The Canada Revenue Agency (CRA) is looking to better understand businesses’ and organizations’ awareness of, and readiness to comply with, the reporting fees for service (RFS) requirement.
What is the reporting fees for service requirement?
RFS is the legislated requirement for businesses and organizations (including sole proprietors and corporations) to report fees paid to other businesses for services provided. If they exceed $500 in a calendar year, these payments must be reported to the CRA on the prescribed form, usually a T4A slip.
Generally, payment for a service is an amount paid to a business for:
- the actions of serving, helping, or benefitting another (for example: legal advice, maintenance and house cleaning, consulting services, bookkeeping services, construction services, hiring a realtor, technical support services, transportation services)
- the physical or intellectual work itself, not the article of trade or commerce or tangible finished product produced by that work
You can refer to the CRA’s list of common examples of businesses that provide services to other businesses to determine if the RFS requirement applies to you.
In 2011, a moratorium on assessing penalties for failing to the complete box 048 of the T4A slip was introduced. This was meant to allow businesses and organizations time to gain familiarity with the changes and adopt practices to comply with the RFS requirement. Though it was intended as a temporary measure, the moratorium remains in place.
Share your thoughts
Recognizing the value of stakeholder feedback, we have launched an online questionnaire for Canadian businesses and organizations of all sizes on the RFS requirement. The questionnaire will close on July 22, 2024.
The feedback we receive through this online questionnaire will help us identify ways to clarify reporting requirements, streamline processes, and proactively support Canadian businesses and organizations in understanding and meeting their tax obligations. We strongly encourage you to participate and share this with your colleagues and partners.
RFS is one example of the CRA working to strengthen compliance measures, reduce the corporate tax gap, and deliver on its mandate to combat tax avoidance and tax evasion through a People First approach.
Need more information?
To learn more about RFS, visit Reporting fees for service.
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