What are Accountants’ and Bookkeepers’ Responsibilities Under Canada’s Excise Tax Act?

Nothing, not a darn thing…so can you stop reading now? DEFINITELY NOT…!

Well you say, “I’m not a Canadian CPA or Bookkeeper, so can I stop reading now?” Definitely not, most governance laws are duplicated or mirrored in commonwealth countries, so if I haven’t listed the specific Act in your country, keep reading.

The Excise Tax Act as it pertains to record-keeping has many potential opportunities for Accountants and Bookkeepers to add value to a complex problem, and by adding value, you can add compensation.

In a circular written by the Canadian Revenue Agency, (memorandum 15.2) they clearly outline the requirements to meet the standards designed in the Act. These requirements are for the taxpaying entity, corporation, or self-employed person. They specifically mention that even if the business entity outsources the record-keeping task to an accountant or bookkeeper, they are still responsible for compliance.

It’s easy to be out of compliance and not know it.

Now we have that out of the way we can address the real elephant in the room. No small business owner will take the time to read CRA Memorandum 15.2 or the Terms and Conditions that cloud accounting providers write. In fact, most small businesses come to accountants and bookkeepers to help them stay compliant, not put them in a compromised position.

When you use computerized records to process your customers’ financial information, you put them in the direct firing line of the tax agency and their specific laws on how to keep records. Here are just a few important instructions from the Memorandum.

· “Each person must ensure that its current and/or prior-period data files are, or have been, archived or backed up properly and adequately in order to meet its record-keeping obligations.”

· “Must retain all business records in an electronically readable format and the data must be capable of relating back to the supporting source documents.”