The Canada Revenue Agency (CRA) recently announced that services provided by mutual fund dealers in exchange for mutual fund trailing commissions are considered taxable supplies and are therefore subject to GST/HST. The CRA will enforce this application of the GST/HST to services provided by dealers on or after July 1, 2026.

Since the QST system is similar to the GST/HST system in this regard, the same application will apply for QST purposes.

As a result of the announcement, some dealers may be required to register for the GST/HST and QST. For information about registration, see IN-202-V, Registering With Revenu Québec.

Consequently, mutual fund dealers may have to bill, collect and remit the GST/HST and QST on services provided in exchange for trailing commissions. They may also be entitled to a refund of the GST/HST and QST paid in providing the service.

To read the CRA's announcement, see GST/HST Notice 344, Application of the GST/HST to Mutual Fund Trailing Commissions.