and report GST/HST from the supplier to the registered reseller, who can also claim input tax credits (ITCs) if eligible.
- The RCM targets fraudulent GST/HST carousel or missing trader schemes, where fraudsters disappear without remitting collected GST/HST.
- The Canada Revenue Agency (CRA) has sometimes denied ITCs to innocent parties, wrongly accusing them of involvement or knowledge of fraud.
- A recent Tax Court decision criticized the CRA for not warning claimants about fraudulent suppliers and failing to cancel their GST/HST registrations.
Source: mcmillan.ca
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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