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Introduction – Small-Supplier Timing, Platform Work, and ITC Discipline
In Boylu v. The King, 2025 TCC 192, the Tax Court of Canada considered a recurring compliance problem for gig-economy workers: when (and on what evidence) the Canada Revenue Agency ("CRA") can assess an Uber driver for HST collectible, and how strictly the Court will apply the input tax credit ("ITC") rules when the taxpayer's records are incomplete.
The appeal concerned HST assessed on Uber fares for the 2015 and 2016 reporting periods, together with denied ITCs and failure-to-file penalties. Although the taxpayer did not dispute that his annual revenues exceeded the $30,000 small-supplier threshold, the case turned on a more technical—and often misunderstood—question: the c test under the Excise Tax Act is not triggered by annual totals alone, but by a rolling four-quarter look-back that depends on timing.
The Court found that the CRA misapplied the small-supplier rules for 2015 and declined to allow the CRA to repair the missing factual foundation after trial, particularly given the Informal Procedure context and the taxpayer's self-representation.
At the same time, Boylu is not a taxpayer "windfall" decision. The Court still imposed strict discipline on ITCs, denying additional credits where expenses were personal, where mixed-use costs were not reliably apportioned, and where the supporting documentation did not contain the prescribed information. The result is a practical roadmap: the CRA's assessment theory must align with the statutory mechanics, but taxpayers must still meet the substantive and documentary standards for ITCs. In this context, early involvement of an expert Canadian tax lawyer can be critical—both to challenge flawed assumptions in an assessment and to build a defensible record on registration, small-supplier status, and ITC support.
The Small-Supplier Rules Under the Excise Tax Act: Timing, Not Annual Totals
The small-supplier regime under Part IX of the Excise Tax Act functions as a statutory threshold mechanism that determines when a person becomes required to register for, collect, and remit GST/HST. While often treated in practice as a simple $30,000 annual revenue test, Boylu v. The King confirms that the statutory design is both more technical and more exacting.
Under sections 148 and 148.1 of the Excise Tax Act, a person qualifies as a small supplier throughout a particular calendar quarter—and the first month following that quarter—if the total consideration for taxable supplies in the four immediately preceding calendar quarters does not exceed $30,000. The inquiry is therefore retrospective and rolling. It does not turn on annual gross revenue, nor does it permit a mechanical "year-to-date" approach that triggers registration obligations the moment cumulative sales exceed the threshold.
This timing-based structure has two significant consequences. First, small-supplier status may continue even after a taxpayer earns more than $30,000 in a given calendar year, depending on how those revenues are distributed across quarters. Second, the loss of small-supplier status—and the corresponding obligation to register and collect tax—can only arise at defined statutory transition points, not at an indeterminate moment chosen by administrative convenience.
Boylu illustrates that these mechanics are not merely formal. Where the CRA seeks to assess HST on the basis that a taxpayer ceased to be a small supplier during a particular period, it must establish—through assumptions or evidence—the quarterly timing necessary to support that conclusion. Reliance on annual income figures alone is insufficient because the Excise Tax Act does not equate annual revenue with the loss of small-supplier status.
Importantly, the decision does not relax the substantive obligations imposed once small-supplier status is lost. Once a taxpayer becomes required to register under subsection 240(1) of the Excise Tax Act, the obligation to collect tax applies until deregistration, even if revenues later decline. Boylu therefore reinforces a dual message: the small-supplier rules protect taxpayers only within their precise statutory limits, but those limits must be applied precisely as written.
Uber Operations, Revenue Flow, and Claimed ITCs
The appellant was an Uber driver operating in Ontario throughout the 2015 and 2016 calendar years. Ride requests were received through the Uber app on his mobile phone, and each trip was completed in accordance with the app's parameters. Payments for rides were deposited directly into the appellant's bank account.
During the relevant periods, Uber deducted a 20% commission from gross fares and remitted the remaining amount to the driver. Uber controlled key elements of the service, including pricing, fees, and payment structure. The Uber driver testified that he understood Uber to be responsible for collecting and remitting HST during those years, based on information he received from his accountant and on how the platform operated at the time.
The CRA assumed that the appellant filed nil GST/HST returns for both 2015 and 2016 and that his annual revenues exceeded the $30,000 small-supplier threshold in each year. The appellant did not dispute the annual revenue figures, which were derived from his income tax filings, but no evidence was presented regarding the timing of those revenues every quarter.
Regarding expenses, the Uber driver claimed input tax credits for meals, telephone costs, fuel, and Highway 407 tolls. He testified that meal expenses related to his own consumption, that his phone was used for both personal and Uber-related purposes without reliable apportionment, and that original receipts had faded over time, leaving him with credit card statements as supporting records.
Where the CRA's Tax Assessment Failed—and Where It Did Not
Applying the statutory framework to the facts, the Tax Court concluded that the CRA's tax assessment for 2015 could not be sustained because it rested on an incorrect application of the small-supplier rules.
Although the CRA assumed that the appellant's annual revenues exceeded $30,000 in 2015, it failed to establish—through assumptions or evidence—the quarterly timing required by sections 148 and 148.1 of the Excise Tax Act. In particular, there was no factual foundation showing that the $30,000 threshold had been exceeded in the four calendar quarters preceding any particular quarter in 2015.
The Court rejected the CRA's attempt to cure this deficiency through post-trial submissions, suggesting that the threshold had been exceeded within the first three quarters of 2015. Allowing that position would have deprived the self-represented appellant of a meaningful opportunity to respond and would have undermined procedural fairness under the Informal Procedure. As a result, the Court found that the appellant remained a small supplier throughout 2015 and into January 2016, such that no HST collection obligation arose for that period.
By contrast, the Court accepted that the appellant ceased to be a small supplier as of February 1, 2016, because his 2015 revenues exceeded $30,000 and, applying the four-quarter look-back required by sections 148 and 148.1 of the Excise Tax Act, he no longer met the small-supplier definition as of that date.
From that point forward, the appellant was required to register and collect HST, notwithstanding the practical difficulty of collecting tax from riders through the Uber platform. The Court reaffirmed that administrative or commercial inconvenience does not relieve a taxpayer from statutory collection obligations once registration is required.
On the ITC side of the analysis, the appellant's partial success on small-supplier status did not translate into broader relief. The Court denied additional ITCs on both substantive and documentary grounds. Meal expenses were personal in nature, telephone costs were mixed-use without reliable apportionment, and Highway 407 tolls were exempt supplies.
While the Court accepted that credit card statements can constitute "supporting documentation" in principle, they failed to contain the prescribed information required for claims exceeding the applicable monetary thresholds. The appellant therefore did not meet the conditions in subsection 169(1) and subsection 169(4) of the Excise Tax Act.
Taken together, Boylu underscores a balanced but exacting approach to GST/HST enforcement. The CRA must assess within the strict mechanics of the statute and cannot rely on annual revenue figures to bypass the timing requirements embedded in the small-supplier regime. At the same time, taxpayers bear the burden of substantiating ITCs with both substantive evidence and compliant documentation.
For platform-based workers and other small businesses operating near the registration threshold, the decision highlights why early engagement with a top Canadian tax lawyer is often decisive—both in identifying assessment vulnerabilities and in ensuring that compliance obligations are met before disputes arise.
Pro Tax Tips – Practical Guidance for Small Suppliers and GST/HST Assessments
The Boylu decision highlights that GST/HST disputes involving small suppliers often turn not on whether annual revenues exceeded $30,000, but on whether the statutory timing rules have been applied correctly and supported with evidence.
Taxpayers operating near the small-supplier threshold should be mindful that the Excise Tax Act requires a precise four-quarter analysis, and that annual figures alone may be insufficient to establish a registration or collection obligation.
Where the CRA advances an assessment theory based on timing, it must demonstrate how and when small-supplier status was lost under the statute.
FAQ – Key Questions on Small-Supplier Status and GST/HST Assessments
Can the CRA assess GST/HST simply because annual revenues exceed $30,000?
No. Boylu confirms that exceeding $30,000 in a calendar year is not, by itself, sufficient. The CRA must apply the statutory four-quarter look-back required by sections 148 and 148.1 of the Excise Tax Act and establish when small-supplier status was actually lost.
Does success on small-supplier status guarantee entitlement to ITCs?
No. Boylu makes clear that small-supplier relief does not relax the substantive or documentary requirements for ITCs. Expenses must be incurred in commercial activities, properly apportioned where mixed-use applies, and supported by documentation containing the prescribed information.
What practical steps can small businesses and platform workers take to reduce GST/HST risk?
Taxpayers should track revenues quarterly, retain compliant supporting documentation, and review registration obligations proactively—particularly when operating near the small-supplier threshold. Early advice from an experienced Canadian tax lawyer can help prevent missteps that are difficult to correct after an assessment has been issued.
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