Reporting fees for service
Reporting fees for service (RFS) is the legislated requirement for businesses and organizations (including sole proprietors and corporations) to report fees paid to other businesses for services provided. These payments must be reported to the Canada Revenue Agency (CRA) on the prescribed form, usually the T4A slip.
Collecting data on these payments allows the CRA to validate the income and expense amounts businesses and organizations report on their tax returns. Currently, as a part of the RFS requirement, businesses and organizations must report payments for services to businesses that exceed $500 in a calendar year.
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.
Who is required to report fees for service?
Those who are required to report fees for service include, but are not limited to:
- businesses of all sizes, from sole proprietorships to large corporations
- charities and non-profits
- municipal, provincial, and territorial governments
- Government of Canada departments and agencies
- public bodies performing a function of government in Canada
Our commitment to fairness
The CRA aims to apply the RFS requirement fairly and consistently, while minimizing challenges and supporting businesses and organizations in meeting their reporting obligations.
The RFS requirement upholds fairness in Canada’s tax system by:
- promoting a level playing field by ensuring that all businesses and organizations follow the same reporting standards and meet their tax obligations
- providing third-party reporting information to verify income and expenses reported by businesses and organizations
- limiting opportunities for participation in the underground economy and reducing the corporate tax gap
Your opinion matters
On March 1, 2024, the CRA launched a working group with key external stakeholders to better understand businesses’ and organizations’ awareness of, and readiness to comply with, the RFS requirement. An online questionnaire is also available to all businesses and organizations to provide their feedback. It will close on July 22, 2024.
Through these engagement activities, the CRA is seeking insights on the challenges Canadian businesses and organizations are facing with RFS payments. Your feedback will help identify ways to clarify reporting requirements, streamline processes, and proactively support businesses and organizations in understanding and meeting their tax obligations.
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