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Tax news and developments November 2022

In brief

The Department of Finance released draft legislation on 3 November 2022 introducing new reporting obligations applicable to certain digital platform operators. These rules are intended to implement the OECD’s Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy (“OECD Model Rules”) originally released in July 2020. These new Canadian measures are proposed to come into force on 1 January 2024.

Relevant activities

The measures apply to a “relevant activity” which is defined as the sale of goods for consideration or a “relevant service”, which includes the rental of immovable property, a personal service, the rental of a means of transport and other prescribed services.

Information collection

The measures require a “reporting platform operator” (RPO) to collect, verify and report certain information to the Canadian Minister of National Revenue (“Minister”) and to certain sellers. An RPO is a platform operator that is either (i) resident in Canada, (ii) resident, incorporated or managed in certain partner jurisdictions and facilitates the provision of relevant activities by sellers resident in Canada or in relation to the rental of immovable property in Canada and elects to be an RPO, or (iii) is not resident in Canada or a partner jurisdiction and facilitates the provision of relevant activities by sellers in Canada or in relation to the rental of immovable property in Canada.

The information to be collected by an RPO from a seller that is a natural person is: (i) first and last name; (ii) primary address; (iii) a taxpayer identification number (TIN), including jurisdiction of issuance; and (iv) date of birth. The information to be collected from an entity is: (i) legal name; (ii) primary address; (iii) a TIN, including jurisdiction of issuance; and (iv) business registration number.

If the relevant services provided include renting an immovable property, the address of each relevant property listing must also be collected.

An exception from collecting certain information exists, notably where government verification services can be relied upon to provide the identity and tax residence of the seller.

Due diligence

RPOs must also verify the reliability of the information collected by 31 December of the reportable period. Transitional relief is available for RPOs in respect of sellers already registered as of 1 January 2024, or as of the date an entity becomes an RPO, which must be completed by 31 December of the second reportable period.

RPOs must use all available records to validate information collected as well as any publicly available electronic interface to validate the TIN. However, exceptions exist for sellers that were registered prior to the entry into force of these rules or where a platform operator fulfilled substantially similar requirements in certain partner jurisdictions. Third-parties may complete the requirements, however, the ultimate responsibility remains with the RPO. RPOs may elect to limit due diligence procedures to active sellers and may rely on previous due diligence in specific circumstances.


RPOs must provide the required information to the Minister as well as provide reportable sellers with the information that relates to them for a reportable period, no later than 31 January of the year following the calendar year in which a seller is identified as a reportable seller. Where adequate assurances have been obtained from the RPO or another platform operator that the reporting obligations will or have been fulfilled, these requirements may not apply.

Recordkeeping and penalties

RPOs must keep records in compliance with these measures for 6 years following the end of the last calendar year in respect of which the record is relevant.

A CAD 500 penalty applies to a reportable seller who fails to provide their TIN on request to any RPO. However, the penalty will not apply where an application for a TIN is made within 90 days of the request and is provided within 15 days of receipt, or where the reportable seller is not eligible to obtain a TIN from the relevant jurisdiction.


Alex is a partner in Baker McKenzie’s Tax Practice Group in Toronto with over 20 years of experience. He is both a lawyer and a Chartered Professional Accountant.


Jesse Kaminski is an Articling Student in Baker McKenzie Toronto office.


Andrew Morreale is a partner in Baker McKenzie's Tax Practice Group in Toronto. Prior to joining the Firm, Andrew clerked for the judges of the Tax Court of Canada, was a corporate tax instructor at the University of Windsor, Faculty of Law and practiced in the international tax services group at a major accounting firm.

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