CRA extends the effective date for the taxability of trailing commissions

In its 10 February 2026 version of GST/HST Notice 344 CRA confirm earlier comments made in 22 December 2025 GST/HST Interpretation 246664 that “[a]s a result of … industry developments” it “will enforce the application of the GST/HST to supplies made by dealers on or after July 1, 2026, in exchange for trailing commissions.” In a revised version of the Notice issued on 26 May 2026, CRA changed the effective date, by stating:

The CRA will enforce the application of the GST/HST to:

• these supplies made by dealers on or after January 1, 2028
• any such supplies made before that date where the dealer has treated the supplies as taxable by claiming input tax credits (ITCs) on business inputs attributed to those supplies, with such enforcement applying from the first such supply to which inputs were attributed and related ITCs claimed

The comments in the revised Notice effectively acknowledge that this change will reduce net CRA collections since the mutual fund managers will claim ITCs for the GST/HST charged on the trailing commissions, and their taxability will now generate ITCs to the dealers.

Neal Armstrong. Summary of GST/HST Notice 344, Application of the GST/HST to Mutual Fund Trailing Commissions, 26 May 2026 under s. 123(1) – financial service – (l).