Payments for services: CRA policy unchanged for now

Uncertainty over the Canada Revenue Agency (CRA)’s policy on tax reporting for payments for business-to-business services is raising concerns for our members. Find out what policy is in place — at least for now.

Under the tax rules, when someone pays for a service, the payor is required to report the payments by issuing a Form T4A, Statement of Pension, Retirement, Annuity, and Other Income (“T4A”) to the service provider and by filing a T4A summary with the CRA. These rules apply if the total of all payments to the service provider in the calendar year was more than $500.

As worded, this legislation has potentially broad application. Exactly how the CRA would enforce these rules has long been unclear.

The CRA seems to recognize this uncertainty and has provided penalty relief. While the CRA indicates that fees for services should be reported in box 048 of the T4A, the CRA’s guide RC4157, Deducting Income Tax on Pension and Other Income, says: “The CRA is not assessing penalties for failures relating to the completion of box 048.” Further, when it comes to service fees paid to businesses, the CRA has not broadly enforced these rules.

Concerns, however, have resurfaced since the CRA’s February 20, 2019 webinar “Business fees for services and T4A reporting”. Slides from the webinar provided to us by members seem to suggest that taxpayers must record fees paid for services on a T4A without exception, and the administrative position on penalty relief set out in Guide 4157 was not mentioned. As a result, members have been concerned that the CRA may have changed its administrative practice. 

We recently raised this issue with the CRA and based on the discussion, we believe that:

  • the CRA has not changed its policies in this area
  • they will continue to not assess penalties for failures to complete box 048 of the T4A

We have encouraged the CRA to provide clearer guidance on this current administrative policy on service fees and T4A reporting, as it has been an area of confusion for some time.

Finally, as part of its Underground Economy work, the CRA has said publicly that it wants to conduct an analysis of compliance concerns related to business-to-business reporting on T4A slips. The CRA has told us that this analysis is not yet complete and that they plan to consult with CPA Canada and other key stakeholders before implementing any changes.

We’ll update you on any new developments as these consultations move forward.


What issues do you think the CRA should consider as it consults on these tax reporting rules? You can keep the conversation going by posting a comment below.


CPA Canada’s Tax Blog is designed to create an exchange of ideas on tax policy and practice issues, and their impact on those who practice tax. Your comments can provide helpful input into the public interest advocacy positions developed by CPA Canada.

About the Author

Bruce Ball, FCPA, FCA, CFP

Vice-president, Taxation, CPA Canada