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Guidance on the Reporting Rules for Digital Platform Operators

Part XX of the Income Tax Act

Chapter 1 – Introduction

The purpose of this guidance

1.1 The purpose of this guidance is to help Canada Revenue Agency (CRA) officials and platform operators fulfill their due diligence and reporting requirements related to the Reporting Rules for Digital Platform Operators. These reporting rules were implemented by the addition of Part XX of the Income Tax Act, referred to throughout this document as Part XX.

1.2 The Government of Canada’s implementation of Part XX will also be of interest to individuals or entities using third-party platforms to generate consideration by selling goods or providing relevant services as defined in Chapter 4. The CRA may ask individuals and entities that have an account with a reporting platform operator to provide supporting documents. Canadian reporting platform operators need this information to satisfy their reporting requirements under Part XX.

Scope of this guidance

1.3 This guidance describes the due diligence and reporting requirements under Part XX. Platform operators can also refer to the Model Reporting Rules for Digital Platforms (MRDP) developed by the Organization for Economic Co-operation and Development (OECD). The OECD commentaries and the FAQ are important aids for interpreting Part XX.

1.4 By design, this guidance is consistent with the OECD commentaries on the MRDP and the FAQ and highlights how they can be appropriately understood in the context of Canadian law. However, in the event of any variation between the OECD commentaries on the MRDP, the FAQ, and this Part XX guidance, this Part XX guidance will prevail as the CRA’s view.

1.5 This guidance applies exclusively to Part XX reporting. Nothing contained in this guidance modifies or is intended to modify other guidance or a CRA view on any other matter.

1.6 This guidance uses plain language to explain Part XX. It is given as general information only. It is not legal advice and is not intended to replace the Income Tax Act.

International context

1.7 The MRDP prompted Canada to sign the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived through Digital Platforms, to benefit from a coordinated arrangement to exchange information efficiently and securely with other tax jurisdictions.

1.8 This guidance was developed with the international context in mind and will be updated when necessary to align with the international consensus on the MRDP.

Chapter 2 – Determining reporting platform operators

Introduction

2.1 The platform operator reporting requirements in Part XX applies only to an entity. For the purposes of the rules in Part XX, an entity is a person (other than a natural person) or a legal arrangement, such as a corporation, a trust, a partnership or a foundation. The exclusion of a natural person means that an individual operating a platform is not subject to the Part XX reporting requirements.

2.2 To determine whether an entity has potential reporting requirements in Canada under Part XX is a three-step process. First, you must determine whether the software or application being used is considered a platform for the purposes of Part XX. Second, if it is a platform, you must then determine whether the platform operator is specifically excluded from the reporting requirements. Third, if they are not excluded, you must determine whether the entity has potential reporting requirements in Canada.

Step 1 – Is the software or application a platform?

2.3 Under Part XX, a platform means any software, including a website or a part thereof and applications, including mobile applications, accessible by users and allowing sellers to be connected to other users for the provision of relevant services or the sale of goods, (see Chapter 4), directly or indirectly, to such users (including the collection and payment of consideration in respect of relevant activities).

2.4 For the purposes of Part XX, the sale of goods does not include the sale of any intangible property, or for civil law, any incorporeal property.

2.5 In the provision of relevant services or the sale of goods, the software is not a platform if it exclusively:

2.6 This is to clarify that pure payment processors, classified ads boards and online aggregators do not meet the definition of “Platform”, given that they do not immediately intermediate the linking-up between Sellers and other users for the provision of Relevant Services and the collection of Consideration for such Relevant Services.

2.7 The definition of platform does not require the software or application to allow users to communicate directly with each other, including by exchanging unstructured content, although many platforms have this functionality.

Connects sellers to other users

2.8 To be a platform, the software or application must provide a space for sellers to connect to users.

2.9 This criteria is not met if:

2.10 Example: if a website exclusively allows sellers to post advertising, such as retail store flyers, it is not facilitating the connection of users and sellers. Therefore, the website is not a platform under Part XX.

Processes payments

2.11 Although not a requirement, a platform may also include the collection and payment of consideration with the intent to pay out the consideration to the seller. This includes cases where a third-party processes the payments. In all cases, the amount of consideration in a transaction must be known or reasonably knowable by the platform operator for the Part XX rules to apply.

2.12 Example: the platform operator would not be required to report under the Part XX rules if all the following apply:

2.13 The platform operator would not be required to report in this case because they would not know the amount of consideration paid or credited to any of the sellers using the platform.

Relevant activity

2.14 To be a platform, the software or application must have sellers that are registered on the platform to carry out relevant activities (see Chapter 4), which includes providing relevant services and selling goods for consideration. These relevant activities can be performed directly by third-party sellers, or the platform operator can first purchase the service or good from these sellers and then offer it in its own name to users. For example, a food delivery platform that bought in to the services of third-party sellers to deliver food to its users in its own name would be a platform if it met all other criteria. Relevant services, if provided for consideration, include renting real or immovable property or a means of transport as well as providing personal services or prescribed services. These services are described in more detail in Chapter 4, however there are not any prescribed services at the moment. A software that facilitates only activities which are not relevant activities would not be a platform for the purposes of Part XX.

Platform operator

2.15 After an entity has determined the software or application it operates is considered a platform, it must determine if it is considered a platform operator for the purposes of Part XX. A platform operator is an entity that contracts with sellers to make available all or part of a platform to such sellers.

Step 2 – Is the platform operator excluded from Part XX reporting requirements?

2.16 A platform operator may be excluded from the Part XX reporting requirements for several reasons. An excluded platform operator is a platform operator that demonstrates that the platform’s entire business model does not:

2.17 Platform operators must assess themselves annually to make sure they meet the conditions above for that year (including not having any reportable sellers) to determine they are excluded.

2.18 Platform operators must ensure that they maintain appropriate documentation so they can demonstrate to the Minister that they are an excluded platform. 

Deriving profit from consideration

2.19 Consideration means compensation in any form that is paid or credited to a seller in connection with relevant activities, the amount of which is known or reasonably knowable by the platform operator. For more information on consideration measurability, see Chapter 7.

2.20 This compensation could come from someone other than the user that acquired the services or goods, such as the platform. For example: platform ABC is a food delivery platform where sellers can register to deliver meals. When a delivery purchase is made, the buyer pays the platform operator, and the platform operator then takes a portion of consideration and pays the delivery person. Although the seller is not paid directly by the buyer, but rather by the platform operator, platform ABC would not be excluded from Part XX.

2.21 Platform operators are excluded from Part XX reporting requirements if sellers cannot derive a profit from the consideration. For example, platforms that facilitate crowdfunding to develop products and that have arrangements to make sure sellers cannot derive a profit from crowdfunding.

Reportable sellers

2.22 The platform must have reportable sellers for the operator to be a reporting platform operator. If the platform does not have any reportable sellers, such as large-scale hotels or governmental entities, it is an excluded platform operator. There is more information on reportable sellers in Chapter 3.

Step 3 – Is the platform operator a reporting platform operator?

2.23 After an entity has determined that they are a platform operator and that they are not excluded, they must then determine if they are a reporting platform operator.

2.24 A platform operator is a reporting platform operator if it is not an excluded platform operator, and if:

2.25 A reporting platform operator that has reportable sellers is subject to the Part XX reporting requirements. Part XX reporting requirements are more fully described in Chapter 6.

Resident in Canada

2.26 A platform operator that resides in Canada for tax purposes is a resident in Canada for the purposes of Part XX. For more information on residency in Canada, refer to the following web pages:

Resident, incorporated, or managed in a partner jurisdiction

2.27 For the list of partner jurisdictions for the purposes of Part XX, refer to List of partner jurisdictions. These are jurisdictions that have adopted platform reporting rules similar to those in Canada and have been identified as partner jurisdictions by the minister of national revenue. Canada and partner jurisdictions may exchange information collected under their respective platform reporting rules about their reportable sellers resident in their applicable tax jurisdiction.

2.28 A platform operator resident, incorporated or managed in a partner jurisdiction, can elect to report to Canada if they facilitate the provision of relevant activities or the rental of immovable property located in Canada by sellers who are resident in Canada. They will report to the CRA information for reportable sellers who are resident in Canada or who facilitate the rental of immovable property located in Canada. The reporting platform operator may still have additional reporting requirements in the partner jurisdiction.

Resident outside Canada or a partner jurisdiction

2.29 All non-excluded platform operators that are resident outside Canada or a partner jurisdiction and that facilitate the provision of relevant activities or the rental of immovable property located in Canada by sellers who are residents in Canada are subject to the Part XX reporting requirements. The information they report to the CRA will be only for reportable sellers who are resident in Canada or who facilitate the rental of immovable property located in Canada.

2.30 Example: platform XYZ allows property owners to facilitate the rental of their property through their website. Platform XYZ is resident, incorporated and managed outside of Canada or a partner jurisdiction. Platform XYZ has reportable sellers who are resident in Canada. Platform XYZ qualifies as a reporting platform operator and has a reporting requirement under Part XX in respect of these reportable sellers.

Chapter 3 – Determining reportable sellers

Introduction

3.1 This chapter describes key terms required to understand how to identify reportable sellers. Platform operators subject to the Part XX reporting requirements are required only to report information about specific categories of sellers called reportable sellers. For the purposes of Part XX, a seller is a platform user that is registered on the platform at any time during a reportable period to provide a relevant activity. A platform user that is registered includes users who have created a profile or account on the platform and entered into a contractual relationship with the platform operator. Relevant activity is described in Chapter 4. A reportable period is a calendar year during which a platform operator is a reporting platform operator.

Note: An entity related to a platform operator can be a seller on that operator’s platform made available by the platform operator.

3.2 Example: selling intangible property, such as a software user license, is not a relevant activity (as intangible and incorporeal property are not included in the definition of a good for purposes of Part XX). If selling intangible property is a user’s only activity on the platform, that user would not be a reportable seller. Therefore, the platform operator is not required to report any information for that user under the Part XX rules.

Active seller

3.3 An active seller for a reportable period for Part XX purposes is a seller on a platform that does one of the following during a reportable period:

3.4 An active seller can be an individual or an entity. An active seller may also be considered a reportable seller.

Reportable seller

3.5 A reportable seller is any active seller, other than an excluded seller, that is determined by a platform operator based on due diligence procedures detailed in Part XX to:

Reportable jurisdiction

3.6 What is a reportable jurisdiction depends on the platform operator’s jurisdiction of residence. If the reportable platform operator is resident in Canada, then a reportable jurisdiction would be Canada and any partner jurisdiction is a reportable jurisdiction for that platform operator. The reportable platform operator would have to consider the relevant activity provided by reportable sellers residing in Canada and any partner jurisdiction when determining what information must be reported under Part XX. For any other reportable platform operator, Canada is the only reportable jurisdiction. For example, a reportable platform operator residing outside Canada would have to consider the relevant activities provided by reportable sellers resident in Canada when determining what information must be reported under Part XX.

Excluded seller

3.7 A seller is excluded if one of the following is true:

  1. They are an entity for which the platform operator facilitated more than 2,000 relevant services for the rental of immovable property in respect of a property listing during the reportable period. Relevant services are calculated by totalling the number of days each unit was rented at that address (see paragraph 17 in Chapter 6).
  2. They are a governmental entity, which generally includes the government of a jurisdiction, a political subdivision or public body performing a function of government and, subject to conditions, an agency, controlled entity or instrumentality of a jurisdiction that one or more of them wholly owns.
  3. They are an entity whose stock (or that of a related entity) is regularly traded on an established securities market.
  4. The platform operator solely facilitated for the seller less than 30 relevant activities for the sale of goods for which the total amount of consideration paid or credited did not exceed CDN $2,800 during the reportable period.

3.8 In order to determine whether a seller is an excluded seller, a reporting platform operator may rely on:

3.9 Although the reporting requirements do not apply in respect of an excluded seller, the platform operator will need to retain the documentation on the excluded seller for any instance of verification.

Seller’s jurisdiction of residence

3.10 A reporting platform operator must generally consider a seller resident in the jurisdiction of the seller's primary address. The primary address for an individual is the address of their principal place of residence. The primary address for a seller that is an entity is the address of their registered office.

3.11 When a reporting platform operator is collecting address information on a new seller who is an individual with the intention of treating such information as the primary address, they should ensure that the seller is made aware that the address sought is that at which the seller lives and considers its primary residence.

3.12 While, in many cases, the seller’s home address is likely to correspond to the seller’s billing address, where these two information items differ, the home address should be treated as the seller’s primary address.

3.13 In cases where the reporting platform operator only collects billing address information, such address can be treated as the seller’s primary address.

Rental of immovable property

3.14 Sellers who provide relevant services with respect to the rental of immovable property that is located in a reportable jurisdiction may also be captured by the definition of reportable seller, without regard to their jurisdiction of residence. For example, a seller whose primary address is located outside of a partner jurisdiction that has a rental property located in Canada is a reportable seller for any reporting period in which they either rent the property or receive consideration in connection with such a rental.

Paid or credited consideration

3.15 For Part XX purposes, consideration is compensation in any form paid or credited to a seller in connection with relevant activities. The amount of consideration must be known or reasonably knowable by the reporting platform operator to be treated as consideration for the purposes of this definition.

3.16 It is not required that the user to whom the relevant activities are provided also pays the consideration for such transaction. Platform operators should note that consideration is only reportable when it is paid or credited to the seller, not when it is promised to the seller. For consideration that is paid over multiple periods, see paragraph 7.5 for details.

3.17 Example: if a buyer and a seller have agreed to terms of a purchase, this does not make the transaction reportable for Part XX. If the seller receives an invoice for the services, this does not make the transaction reportable for Part XX. The reportable event for purposes of Part XX is when the consideration changes hands from the buyer to the seller.

Chapter 4 – Relevant activity

Introduction

4.1 To be captured by the Part XX reporting rules, all reporting platform operators must facilitate relevant activities, and all reportable sellers must do business for relevant activities. These relevant activities are:

Selling goods

4.2 Selling goods for consideration is a relevant activity. For Part XX purposes, goods are any tangible property or, for civil law, any corporeal property.

4.3 Intangible assets, such as audiobooks and other digital content, are not goods for the purposes of Part XX.

4.4 Example: platform ABC allows sellers to sell tangible goods to buyers through their e‑commerce website. This platform would be facilitating the provision of a relevant activity and could be subject to Part XX reporting requirements.

4.5 Example: Platform DEF’s only activity is to allow sellers to provide access to an audiobook library for a fee through their website. Since audiobooks are an intangible asset, the platform would not be facilitating the provision of a relevant activity (for example, selling goods as defined in paragraph 4.2) and therefore does not have reporting requirements under Part XX.

Rental of immovable property

4.6 Immovable property is any real or immovable property. The rental of immovable property for consideration is a relevant service and a relevant activity. Immovable property includes both residential and commercial property, as well as offices, hotel rooms, bed-and-breakfast rooms, houses, apartments, mobile homes, campgrounds, certain boats, parking spaces.

4.7 A property listing includes all immovable property units located at the same street address and offered for rent on a platform by the same seller. For example, if a landlord owns a building complex containing multiple apartments, the building would be treated as a single property listing for the purposes of the reporting requirements. The number of days each subunit was rented should be aggregated to determine the number of days each property listing was rented during the reportable period.

4.8 If a property has a large number of units, the seller may be an excluded seller (see paragraph 3.7 in Chapter 3).

4.9 Relevant activities include both short- and long-term rentals of immovable property, no matter the type of the rights held by the seller over the rented immovable property, such as a freehold, leasehold, rental, usufruct, or other arrangement.

4.10 Example: platform ABC allows property managers (the sellers) to list their cottages on the ABC website to connect with renters (the buyers) who are interested in short-term accommodation. This platform would be facilitating relevant activities and could be subject to Part XX reporting requirements.

Rental of a means of transport

4.11 The rental of a means of transport for consideration is a relevant activity. This includes any means of transporting people, such as a car, a bicycle, or any other means of transport that can be rented through a platform.

4.12 Example: platform ABC allows sellers to rent their bicycles to buyers for hours, days, or weeks at a time, and subsequently requires the bicycles to be returned by the agreed upon time, and charges more the longer the bicycle is borrowed. Therefore, this platform facilitates a relevant activity and could be subject to Part XX reporting requirements.

Personal Service

4.13 A personal service is a service involving time- or task-based work performed by one or more individuals at the request of a consumer using a platform, unless the service is purely ancillary to the overall transaction but does not include a service provided by a seller pursuant to an employment relationship with the platform operator or a related entity of the platform operator. An ancillary service is a service that is in addition to or supports the main service or good being purchased.

4.14 An example of ancillary services is shipping goods purchased through an e‑commerce platform. Although the shipping service is time- or task-based, it is ancillary to the transaction of purchasing goods.

4.15 Personal services include a wide range of services, such as transportation and delivery services, manual labour, tutoring, copy writing, and data manipulation. They can also include clerical, legal, or accounting tasks if they are carried out following a specific request.

4.16 Personal services usually fall into one of two categories. The first encompasses work that can be performed online and delivered to other users anywhere in the world, including tutoring, IT services, data entry, or copy writing. On the other hand, there are also services that, although facilitated by a platform, are physically carried out offline, usually at a specific physical location. Such services can include transportation and delivery services, housekeeping, gardening, or renovation work.

4.17 Time- or task-based services performed by one or more individuals engaged by the seller will meet the definition of personal service. For example, a seller providing transportation services by relying on one or more drivers is providing personal services involving transportation.

4.18 Time- or task-based services performed jointly or simultaneously by more than one seller for a single user, including “crowd-work” arrangements, will meet the definition of a personal service. For example, a user may request support from multiple sellers to process a single spreadsheet, splitting the task between the individual sellers. In this case, each of these tasks is a personal service.

4.19 Time- or task-based services that are simultaneously provided to more than one user, such as online language classes, musical or artistic performances, or sports sessions, including those provided through online streaming technology, will qualify as personal services between the seller and each of the users.

4.20 However, non-customised pre-recorded digital content is not time- or task-based and would not be considered a personal service for the purposes of Part XX. In addition, publicly accessible transportation services operated following a pre-determined timetable, such as coach, train, and airplane services, are not carried out following a specific user request and therefore are not personal services.

4.21 Personal services can be provided on either a short-term ad-hoc basis or can be long-term assignments. For example, seasonal or temporary work provided at restaurants, hotels or events, as well as longer-term freelance arrangements.

4.22 Example 1: Platform ABC allows meal delivery drivers (the sellers) to connect with buyers who would like to buy meals from restaurants and pay for a delivery service. This platform would be facilitating a relevant activity and could be subject to Part XX reporting requirements.

4.23 Example 2: Platform ABC allows skilled tutors (the sellers) to connect with buyers who would like one-on-one coaching or tutoring on a particular subject. These tutoring sessions are tailored to each student. This platform facilitates a relevant activity and could be subject to Part XX reporting requirements.

4.24 It is possible for sellers to have multiple relevant activities with which they derive profit from consideration. This is detailed more in Chapter 7.

Chapter 5 – Due diligence

Introduction

5.1 Reporting platform operators must take steps to verify the reliability of the information they are required to collect and report under the Part XX rules. These steps are referred to as due diligence procedures.

5.2 These due diligence procedures must include verifying the reliability of:

Due diligence procedures

5.3 The due diligence procedures must be completed by December 31 of the reportable period they relate to, except for transitional periods, as noted in paragraph 5.8 below.

5.4 The due diligence procedures must be completed by December 31 of the second reportable period of the reporting platform operator for sellers that were already registered on a platform:

  1. as of January 1, 2024; or
  2. as of the date on which an entity becomes a reporting platform operator

5.5 A reporting platform operator may elect to complete the due diligence procedures for active sellers only (for more information on active sellers, see paragraph 3.3 in Chapter 3). Reporting platform operators relying on this option must have adequate procedures and enforcement measures in place to ensure that all active Sellers in a reportable period are fully documented pursuant to the due diligence requirements by 31 December of that reportable period. Such procedures and measures could for instance include a mechanism to no longer allow undocumented sellers to access the platform or to not pay out the consideration to such sellers.

5.6 Due diligence procedures should be conducted by reporting platform operators using all records available to them, including any publicly available electronic interfaces that can be used to ascertain the validity of the TIN. This includes publicly available information, information collected by the platform operator, or information from any other source available to the platform operator.

5.7 Example: if the reporting platform operator has the primary address of the seller and their jurisdiction of residence, it is reasonable that the platform operator should be able to confirm that the primary address is within that jurisdiction of residence.

5.8 For transitional periods (see 5.3 above), a reporting platform operator may conduct its due diligence procedures using any electronically searchable records available to the reporting platform operator.

5.9 Reporting platform operators shall maintain adequate records to support their due diligence efforts.

Reliance on previous due diligence

5.10 A reporting platform operator may rely on the due diligence procedures conducted for previous reportable periods if all of the following is true:

5.11 If the reporting platform operator becomes aware that the primary address or any other collected information has changed, they cannot rely on previous due diligence and must complete the due diligence procedures again for this seller.

5.12 Example: if a seller notifies a platform operator that their contact information has changed, the platform operator now has a reason to know that the seller’s original information may be unreliable or incorrect and therefore has a duty to verify that information.

5.13 With respect to the primary address of a seller, a reporting platform operator must collect and verify the primary address of the seller as part of the initial due diligence procedures. The reporting platform operator has to reconfirm this address every 36 months, unless they become aware that any information collected in respect of the primary address for that seller has become unreliable or incorrect.

5.14 Example: a reporting platform operator performed due diligence on a seller 24 months ago when the seller first registered with the platform. The platform operator subsequently receives an email from the seller that their primary address has changed. The platform operator must complete the due diligence procedures for this seller again because of the change in circumstances.

5.15 If, by virtue of information provided by the CRA, a reporting platform operator has a reason to know that any of the seller information or the address of a property listing may be inaccurate, it must verify such information using reliable, independent-source documents, data, or information.

Service providers

5.16 A reporting platform operator may rely on a third-party service provider, including another platform operator, to fulfil its due diligence requirements. Such requirements remain the responsibility of the reporting platform operator. This enables a reporting platform operator to rely on an independent third-party service provider with better resources and technologies to carry out the due diligence procedures on its behalf. This also seeks to avoid duplicative or multiple application of the due diligence procedures by entities that are all platform operators with respect to the same platform.

5.17 If a platform operator is being relied upon as a third-party service provider with respect to the due diligence procedures of another platform operator's platform, the platform operator completing the due diligence may carry out the due diligence procedures pursuant to substantially similar rules in its partner jurisdiction.

5.18 A reporting platform operator can rely on one or more service providers to meet its due diligence requirements under Part XX. However, the due diligence and information reporting requirements remain the responsibility of the reporting platform operator. The mere provision of service by a third party does not make it a platform operator or have reporting and due diligence requirements for the purposes of Part XX.

Chapter 6 – Part XX reporting

Introduction

6.1 All reporting platform operators that have reportable sellers using their platform during a reportable period are required to file a Part XX information return with the CRA for that period, unless they have adequate assurances that the information for all their reportable sellers for that reportable period has or will be reported by another platform operator (see paragraph 6.23-6.27 below). The return must be electronically filed by January 31 of the year following the calendar year in which the seller is identified as a reportable seller in the prescribed manner. This chapter describes the contents of the Part XX information return.

6.2 The reporting platform operator must also provide each reportable seller with the information specific to them that is included in the Part XX information return. This information must be provided to the reportable seller by January 31 of the year following the calendar year in which the seller is identified as a reportable seller. For example, if a seller is a reportable seller in the calendar year 2024, the reporting platform operator must provide the relevant information to this reportable seller by January 31, 2025.

6.3 The new Part XX reporting requirements came into force on January 1, 2024. A reportable period for purposes of Part XX is the calendar year during which the platform operator is a reporting platform operator. Therefore, the first reportable period is the calendar year 2024. Part XX information returns for that first reportable period are due January 31, 2025.

6.4 A platform operator is not required to file a Part XX information return (or any type of report indicating there is no information to report, also referred to as NIL reporting) with the CRA for a calendar year if in respect of that year they have no reportable sellers or another platform operator is reporting in respect of all their reportable sellers.

6.5 The Part XX information return must be filed electronically and in a prescribed format in accordance with the CRA’s filing instructions. These filing instructions are summarized in this chapter. 

Reporting platform operator information

6.6 The Part XX information return must include the reporting platform operator’s legal name, registered office address, and taxpayer identification number (TIN), along with the business names of any platform operators the reporting platform operator is reporting for.

6.7 A TIN is a unique number used to identify an individual or entity for tax purposes, such as a social insurance number, or a CRA business number or trust account number. TINs are discussed further in Chapter 8.

Reportable seller information

6.8 The Part XX information return must include certain information for each reportable seller that provided a relevant activity during the reportable period on any of the platforms of the reporting platform operator.

Identification information

6.9 The identification information required to be provided for each reportable seller is:

6.10 The jurisdiction of residence for tax purposes to be reported is the seller’s jurisdiction at the end of the relevant calendar year. If the seller has more than one jurisdiction of residence for tax purposes, all those jurisdictions should be reported.

Relevant activity information

6.11 The relevant activity information required to be provided for each reportable seller includes:

6.12 Consideration must be reported in the currency in which it was paid or credited. If the seller was paid or credited in more than one currency type (for example, in both Canadian dollars and American dollars), the amount in each currency type must be reported separately.

6.13 Example: A reportable seller is receiving monthly rental payments, and the consideration received from the tenant changes from Canadian dollars to Euros after the first two quarters into the year. The seller must report the consideration received from the tenant in Canadian dollars for the first two quarters, and the seller must report the last two quarters in Euros as these would be the currencies in which the tenant paid rent.

6.14 Example: If a reportable seller lists a short-term rental accommodation for rent, and lists the cost to rent in Canadian dollars, some platforms offer the availability for buyers to rent the accommodation with other currencies and provide a service to exchange to the listed currency for a small fee. If the seller is paid or credited in Canadian dollars even if the buyer paid in Euros, the Canadian dollar amount should be reported in this circumstance.

6.15 Where consideration was paid or credited to a seller in any form other than traditional currency (referred to as fiat currency), it should be reported in Canadian dollars. To do this, convert or value it in a reasonable and consistent way. For example, if a seller is paid in a cryptocurrency, the fair market value at the time the consideration is paid or credited will need to be calculated in Canadian dollars. See Chapter 7 for more details.

6.16 If a seller provided more than one type of relevant activity during a reporting period, report the amounts by activity. For example, if a seller sold goods and provided personal services during a reporting period, the consideration paid or credited along with the number of relevant activities will need to be reported separately for each. For the rental of immovable property, report the amounts separately for each property listing.

6.17 A property listing includes all immovable property units located at the same street address that are offered for rent on a platform by the same seller. For example, separate apartment units in a building that the same seller offers for rent would be one property listing. To determine the number of days a property listing was rented during a reporting period, the number of days each sub-unit was rented should be totalled. This same rule also applies to determine if a seller is an excluded seller as a result of providing more than 2,000 relevant services for the rental of immovable property (see section 3.7 in Chapter 3). The type of each property listing must also be reported. Examples of property types are office, hotel room, house, apartment, campground, and parking space.

6.18 A reporting platform operator is not required to collect and report a reportable seller’s TIN or business registration number (BRN) where the reportable seller’s jurisdiction of residence does not issue such numbers. Reporting and collecting a reportable seller’s TIN is also not required if the reportable seller’s jurisdiction of residence does not require the collection of the TIN.

6.19 A BRN is a number assigned to an entity when it is formed or registered to carry on business in a jurisdiction. For example, an incorporated business may be assigned a corporation number upon incorporation. This number is distinct from a business number (BN) that may be assigned to that entity for tax identification purposes (that is, TIN). However, it is possible that in some jurisdictions the BRN and TIN can be the same number.

6.20 Reporting platform operators are not required to collect BRNs for sellers that are Canadian entities (given that Canada does not issue BRNs). Only the BN would be required. The situation can be different for entities that are not Canadian. For example, a non-resident seller may have a TIN and a BRN in their jurisdiction. In this case, both numbers would have to be provided.

Financial account identifier

6.21 A financial account identifier is a unique identifying number or reference, available to the reporting platform operator, of the bank account or other payment account to which consideration is paid or credited. (for example, a bank account number). This would be the account associated with the consideration paid or credited to the seller. Reporting financial account identifiers are only required to be reported if they are available to the reporting platform operator and either the jurisdiction of residence of the reportable seller or, in the case of the rental of immovable property, the jurisdiction in which the property is located, is a jurisdiction that has been specified by the minister of national revenue. A financial account identifier would be available to a platform operator when it is available to another platform operator of the same platform or any third-party service provider.

Filing procedures

6.22 A reporting platform operator must get an RZ number before filing a Part XX information return for the first time. If the platform operator is resident in Canada, they will be able to file their Part XX information return through their My Business Account. If they are not resident in Canada, they will need to first get a Web Access Code (WAC) to electronically file their return through the CRA web portal. The Part XX information return must be filed with the CRA in prescribed form using an XML Schema. More details on how to get an RZ number or a WAC, along with detailed procedures for filing a return, go to Filing information returns.

Reporting by an alternate platform operator

6.23 Depending on certain limitations noted below, a platform operator can have another platform operator fulfil its reporting requirements for all or some of its reportable sellers. This avoids duplicate reporting for such sellers when two platform operators have common reportable sellers. When this option is chosen, platform operator 1 would report all the information for that seller (that is, seller’s identification information and all transactional information from both platform operators) in its information return. This would be a Part XX information return filed in Canada or an information return filed under substantially similar rules in a partner jurisdiction. Platform operator 1 would also give the combined information that is reported to the seller. Platform operator 2 would have no further reporting requirements for that seller.

6.24 For reportable sellers resident in Canada, the alternate platform operator is required to file a Part XX information return in Canada as the information on that seller must be reported according to the rules in Canada.

6.25 For reportable sellers resident in another jurisdiction (not resident in Canada), the information can be reported according to the rules in Canada or under substantially similar rules in a partner jurisdiction. To be reported under the rules of a partner jurisdiction (that is, included in an information return filed with that jurisdiction), the reporting rules of that jurisdiction must apply to the seller. If the reporting rules of that jurisdiction are different than the Canadian rules (for example, some jurisdictions consider platforms that have less than one million euros of aggregate consideration to be excluded platforms and therefore do not report) then the platform operator must ensure that the Canadian resident seller’s information is reported to the corresponding jurisdiction. If not, the information for that seller must be reported according to the rules in Canada (that is, included in a Canadian Part XX information return).

6.26 For example, platform Z is operated by two platform operators (PO1 who is resident in Canada and PO2 who is resident in jurisdiction 2). Canada and jurisdiction 2 are both partner jurisdictions of each other. The rules in jurisdiction 2 are substantially similar to those in Part XX. Platform Z is used by three categories of sellers: seller A (resident in Canada), seller B (resident in jurisdiction 3) and seller C (resident in jurisdiction 4). While jurisdiction 4 is a reportable jurisdiction in both Canada and jurisdiction 2, jurisdiction 3 is only a reportable jurisdiction in Canada, and not in jurisdiction 2. PO2 is not a reporting platform operator under Part XX rules. However, PO2 provides most of the administrative functions for platform Z.

Pictorial representation of the scenario outlined in paragraph 6.26.

6.27 A reportable platform operator that is relying on another platform operator to fulfil its Part XX reporting requirements must get adequate assurances that the other platform operator has or will fulfil those reporting requirements. This can be achieved by obtaining written confirmation from the other platform operator, including documented intercompany agreements. The documents should clearly state the specific group of sellers that the assuming platform operator is agreeing to report on and the jurisdictions they will be reporting to. Both platform operators should also put in place a mechanism to make sure that they have full visibility on the reportable sellers of the reporting platform operator for which the other platform operator has ensured the reporting requirements and that such requirements are being effectively performed.

Late-filing penalty

6.28 Every reporting platform operator that fails to file a Part XX information return when required is liable to a late-filing penalty under subsection 162(7.01) of the Income Tax Act.

Chapter 7 – Special circumstances

Mixed transactions

7.1 Some platforms facilitate more than one type of relevant activity (see Chapter 4). If this is the case for a reporting platform operator, there are some further considerations.

7.2 Activity specific information (such as amounts of consideration or number of relevant activities) must be reported by activity type for each seller. Where a seller is involved in more than one activity type, the amounts reported for that seller in the Part XX information return must be broken down and reported separately for each activity type. For example, where a seller provides both personal services and the sale of goods, the totals for each of those activities will be reported on separate lines in the Part XX information return.

7.3 Certain transactions by a seller may involve elements of more than one activity type. For example, a transaction may have elements of both the sale of goods and personal services. If the elements can be split or identified separately, then each should be reported separately. Where the elements cannot be split or identified separately, they should be reported under only one element. For example, where a seller provides a tiling service and also supplies the installed tiles, a core component of the transaction is the sale of goods. However, another key component is the installation of the tiles by the seller, which meets the definition of a personal service. This is because it involves the performance of time- or task-based work by one or more individuals at the request of the customer. When the platform operator can apportion amounts to each of these elements (sale of goods and a personal service), those amounts should be reported separately.

7.4 However, if a service element is purely ancillary to the other elements of the transaction, it should not be broken down separately. Instead, the full amount should be reported under the primary element of the transaction. For example, where a seller sells and then ships goods to a consumer, the element of the transaction involving the seller’s labour in mailing the goods could be purely ancillary to the supply of goods. Therefore, the total consideration should be reported under the sale of goods.

Consideration over multiple periods

7.5 Consideration is a key determination when considering a reportable seller (see Chapter 3). Consideration paid or credited to a seller for a relevant activity is included in the Part XX information return for the reportable period in which it was paid or credited, even if that is not the same reportable period in which the activity was provided. For example, if a seller provides a personal service in December 2024 but is not paid until January 2025, the consideration for that service would be reported in the Part XX information return for calendar year 2025. If the consideration is paid or credited in more than one reportable period, then the portion of the amount paid or credited in each period will be reported in that period. If in the example above, $100 of the consideration was paid in December 2024 and the remaining $200 was paid in January 2025, then $100 would be reported in the information return for calendar year 2024 and $200 would be reported in the information return for calendar year 2025.

7.6 Consideration would be paid or credited to a seller if it is paid or credited to an account specified by the seller, even if such account is not in the name of the seller. Also, if the seller accepts a third-party issued gift certificate or similar voucher (such as platform issued gift card), the consideration would be paid or credited to the seller on the day they accept the voucher as payment.

Treatment of refunds and adjustments for a prior period

7.7 The amount of consideration reported for a seller in the Part XX information return for a particular reportable period should be the net amount that is paid or credited to that seller for that period. To calculate the net amount, any refunds, or other adjustments to consideration (such as cancellations) should be deducted. Where a refund or other adjustment is issued for consideration paid or credited in a previous reportable period (that is, after the reporting deadline for such period), it is expected that the reporting platform operator submits an amended information return, reflecting any relevant changes about the consideration paid or credited to the affected reportable sellers. An amended information return should also be submitted when any other information about a reportable seller is corrected after the reporting deadline.

Consideration measurability and barter transactions

7.8 The Part XX rules work on the premise that consideration is required to be reported only if it is known or reasonably knowable by the platform. This is a key component of determining a reporting platform operator (see Chapter 2). Consequently, amounts that cannot be reasonably knowable to the reporting platform operator, in light of its business model or the type of consideration, would not be treated as consideration. Consideration can take any form including money, crypto assets or payments in kind. It includes tips, gratuities and incentives paid or credited to a seller.. Also, consideration is the amount net of any fees, commissions, or taxes withheld or charged by the platform operator.

7.9 If consideration for a transaction comes in a form other than fiat currency (such as a barter transaction or payment in cryptocurrency), the fair market value of that consideration in Canadian dollars is the reportable consideration amount. The calculation method used to determine fair market value must be reasonable and used consistently by the platform operator. If the price of a particular good or service is listed on the platform in a fiat currency, it is reasonable to assume that is the fair market value, unless there is clear evidence of another value (such as when the property received as compensation has an established value, an example would be crypto assets).

7.10 Example: assume Platform A will facilitate the collection of consideration for a relevant activity in either fiat currency or cryptocurrency. A seller on the platform sells goods in exchange for a well known cryptocurrency. Since the price of that cryptocurrency is tracked and readily available, the amount should be converted to Canadian dollars using the publicly available value of that cryptocurrency at the time the consideration was paid or credited to the seller. For more information on crypto-assets, cryptocurrency, and crypto valuation refer to: Information for crypto-asset users and tax professionals – Canada.ca.

Jointly registered sellers

7.11 Where more than one person is jointly registered on a platform as a seller, the reporting platform operator must identify all of the joint sellers and report separately on each of those individuals or entities. If the platform operator can reliably determine the amounts due to each seller, then those amounts should be reported. If not, the total consideration received by all of the jointly registered parties should be reported for each seller. 

7.12 Example: platform ABC facilitates the sale of goods through their e-commerce website. Seller A and Seller B jointly run a business selling handmade soaps through the platform. Platform ABC notes that there are two names registered under this account. However, sales are not broken down between the two names. Platform ABC must put together seller information for both sellers registered, complete the due diligence for both sellers registered, and report the total sale information for both sellers in the Part XX information return.

7.13 Where a person is registered as a seller in their capacity as agent for another person (for example, a key company acting on behalf of the owner of rented immovable property or an agency selling goods for its clients) and the client of the agent is also registered as a seller, only the client should be subject to reporting as a reportable seller.

Chapter 8 – General requirements

Record keeping

8.1 All reporting platform operators must keep records, including documentary evidence, for a period of at least six years following the end of the last calendar year in respect of which the record is relevant. The records must be kept at the reporting platform operator’s place of business or at another place the CRA may designate, and must be kept in an electronically readable format.

Taxpayer identification number

8.2 A Taxpayer identification number (TIN) is a number used by the CRA to identify an individual or entity, including a social insurance number, a business number, or an account number issued to a trust. For a jurisdiction other than Canada, it means a taxpayer identification number including a VAT/GST registration number issued by the jurisdiction of the primary address of the seller. In the absence of a TIN, it could be any functional equivalent.

8.3 A foreign taxpayer identification number (foreign TIN) is a unique combination of letters or numbers, assigned by a jurisdiction to an individual or entity and used to identify the individual or entity for purposes of administering the tax laws of such jurisdiction. A foreign TIN includes:

8.4 The TIN of each jurisdiction in which the seller is resident for tax purposes needs to be reported. Any other TIN should also be reported.

8.5 Every reportable seller shall provide their TIN at the request of a reporting platform operator that is required to make a Part XX information return. Exceptions to this requirement are discussed in paragraphs 6.18 to 6.20 in Chapter 6.

8.6 A reporting platform operator must not knowingly use, communicate, or allow to be communicated, otherwise than as required or authorized under Income Tax Act or a regulation, the reportable seller’s TIN without their written consent.

8.7 Any reportable seller who fails to give their TIN on request to a reporting platform operator (when the operator has to make an information return requiring the TIN) is liable to a penalty of $500 for each such failure unless:

8.8 If a reportable seller fails to provide their TIN when requested, the reporting platform operator should document their efforts to obtain the TIN from the seller and be prepared to give that documentation to the CRA if requested.

Compliance

8.9 The CRA is responsible for the administration of Part XX and will take appropriate steps to promote and ensure compliance. The CRA will also engage in discussions with its exchange partners if a concern is raised in connection with the reported information.

8.10 The CRA will take all appropriate measures available under its domestic law to address the errors or non-compliance.

8.11 Non-compliance includes:

Anti-avoidance provision

8.12 Part XX has an anti-avoidance provision. If a person enters into an arrangement or engages in a practice, the main purpose of which can reasonably be to avoid a requirement under Part XX, the person is subject to the requirement as if the person had not entered into the arrangement or engaged in the practice.

Appendix

The Part XX rules described in this guidance document can be found in sections 282 to 295 of the Income Tax Act.

Legislative definitions

The following definitions from the Income Tax Act apply for purposes of Part XX.

Active seller
means a seller that either provides relevant services or sells goods during the reportable period or is paid or credited consideration in connection with relevant activities during the reportable period.
Consideration
means compensation in any form that is paid or credited to a seller in connection with relevant activities, the amount of which is known or reasonably knowable by the platform operator.
Entity
means a person (other than a natural person) or a legal arrangement, such as a corporation, partnership, trust, or foundation.
Established securities market
for purposes of this definition means an exchange that:
  1. is officially recognized and supervised by a governmental authority in which the market is located; and
  2. has an annual value of shares traded on the exchange (or a predecessor exchange) exceeding one billion USD during each of the three calendar years immediately preceding the calendar year in which the determination is being made. For this purpose, if an exchange has more than one tier of market level on which stock may be separately listed or traded, each of those tiers must be treated as a separate exchange.
Excluded platform operator
means a platform operator that demonstrates to the satisfaction of the Minister that the platform’s entire business model is such that it does not
  1. allow sellers to derive a profit from the consideration; or
  2. have reportable sellers.
Excluded seller
means a seller
  1. that is an entity for which the platform operator facilitated more than 2,000 relevant services for the rental of immovable property in respect of a property listing during the reportable period;
  2. that is a governmental entity (see definition below);
  3. that is an entity the stock of which is regularly traded on an established securities market (see definition below) or a related entity (see definition below) of an entity the stock of which is regularly traded on an established securities market; or
  4. for which the platform operator solely facilitated less than 30 relevant activities for the sale of goods and for which the total amount of consideration paid or credited did not exceed $2,800 during the reportable period.
Fiat currency
means a currency that is used by a country and is designated as legal tender in that country.
Financial account identifier
means the unique identifying number or reference, available to the platform operator, of the bank account or other payment account to which consideration is paid or credited.
Goods
means any tangible property or, for civil law, any corporeal property.
Government entity
for purposes of this definition means the government of a jurisdiction, any political subdivision of a jurisdiction (which, for greater certainty, includes a state, province, county or municipality), a public body performing a function of government in a jurisdiction or any agency or instrumentality of a jurisdiction wholly owned by one or more of the foregoing, unless it is not an integral part or a controlled entity of a jurisdiction (or a political subdivision of a jurisdiction) and for these purposes
  1. an integral part of a jurisdiction means any person, organization, agency, bureau, fund, instrumentality or other body, however designated, that constitutes a governing authority of a jurisdiction and where the net earnings of the governing authority are credited to its own account or to other accounts of the jurisdiction, with no portion inuring to the benefit of any private person, except that an integral part does not include any individual who is a sovereign, official or administrator acting in a private or personal capacity;
  2. a controlled entity means an entity that is separate in form from the jurisdiction or that otherwise constitutes a separate juridical entity, provided that the entity is wholly owned and controlled by one or more governmental entities directly or indirectly through one or more controlled entities, the entity’s net earnings are credited to its own account or to the accounts of one or more governmental entities, with no portion of its income inuring to the benefit of any private person, and the entity’s assets vest in one or more governmental entities upon liquidation and dissolution; and
  3. for the purposes of paragraphs (a) and (b), income is deemed not to inure to the benefit of private persons if such persons are the intended beneficiaries of a governmental program and the program activities are performed for the general public with respect to the common welfare or relate to the administration of government, and income is deemed to inure to the benefit of private persons if the income is derived from the use of a governmental entity to conduct a commercial business that provides financial services to private persons.
Government verification service
means an electronic process made available by a reportable jurisdiction to a platform operator for the purposes of ascertaining the identity and residence of a seller.
Immovable property
means real or immovable property.
Natural person
for purposes of this definition means an individual other than a trust.
Partner jurisdiction
means each jurisdiction identified as a partner jurisdiction by the Minister on the Internet website of the Canada Revenue Agency or by any other means that the Minister considers appropriate.
Personal service
means a service involving time- or task-based work performed by one or more individuals at the request of a user, unless such work is purely ancillary to the overall transaction, but does not include a service provided by a seller pursuant to an employment relationship with the platform operator or a related entity (see definition above under “excluded seller”) of the platform operator.
Platform

means a software, including a website or a part of it and applications, including mobile applications, accessible by users and allowing sellers to be connected to other users for the provision of relevant services or the sale of goods, directly or indirectly, to such users (including the collection and payment of consideration in respect of relevant activities), but does not include, in the provision of relevant services or the sale of goods, software exclusively allowing without any further intervention

  1. the processing of payments in relation to relevant activities;
  2. listing or advertising in relation to relevant activities; or
  3. redirecting or transferring of users to a platform.
Platform operator
means an entity that contracts with sellers to make available all or part of a platform to such sellers.
Primary address
means
  1. in respect of a seller that is an individual (other than a trust), the address of the seller’s principal place of residence; and
  2. in respect of a seller that is an entity, the address of the seller’s registered office.
Property listing
includes all immovable property units located at the same street address and offered for rent on a platform by the same seller.
Related entity

for purposes of this definition (and the definition of “personal service” below) means in respect of an entity, means an entity if either entity controls the other entity or the two entities are controlled by the same entity or individual (and in the case of two entities that are investment entities described under paragraph (b) of the definition investment entity (as defined in subsection 270(1) of the Income Tax Act), the two entities are under common management and such management fulfils the due diligence obligations of the investment entities). For this purpose, control includes direct or indirect ownership of

  1. in the case of a corporation, shares of the capital stock of a corporation that
    1. give their holders more than 50% of the votes that could be cast at the annual meeting of the shareholders of the corporation, and
    2. have a fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the capital stock of the corporation;
  2. in the case of a partnership, an interest as a member of the partnership that entitles the member to more than 50% of
    1. the income or loss of the partnership, or
    2. the assets (net of liabilities) of the partnership if it were to cease to exist; and
  3. in the case of a trust, an interest as a beneficiary under the trust with a fair market value that is greater than 50% of the fair market value of all interests as a beneficiary under the trust.
Relevant activity
means
  1. a relevant service; or
  2. the sale of goods for consideration.
Relevant service
means, if provided for consideration:
  1. the rental of real or immovable property;
  2. a personal service;
  3. the rental of a means of transport; or
  4. a prescribed service.
Reportable jurisdiction
means
  1. for a reporting platform operator described in paragraph (a) of the definition reporting platform operator, Canada and any partner jurisdiction; and
  2. in any other case, Canada.
Reportable period
means a calendar year during which a platform operator is a reporting platform operator.
Reportable seller
means an active seller, other than an excluded seller, that is determined by the platform operator based on the due diligence procedures set out in sections 283 to 287 of the Income Tax Act to
  1. be resident in a reportable jurisdiction;
  2. have provided relevant services for the rental of immovable property located in a reportable jurisdiction; or
  3. have been paid or credited consideration in connection with relevant services for the rental of immovable property located in a reportable jurisdiction.
Reporting platform operator
means a platform operator, other than an excluded platform operator, if
  1. it is resident in Canada;
  2. it is resident, incorporated or managed in a partner jurisdiction, facilitates the provision of relevant activities by sellers resident in Canada or with respect to rental of immovable property located in Canada and elects to be a reporting platform operator; or
  3. it is not resident in Canada or a partner jurisdiction and it facilitates the provision of relevant activities by sellers resident in Canada or with respect to rental of immovable property located in Canada.
Seller
means a platform user that is registered at any time during the reportable period on the platform for the provision of a relevant service or the sale of goods.
TIN
means
  1. the number used by the minister to identify an individual or entity, including
    1. a social insurance number,
    2. a business number, and
    3. an account number issued to a trust; and
  2. in respect of a jurisdiction other than Canada, a taxpayer identification number, including a VAT/GST registration number issued by the jurisdiction of the primary address of the seller, or a functional equivalent in the absence of a taxpayer identification number.

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