- Non-resident businesses without a Canadian address are no longer able use the Business Registration Online (BRO) system to obtain a business number and register for GST. What is the reason for this restriction?
- Companies incorporated under the laws of Canada or a province of Canada but without any Canadian resident directors are not able to use the BRO system to register for GST (they must have a social insurance number [SIN])? What is the reason for this restriction for Canadian based companies?
- We continue to see issues with appropriate personnel not being able to gain access to the online accounts of limited partnerships. This often has to do with authorized persons not being listed in the partnership’s information in the CRA’s account. Is there anything practitioners can do to have the information set up in the account of the CRA automatically upon formation to minimize issues with granting authorization, similar to corporations where first directors are listed, or is this a systems limitation issue?
- When contacting the CRA to register for a GST account by phone, you are now directed to a senior agent if the entity is associated with other entities. The senior officer sometimes asks for detailed information of all associated entities, which could be numerous (e.g., over 50). Other than the relevance to the reporting period, what is the significance of this when setting up a GST account?
CRA Comments
- To use the BRO application, the CRA validates the user of the service and the person(s) associated with the business being registered. In order to validate these identities, BRO requires their SINs to compare to CRA information already on file. For non-resident entities, manual review is required, and possibly additional documentation and client contact, to ensure the registration is valid.
Furthermore, for the GST/HST program account registration, with few exceptions, a non-resident person who does not have a permanent establishment in Canada and who is required to be registered for the GST/HST tax, or who applies voluntarily to be registered, must provide and maintain security with the CRA in an amount and a form satisfactory to the Minister. Security is required to protect the assets of the Crown in the event there is failure to pay or input tax credits that were incorrectly applied for, refunded.
For these reasons, non-resident companies are required to register via the Non-Resident Registration Webform or via the RC1- Request for a Business Number and certain program accounts. - Businesses with non-resident directors (despite not being the user) do not have the same access to BRO due to security and authentication requirements. With non-resident directors, manual review is required, and possibly additional documentation and client contact, to ensure the registration is valid. In the future, the CRA is looking to add capabilities where registrations would be permitted through BRO when there is a Canadian entity being registered and the directors are non-resident. We do not have a timeline on this enhancement.
- During partnership registration via fax, mail, telephone and online (BRO), the owner (partner) information can only be updated with the information provided by the client, representative or third party. In some cases, we may not be provided with all the owner information. When receiving requests to update the partnership information, there are also instances where the BN is not provided and cannot be located by a CRA agent, or with missing/incomplete information.
In addition, many, if not most of the limited partners, are now registering and obtaining their BNs via CRA’s provincial and federal BN Partners. In these cases, CRA systems are updated with the owner information received from the BN Partners. This could also result in missing or incomplete information, depending on what the client provided to the BN Partner.
Whether the registration is completed using one of CRA’s services or using a BN partner, we encourage clients to ensure they provide all owner information upon registration, or send in their partnership agreement to CRA as soon as they’re registered. - A referral to a senior agent has always been required to register an RT program account for an associated entity. In case the caller as any questions about associated account, our senior agents have the training to answer these enquiries on associated businesses. Our Level 1 enquiry agent do not have the training as these questions can be complex.
Without insight into the questions our agents are asking, it is challenging to determine the best way to address this situation. Our procedure is vague. It just mentions to include any relevant details of known associated BNs. It is unclear what is meant by “relevant details.” However, we are currently reviewing our procedures. We are looking into what additional information is required for the registration, other than the combined business income of all the associated businesses. We will be more specific to what is actually required so our agents do not ask any irrelevant questions. For example, we are not going to ask for the business number of all 50 associated businesses. This should improve the service.
For the effective date of registration, we normally take the taxpayers word. For a new business that is associated, the effective date is the date of that first sale. The annual revenue of all associated businesses is what helps determine the filing frequency. This information is needed in order to code the account correctly for the filing frequency.
Additional comments on a question raised during the meeting regarding all the questions that are being asked during the registration
During the registration, there is a list of mandatory questions that must be answered. These questions are also found in Part A5 of the RC1 Request for a Business Number and Certain Program Accounts - Canada.ca.- Do you plan to sell/provide goods/services in Canada?
- Are your annual worldwide GST taxable sales more than $30,000?
- This is where the questions about associated businesses comes into play)
- If you are a public service body, will your annual worldwide GST/HST taxable sales be more than $50,000?
- Are all the goods/services you sell/provide exempt from the GST/HST?
- Do you operate a taxi, limousine or commercial ride sharing service?
- Are you an individual whose sole activity subject to the GST/HST is from commercial rental income?
- Are you a non-resident?
- Are you a non-resident who charges admission directly to audiences or events in Canada?
- Is this account for the purposes of Digital Measures Legislation? Unfortunately, there is no way around these questions.
Unfortunately, there is no way around these questions