Tax treatment of convenience fees for dealers in Canada

We now offer the option for dealers to pass along credit card fees to their customers through our convenience fees feature. This gives you, the dealer, the ability to recover credit card processing costs associated with transactions on the platform.

Please note TOOLBX does not calculate tax on convenience fees. Dealers are responsible for determining and remitting the correct tax amount for transactions with convenience fees.

As a general rule of thumb, convenience fees are considered a supply of a financial service, which is an exempt supply, unless it meets the conditions for being a zero-rated supply. In either case, no tax is payable.

Dealers should ensure the legality of charging convenience fees within your jurisdiction and industry. Dealers are responsible for understanding and complying with the tax treatment of convenience fees within the Canadian sales tax framework. Consult with your accountant or tax advisor to ensure accurate tax calculations and compliance with all tax obligations.