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New digital platform operator reporting rules

Updated: November 27, 2024

Beginning in calendar year 2024, certain digital platform operators will be required to report detailed information on each reportable seller using their platforms, with submissions due to the Canada Revenue Agency (CRA) by January 31 of the following year.

In addition to submitting this information to the CRA, each platform operator must also provide the same details to each reportable seller by this deadline.

Reporting platform operators

For the purposes of the new reporting rules, a platform includes software and applications that allow sellers to connect to other users for the sale of goods or the provision of certain services, including the collection and payment of consideration in respect of relevant activities. However, software is not considered to be a platform if it only allows the processing of payments related to relevant activities, listing or advertising relevant activities, or redirecting or transferring users to a platform.

For example, software that enables buyers to purchase goods from third-party sellers through the platform is expected to be a platform under these reporting rules. In contrast, software that allows the listing or advertising of goods but does not facilitate a sale transaction between a seller and a buyer would not be a platform for these purposes.

A platform operator is an entity that contracts with sellers to make all or part of a platform available.

A reporting platform operator is a platform operator that is resident in Canada. In addition:

  • A platform operator that is resident in a partner jurisdiction and facilitates the provision of relevant activities by sellers in Canada, or with respect to real property in Canada, may elect to report in Canada
  • A platform operator that is not resident in Canada or a partner jurisdiction and facilitates the provision of relevant activities by sellers in Canada, or with respect to real property in Canada, is required to report in Canada.

A partner jurisdiction is one that has implemented the Organisation for Economic Co-operation and Development's (OECD) Model Reporting Rules for Digital Platforms and has an agreement to exchange information with Canada. The United Kingdon and most European Union countries, among others, have indicated their intent to exchange information pursuant to the agreement.

Platform operators that can demonstrate that their business model is such that they do not allow sellers to derive a profit from the consideration or have reportable sellers are not required to report.

Reportable sellers

Reportable seller

A reportable seller is an active seller that the platform operator has determined to be resident in a reportable jurisdiction, to have provided relevant services for the rental of real property located in a reportable jurisdiction, or to have been paid consideration in connection with relevant services for the rental of real property located in a reportable jurisdiction.

Active seller

An active seller is a person that either provides or is paid consideration for relevant services or the sale of goods in the reportable period. A relevant service includes the provision for consideration of real property rental, the rental of a means of transport, or a personal service. A personal service is generally a service involving time or task-based work performed by an individual at the request of a user.

Certain sellers are excluded from the reporting requirements:

  • Persons (other than a natural person) for which the platform operator facilitated more than 2,000 relevant services for the rental of real property in respect of units at the same street address during the reportable period.
  • Government entities.
  • Publicly traded entities.
  • Persons for whom the platform operator facilitated less than 30 relevant activities for the sale of goods and for which the total consideration did not exceed $2,800 in the reportable period.

Reporting requirements

The reporting platform operator must report the following information to the Canada Revenue Agency (CRA) for each reportable seller in the reporting period:

  • Seller information. For non-individuals this includes the legal name of the seller and primary address of the entity. For individuals this includes the first and last name, primary address, and date of birth.
  • Any other tax identification number, including the jurisdiction of issuance, available to the platform operator.
  • Any financial account identifiers available to the platform operator and the jurisdiction of the seller's residence.
  • If different from the seller, the name of the holder of the financial account to which consideration is paid, if available to the platform operator.
  • Each jurisdiction in which the seller is resident.
  • Any fees, commissions, or taxes withheld or charged by the platform operator by quarter.
  • If the seller provides services for the rental of real property, the address (and if available, the land registration number) of each property listing, the total consideration paid by quarter, and the number of relevant services provided for each property listing. If available, the number of days each property listing was rented during the reportable period and the type of each property listing are also required.
  • If the seller provides other relevant services, sells goods or rents out means of transportation, the total consideration paid by quarter and the number of relevant activities in respect of which it was paid.

Reporting platform operators are required to follow legislated due diligence procedures which include the use of all available records, as well as any publicly available electronic interface to verify the validity of a seller's tax identification number.

The first reportable period is the 2024 calendar year, which must be reported to the CRA by January 31, 2025. In addition, a reporting platform operator is required to report to each reportable seller the data that has been reported to the CRA by the same date.

Digital platform operators should also be aware that the provinces of Quebec and British Columbia have introduced different reporting requirements for digital platform operators.

How BDO can help

Affected digital platform operators should be aware of these reporting requirements to ensure they are able to provide all the required information by the reporting deadline. Reportable sellers should also be aware that the CRA will receive information from platforms that may enable it to verify that revenues earned through digital platforms are reported by the sellers.

BDO can assist in determining the requirements and impact of the new digital platform operator reporting rules.

Contact us to learn how we can help

Brian Morcombe, Partner, Indirect Tax Practice Leader
Bruce Goudy, Director, Indirect Tax
Glen Cassidy, Director, Indirect Tax

The information in this publication is current as of November 4, 2024.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.