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ARTICLE · 15 JULY 2026

TCC: No Easy Way To Pre-Pay Quarterly GST

Millar Kreklewetz
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A recent Tax Court of Canada decision confirms that businesses cannot bypass quarterly GST/HST installment obligations by overpaying the tax authority and expecting automatic credit allocation. The case of BMLex Avocats Inc. demonstrates that tax authorities have no legal duty to automatically apply surplus funds to future installments, and businesses must actively manage their quarterly compliance duties with specific, timely instructions for credit transfers.

CanadaTax
John Bassindale
John Bassindale
Isaac Thompson
Isaac Thompson

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Quarterly GST/HST installments are a persistent administrative headache for many business owners. However, a recent Tax Court of Canada (“TCC”) decision proves there are no easy shortcuts around these recurring compliance duties.

In the French-language, informal procedure decision BMLex Avocats Inc. v. His Majesty the King, 2026 TCC 107, (“BMLex”) the TCC confirmed that businesses are strictly responsible for tracking and allocating GST/HST installments. Specifically, a registrant cannot bypass this ongoing duty by overpaying the tax authority and assuming the surplus will automatically cover future installments.

In this Indirect Tax Report, we review BMLex and why there is no easy way out of having rigorous and timely tax compliance procedures.

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