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ARTICLE · 17 FEBRUARY 2026

CRA Changes Its Policy On GST/HST Treatment Of Mutual Fund Trailing Commissions

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The Canada Revenue Agency (the "CRA") recently issued a GST/HST Interpretation Letter that introduces a significant policy change to the GST/HST treatment of trailing commissions (the "Proposed Policy Change").

CanadaFinance and Banking
Jamie Wilks
Jamie Wilks
Rini Rashid
Rini Rashid
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Overview of the CRA's Policy Change

The Canada Revenue Agency (the "CRA") recently issued a GST/HST Interpretation Letter that introduces a significant policy change to the GST/HST treatment of trailing commissions (the "Proposed Policy Change").1 Effective from July 1, 2026, the CRA will treat trailing commissions paid by an investment fund manager to both original dealers that placed an investor with a fund ("Original Dealers"), and successor dealers whose clients have remained investors in the fund ("New Dealers"), as being subject to GST/HST. This change departs from the CRA's longstanding position that trailing commissions paid to Original Dealers are exempt financial services. This change will have a material impact on many investment funds, investment fund managers, and dealers.

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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