Whose Expense Was It

Every professional firm bills back costs it paid on a client's behalf. Search fees, filing fees, expert reports, couriers, travel, printing. Most invoices group them under one heading and apply one tax treatment to the lot, which is the first mistake.

A Note On Currency

Everything here is stated as verified in August 2026 and requires confirmation before reliance.

The principal source is GST/HST Policy Statement P-209R, Lawyers' Disbursements, dated 7 July 2004, which replaced P-209 dated 7 October 1998[1]. CRA attaches a note that although correct at the time of issue it may not have been updated to reflect any subsequent legislative changes[1]. It is more than twenty years old.

We did not obtain P-182R, Agency itself, and take its content from CRA interpretations and a judgment that quote it. We did not obtain the eight indicators of agency that P-182R is reported to contain, and do not list them.

We also did not obtain Info Sheet GI-197, referred to by commentary in this area.

Two of our commentary sources use near-identical wording and we treat them accordingly[4][5].

We describe a Federal Court of Appeal decision without stating its outcome, for reasons set out in its own section.

This is not tax advice. Whether an expense was incurred as agent is a question of fact and law on each arrangement.

Closing A Gap We Left Open

A note on why this article exists.

In our article on professional work in progress we recorded, in the limits section, that it did not address the treatment of disbursements. That was accurate and it left a gap in a series that covers professional practices in some detail.

The two subjects sit next to each other in practice. A professional firm's bill has time on it and it has costs on it, and the two are governed by entirely different analyses.

The work in progress question is about when unbilled time enters income.

The disbursement question is about whether a cost billed back is a supply at all.

Our own observation is that the second gets far less attention than the first, and produces at least as many assessments, because it is decided by administrative habit rather than by anyone's judgment. A firm's billing template applies a tax treatment to a disbursement column, and it keeps applying it.

The Question Is Not Whether It Is Taxable

The framing that resolves most of the confusion. This section is our own analysis.

Practitioners approach a disbursement by asking whether the underlying item was taxable. Court filing fees are not taxable, so no tax on the rebill. Photocopying is taxable, so tax on the rebill.

That is the wrong question, and it produces wrong answers in both directions.

The right question is whose expense it was.

If the expense was the client's own and the firm merely paid it for them, the billing back is a reimbursement. Nothing has been supplied by the firm, so there is nothing to tax.

If the expense was the firm's own, incurred to produce its service, then the billing back is part of the consideration for that service. It takes the tax status of the service, whatever the tax status of the original item was.

That second point is the one that surprises people, and CRA states it plainly: where the disbursement is not incurred as agent, tax is exigible on the reimbursement to the extent that GST/HST is exigible on the consideration for the service provided by the lawyer to the client[2].

So a tax-free item can attract tax when billed back. Not because it changed, but because what is being billed is no longer the item. It is part of a service.

The Two Outcomes

CRA's own statement of the consequence, in its own terms.

For the purposes of P-209R, the phrase incurred as agent indicates that the disbursement is generally incurred in the lawyer's capacity as agent for a particular client, and as such, no GST/HST is exigible on the subsequent reimbursement by the client[2].

The phrase not incurred as agent indicates that the disbursement is generally incurred otherwise than in that capacity, and as such, GST/HST is exigible on the subsequent reimbursement[2].

CRA explains the mechanism: when an expense is incurred as agent of a client, the disbursement billing is not consideration for a supply made by the lawyer to the client, but rather a reimbursement of a cost incurred by the lawyer as agent of the client[2].

Two observations, ours.

The reasoning is structural rather than concessionary. Agency does not exempt the amount; it means there is no supply to which tax could attach.

Which is why the analysis runs through the definition of consideration. P-209R's stated legislative reference is the definition of consideration in subsection 123(1) and subsection 153(1)[1].

A firm that understands it as a concession will look for conditions to satisfy. A firm that understands it as a question about whose transaction it was will ask the right question.

The Three Essential Qualities

The test, from the policy statement that governs it.

CRA states that determining whether a person is an agent is based on a determination of fact and an application of principles of law, and that according to P-182R there are three essential qualities of an agency relationship[3]:

Consent of both the principal and the agent.

The authority of the agent to affect the principal's legal position.

The principal's control of the agent's actions.

Commentary describing the same test frames them as the three principal factors contributing to the existence of an agency relationship under the law[6].

Two observations, ours.

These are general law concepts, not tax concepts. CRA says so: it is an application of principles of law. That means the answer comes from the retainer, the engagement letter and how the parties actually dealt with the third party, not from anything in the Excise Tax Act.

And a judgment refers to P-182R containing not only the three qualities but also eight indicators of such a relationship[7]. We did not obtain them and do not list them, and a firm doing this properly should work from the policy statement itself.

Which One The Courts Focus On

A practical shortcut, from CRA's own description of the case law.

CRA states that although each of the essential qualities is equally important in determining whether an agency relationship exists, various court decisions have focused on the authority of the agent to affect the principal's legal position, being whether it is the agent or the principal that is liable under agreements with third-party suppliers to pay the consideration owing under those agreements, as an essential feature of agency[3].

That reduces to a usable question, and this is our own formulation of it.

If the third party sued for non-payment, who would they sue?

If the answer is the client, the firm was acting as agent and the payment was the client's expense.

If the answer is the firm, the firm contracted on its own account and the cost is its own input.

Three consequences.

The account is opened in somebody's name, and that name is evidence. A firm's own account with a search provider, courier or printer points one way.

The invoice is addressed to somebody, and an invoice addressed to the firm points the same way.

And the retainer either authorises the firm to bind the client or it does not, which is the document most likely to settle it and the one least likely to have been drafted with this in mind.

The Working Examples

The practical division, as commentary describes it.

Commentary states that travel expenses, postage, telephone, couriers and photocopying are not normally incurred as agent, because they are your own expenses, and are inputs to, being part of the cost of, the services you provide[4][5].

And on the other side: paying an expense which is really the client's own expense is a payment made as agent, with the example that when a lawyer pays land transfer tax on behalf of a client who is purchasing a home, that payment is made as the client's agent[4][5].

We note that these two sources use near-identical wording and treat them as one line of commentary rather than as independent corroboration.

The organising principle is visible in the examples, and this is our own reading.

The agency items are obligations the client would have had anyway. Land transfer tax is payable by the purchaser. A registration fee is payable by the person registering. The firm is settling somebody else's liability.

The non-agency items are things the firm needed in order to do its job. Nobody owed a courier company anything until the firm decided to send a document.

That distinction also explains why the list of non-agency items looks like a list of overheads. Travel, postage, telephone and photocopying are the cost of running a professional practice, and billing them separately does not change what they are.

Paying From Trust Does Not Make It Agency

A point CRA states expressly, and one that contradicts a widespread assumption.

CRA states that for the purposes of P-209R, whether an expense is paid out of the general funds of the law firm or out of the client's funds held in trust is not a factor in determining whether GST/HST should be charged on a disbursement billing. The key factor is whether the expense was incurred by the lawyer while acting as agent of the client[2].

Three observations, ours.

The assumption CRA is displacing is intuitive. Money held in trust is the client's money, so paying an expense from it feels like the client paying it.

But the source of funds says nothing about who contracted. A firm can pay its own supplier from trust, and can pay a client's obligation from general funds.

And the practical consequence is that a firm cannot organise its way to an answer through its bank accounts. Routing payments through trust does not convert overheads into agency items.

We would add that the reverse is also worth noticing. A firm that pays a genuine client obligation from general funds, because the trust balance was short, has not thereby made it its own expense. The characterisation follows the contracting, not the cash.

The Agent Cannot Claim The Credit

The other half of the consequence, which is easy to miss.

CRA states that generally, an agent is unable to claim an ITC in respect of a purchase made in its capacity as agent of a principal[2].

That completes the symmetry, and this is our own analysis.

Under agency: no tax charged on the rebill, and no input tax credit on the purchase. The firm is a conduit.

Under non-agency: tax charged on the rebill, and an input tax credit available on the purchase where tax was paid. The firm collects and remits, and recovers what it paid.

In both cases the firm ends up in the same place. It is not out of pocket either way.

Two consequences.

The characterisation is not a planning opportunity for the firm. There is no version of this in which the firm is better off, which is worth saying because tax questions are usually framed as though the person answering them has a stake.

And it means the firm's incentive is administrative convenience rather than economics: apply one treatment to the whole disbursement column and move on. Which is exactly how the error arises.

Who Actually Bears The Decision

The point we think matters most, computed by us on a $1,000 third-party cost carrying no tax.

Treated as agent: the firm claims no credit, charges nothing on the rebill, is net nil, and the client pays $1,000.

Treated as the firm's own input: the firm charges $130 at an assumed 13 percent, remits it, is net nil, and the client pays $1,130.

The firm is out nothing either way. The client pays $130 more.

Two observations, ours.

This is an unusual structure. The party making the determination has no economic stake in it, while the party bearing the whole of it has no role in making it.

And the client almost never questions it. A disbursement line on a professional bill is one of the least scrutinised items in commercial life, and the tax treatment of it is invisible to almost every recipient.

Which means the only protection the client has is the firm getting it right for its own reasons, at a moment when the firm has no reason beyond doing the job properly. That is a real professional obligation and it is worth naming as one.

The Clients Who Cannot Get It Back

Where the error becomes a genuine cost rather than a cash flow item. This section is our own analysis.

A client that is a registrant making taxable supplies recovers the tax through an input tax credit. On our figures, net cost nil. The characterisation is administrative noise to them.

Five categories of client cannot recover it.

An individual, which describes most personal injury, family law, estate and immigration clients.

A residential landlord, whose supplies are exempt.

A medical or dental practice, addressed elsewhere in this series, whose services are largely exempt.

A child care or camp operator, also addressed in this series and also exempt.

A financial services business, likewise.

For each of them, our $130 is a permanent cost.

Two consequences.

The clients most likely to be over-charged are the ones least able to absorb it, since individuals and small exempt operators are also the least likely to query a bill.

And a firm whose client base is concentrated in those categories should treat this as a client service issue, not only a compliance one. Getting it wrong costs the client real money that a registrant client would never have noticed.

Marking It Up Destroys The Argument

A pattern visible in both of the cases we found. This section is our own analysis.

In one, the court's reasoning recorded that there were no add-ons to these disbursements, nor were they altered, and that the property ownership of the reports and certificates received rested with the client[7].

In the other, the taxpayer would only seek reimbursement by invoicing for the precise amount paid[6].

The pattern is consistent and the logic follows from the three qualities.

An agent settles somebody else's obligation and is made whole. That is what a reimbursement is.

A person who adds a margin is selling something. The margin is consideration, and consideration implies a supply.

Three practical points.

A firm that adds an administration charge to disbursements has weakened its agency position on those items, and may have created a taxable supply of the charge in any event.

A firm that rounds disbursements has the same problem in smaller form.

And a firm billing a standard per-page or per-item rate rather than actual cost is not passing through anything; it is pricing a service.

We put this as a strong indicator rather than a rule, because the sources treat it as evidence within a broader analysis rather than as a test in itself.

A Case We Will Not Overstate

A decision we obtained only in part, and are handling accordingly.

In Canada v Merchant Law Group, 2010 FCA 206, the Federal Court of Appeal considered a lawyers' disbursements assessment in which the Minister had relied on P-209R[7].

The passage we obtained records the Tax Court judge's reasoning, which referred to P-182R, recited the three essential qualities and the eight indicators, and concluded that the relationship that exists between a solicitor and his client is one of principal and agent, that all essential qualities constituting an agency relationship exist on the evidence, and that an agency relationship existed as it usually would in any case involving a lawyer and his or her clients[7].

We did not obtain the Court of Appeal's disposition of the appeal.

We are therefore not stating what the case decided, and a reader should not take the reasoning quoted above as settled law. It is the reasoning of the court below, reproduced within an appellate decision whose outcome we have not seen.

We say this because the temptation is obvious. That passage reads as strong authority for a broad proposition, that solicitor and client are ordinarily principal and agent, which would make most legal disbursements agency items.

A proposition that convenient, quoted from a judgment we have not read to its conclusion, is exactly the kind of thing that should not be relied on. Anyone whose position depends on it must read the decision.

A Case Decided The Other Way

A second decision, reported by commentary, where the taxpayer succeeded.

A tax law firm's guide describes a taxpayer that paid postage to remailers including Canada Post and USPS and did not charge tax on the recovery, arguing it was acting as an agent for its clients, and that when the taxpayer paid Canada Post or USPS, it would only seek reimbursement by invoicing for the precise amount paid[6].

CRA reassessed, viewing the payments to remailers as taxable supplies rather than as a disbursement by an agent[6].

The commentary states that the court accepted the taxpayer's position and concluded that the taxpayer was indeed an agent of its clients, the three essential elements having been satisfied, with the parties having clearly consented to an agency relationship when they contracted for mailing services[6].

We report this from commentary and did not obtain the judgment or its citation.

Two observations, ours.

It shows CRA taking the non-agency position and losing, which is a useful corrective to the assumption that the Agency's characterisation is the safe one.

And the facts are instructive because postage sits on the commentary's list of items not normally incurred as agent[4]. On this account a taxpayer nonetheless established agency for postage on its own facts, which is exactly what the policy contemplates.

The Policy Yields To Strong Evidence

A provision within P-209R that governs how the whole thing should be used.

The judgment quotes the policy as stating that generally, the Canada Revenue Agency will treat a disbursement described in this policy statement in the manner indicated, unless there is strong evidence to the contrary that it should not be so treated, and that if in a specific case strong evidence does exist that a contrary treatment should apply to a particular disbursement, then the general position taken in this policy statement will not apply to that disbursement for that specific case, with a separate analysis of the facts then required[7].

Three consequences, ours.

P-209R is a set of default characterisations, not a classification of items. It tells you how a typical transaction involving that disbursement is usually treated.

The defaults are rebuttable in both directions. An item on the not-as-agent list can be agency on strong evidence, which is what the remailer case illustrates, and an item on the agency list can fail on strong evidence.

And the threshold is strong evidence, not merely a plausible argument. A firm departing from a default needs the retainer, the contracting and the invoicing to support it.

CRA's own description confirms the design: the characterization of each disbursement is based on the application of the principles of agency to a typical transaction involving that disbursement[1]. The word typical is doing the work. Your transaction may not be typical.

This Is Not Only About Lawyers

The reach of the analysis, which CRA itself has extended.

In a 1997 interpretation addressing agency and contractor purchases on behalf of owners, CRA enclosed the then-draft of the lawyers' disbursements policy and told the enquirer that it addresses common expenses for which lawyers are reimbursed and identifies those which are generally recognized by the Department to have been incurred as agent, adding: you may find this paper useful in determining whether expenses incurred by contractors are incurred as agent[8].

So the Agency was pointing a construction enquirer at a lawyers' policy, because the underlying question is the same.

Our own list of who else faces it.

Accountants and consultants paying filing fees, search fees and third-party specialists.

Contractors buying materials and permits on an owner's behalf, which is the case CRA was addressing.

Freight forwarders and customs brokers paying duties, taxes and carrier charges.

Property managers paying trades, utilities and municipal charges for owners.

Engineers and architects paying permit and approval fees.

Recruiters and agencies paying advertising and check providers.

In each, the same question decides it: was the firm settling its own obligation or somebody else's.

What The Characterisation Is Worth

The magnitude, computed by us on assumed figures.

Take a practice passing through $400,000 of third-party costs a year. At an assumed 13 percent, the tax turning on the characterisation is roughly $52,000 a year.

Over four years, roughly $208,000.

Two cautions. The rate is assumed and varies by province, and we did not research penalties or interest, which would be additional.

Our own observation is about which direction the error runs.

A firm that under-charged, having treated items as agency where CRA disagrees, faces an assessment for tax it never collected from clients. As this publication has noted in other sales tax contexts, that money is gone. The clients were billed years ago and the firm cannot realistically go back.

A firm that over-charged has collected and remitted tax that was not due, and its clients have overpaid by the same amount.

Both are real. Only one of them generates an assessment, which is the subject of the next section.

Two Errors, Only One Of Them Visible

An asymmetry in how the two failures come to light. This section is our own analysis.

Under-charging is found by CRA. It is the error the audit programme exists to find, it produces an assessment, and the firm hears about it.

Over-charging is found by nobody. CRA has no reason to look for it, since the tax was remitted. The client, if a registrant, recovered it and never noticed. The client, if not a registrant, paid it and had no way to know it was not due.

Three consequences.

The feedback loop only runs one way, which means a firm's practice drifts toward charging tax on everything. That is the safe choice from the firm's own perspective and it is not a correct one.

The cost of over-charging falls entirely outside the firm, on exactly the clients identified above who cannot recover it.

And a firm reviewing this properly should expect to find errors in both directions in its own billing, because the two lists genuinely cut across the categories a billing system uses.

We would put the professional point directly. Charging tax that is not due is not a conservative position. It is a wrong answer that happens to be safe for the person giving it.

What The Auditor Actually Examines

The enquiry in practice. This section is our own analysis.

The disbursement column on client bills, and whether a single treatment was applied across items of different character.

Supplier invoices, and specifically whose name they are addressed to.

Accounts with third-party providers, and in whose name they are held.

The retainer or engagement letter, for authority to bind the client.

Whether amounts billed match amounts paid, since markups and rounding cut against agency.

Administration or handling charges applied to disbursements.

Input tax credits claimed on items also treated as agency disbursements, which is internally inconsistent.

That last item deserves emphasis. A firm claiming a credit on a purchase while treating the rebill as a tax-free reimbursement has taken both benefits at once, and the inconsistency is visible from its own records.

What Records Survive

A written characterisation of each recurring disbursement type, with the reasoning, reviewed periodically.

Retainers and engagement letters that state expressly where the firm acts as agent.

Supplier invoices as addressed, retained rather than summarised into a ledger line.

Evidence of whose account was used with each third-party provider.

Reconciliation of amounts billed to amounts paid, item by item, for anything treated as agency.

The billing system configuration, showing which disbursement codes carry tax and when that was set.

Any ruling or advice obtained on a specific disbursement type.

What To Do

Ask whose expense it was, not whether it was taxable. The tax status of the original item does not decide the tax status of the rebill.

Test it by asking who the third party would sue. CRA notes courts focus on which party is liable under the agreement with the supplier.

Do not rely on the trust account. CRA states expressly that whether the payment came from trust or general funds is not a factor.

Characterise item by item, not column by column. The two lists cut across the categories most billing systems use.

Bill agency items at exactly what you paid. Markups, rounding and administration charges all cut against agency.

Put it in the retainer. The authority to bind the client is the element courts focus on, and the retainer is where it lives.

Check whose name is on the account and the invoice. That is the evidence an auditor will start from.

Do not claim a credit and treat the rebill as a reimbursement. Taking both is inconsistent and visible.

Remember who pays for the error. The firm is out nothing either way; the client bears it, and cannot recover it if exempt or an individual.

Read P-209R and P-182R rather than this article. P-209R is over twenty years old, carries CRA's own caution about subsequent legislative changes, and sets defaults that yield to strong evidence in either direction.

The Limits Of This Analysis

Several caveats matter. This is not tax advice; whether an expense was incurred as agent is a question of fact and law on each arrangement. Everything is stated as verified in August 2026 and requires confirmation. P-209R dates from July 2004 and carries CRA's note that it may not have been updated to reflect subsequent legislative changes. We did not obtain P-182R itself and take its content from interpretations and a judgment quoting it; we did not obtain the eight indicators it is reported to contain and do not list them. We did not obtain Info Sheet GI-197. Two of our commentary sources use near-identical wording and are treated as one line of commentary. We did not obtain the Federal Court of Appeal's disposition in Merchant Law Group, describe only the reasoning of the court below as reproduced in that decision, and expressly decline to state what the case decided or to treat the quoted reasoning as settled law. The remailer case is reported from a law firm's commentary and we did not obtain the judgment or its citation. We did not research penalties or interest and state none. We did not address the treatment of disbursements for income tax purposes, provincial variation outside the GST/HST rate, the position where a firm is not a registrant, or the interaction with the Quebec Sales Tax. All arithmetic is our own, uses an assumed 13 percent rate and hypothetical volumes, and is illustrative only. The framing of the question as whose expense it was, the who-would-be-sued test, the analysis of who bears the decision, the markup discussion and the two-errors asymmetry are our own.

Related Reading

Corporate Tax Partner Time Has No Cost The other half of a professional bill, and the article whose limits section flagged this gap. Sales Tax Arranging For, Or Merely Assisting Another question about what an intermediary is actually supplying, with the same kind of consequence. Sales Tax Recovering Input Tax Credits Why the client's own status decides whether an over-charged disbursement costs them anything.

Frequently Asked Questions

Do we charge GST/HST on disbursements?

It depends whether the expense was incurred as agent of the client. CRA states that where it was, the billing is a reimbursement rather than consideration for a supply and no tax is exigible. Where it was not, tax is exigible on the reimbursement to the extent it applies to the firm's own service.

The filing fee had no tax on it. Why would we charge tax on it?

Because if the expense was your own rather than the client's, what you are billing is not the fee. It is part of the consideration for your service, and it takes that service's tax status. The tax status of the original item does not carry through.

We pay it from the client's trust funds. Doesn't that make it theirs?

No. CRA states expressly that whether an expense is paid from the firm's general funds or from client funds held in trust is not a factor. The key factor is whether the expense was incurred while acting as agent, which is about who contracted with the third party.

What is the quickest practical test?

Ask who the third party would sue for non-payment. CRA notes that courts have focused on which party is liable under the agreement with the supplier as an essential feature of agency. Whose name is on the account and whose name is on the invoice are the evidence.

Can we add a small administration charge to disbursements?

You can, and it weakens any agency position on those items. Both cases we found record the amounts being passed through exactly, with one noting there were no add-ons and the other that the taxpayer invoiced the precise amount paid. An agent is made whole; a person taking a margin is selling something.

Is it safer just to charge tax on everything?

Safer for the firm, which is not the same as correct. Over-charging is never detected: CRA has no reason to look, registrant clients recover it, and everyone else has no way to know. The cost falls on individuals and exempt clients who cannot claim it back.

References

1. Canada Revenue Agency. GST/HST Policy Statement P-209R, Lawyers' Disbursements, date of issue 7 July 2004, replacing P-209 dated 7 October 1998, on the policy statement addressing how common lawyers' disbursements are characterized for GST/HST purposes; on its legislative reference being the definition of consideration in subsection 123(1) and subsection 153(1) of the Excise Tax Act; on GST/HST being exigible on the subsequent reimbursement by the client to the extent that it is exigible on the consideration for the service provided by the lawyer; on the characterization of each disbursement being based on the application of the principles of agency to a typical transaction involving that disbursement; and on Policy Statement P-182R, Agency, having been used as the basis for that analysis. Note: a CRA policy statement over twenty years old, carrying CRA's note that although correct at the time of issue it may not have been updated to reflect subsequent legislative changes. canada.ca
2. Canada Revenue Agency GST/HST Interpretation 112500, 26 July 2010, Lawyers' Disbursements, as reproduced by a tax publication service, on the phrase incurred as agent indicating a disbursement generally incurred in a lawyer's capacity as agent for a particular client, so that no GST/HST is exigible on the subsequent reimbursement; on the phrase not incurred as agent indicating a disbursement incurred otherwise, so that GST/HST is exigible on the subsequent reimbursement to the extent it is exigible on the consideration for the lawyer's service; on CRA's policy for determining whether an agency relationship exists being expressed in P-182R; on an expense incurred as agent meaning the disbursement billing is not consideration for a supply made by the lawyer but a reimbursement of a cost incurred as agent; on whether an expense is paid out of the general funds of the law firm or out of client funds held in trust not being a factor, the key factor being whether the expense was incurred while acting as agent; and on an agent generally being unable to claim an input tax credit in respect of a purchase made in its capacity as agent of a principal. Note: an interpretation given to another taxpayer, accessed through a secondary reproduction. taxinterpretations.com
3. Canada Revenue Agency GST/HST Interpretation 117000, 17 November 2010, Lawyers' Disbursements for Medical Reports and Clinical Records, as reproduced by a tax publication service, on determining whether a person is an agent being based on a determination of fact and an application of principles of law; on P-182R setting out three essential qualities of an agency relationship, being consent of both the principal and the agent, the authority of the agent to affect the principal's legal position, and the principal's control of the agent's actions; on each essential quality being equally important while various court decisions have focused on the authority of the agent to affect the principal's legal position, being whether it is the agent or the principal that is liable under agreements with third-party suppliers to pay the consideration owing; and on a lawyer making a taxable supply of legal services charging and accounting for GST/HST on the disbursement billing where the disbursement is not incurred as agent. Note: an interpretation given to another taxpayer, accessed through a secondary reproduction. taxinterpretations.com
4. Marcil Lavallée. Charging GST or HST on Disbursements, on the need to determine first whether a disbursement was incurred as agent of the client before issuing an invoice; on CRA having published Policies P-209R and P-182R and Info Sheet GI-197 to assist; on travel expenses, postage, telephone, couriers and photocopying not normally being incurred as agent, being the firm's own expenses and inputs to the services it provides; and on paying an expense which is really the client's own expense being a payment made as agent, with the example of a lawyer paying land transfer tax on behalf of a client purchasing a home. Note: an accounting firm bulletin; its wording is near-identical to reference 5 and we treat the two as a single line of commentary. We did not obtain Info Sheet GI-197. marcil-lavallee.ca
5. Cadesky Tax. GST on Disbursements, cited for the same statements regarding the need to determine whether a disbursement was incurred as agent, the CRA policies assisting that determination, the treatment of travel, postage, telephone, couriers and photocopying as the firm's own expenses, and the land transfer tax example. Note: wording near-identical to reference 4; treated as the same line of commentary rather than independent corroboration. cadesky.com
6. Rotfleisch & Samulovitch PC. GST/HST and Agent Disbursements: A Canadian Tax Lawyer's Guide, on a taxpayer that did not charge GST on postage paid to remailers including Canada Post and USPS, arguing it acted as agent for its clients, and that it sought reimbursement only by invoicing for the precise amount paid; on CRA reassessing the taxpayer for unremitted GST, viewing the payments to remailers as taxable supplies rather than as a disbursement by an agent; on the court accepting the taxpayer's position and concluding it was indeed an agent of its clients, the three essential elements having been satisfied and the parties having clearly consented to an agency relationship when contracting for mailing services; and on the three principal factors contributing to the existence of an agency relationship under the law. Note: a tax law firm publication; we did not obtain the judgment described or its citation. goodservicetax.com
7. Canada v Merchant Law Group, 2010 FCA 206, as reproduced by a tax publication service, on the Tax Court judge having referred to P-182R as revised in July 2003 and noted its recitation of three essential qualities of an agency relationship and eight indicators of such a relationship; on that judge's reasoning that the relationship between a solicitor and client is one of principal and agent, that the evidence showed all essential qualities constituting an agency relationship existed, and that an agency relationship existed as it usually would in any case involving a lawyer and clients; on the evidence showing no add-ons to the disbursements nor alteration of them, and that property ownership of the reports and certificates rested with the client; on the Minister having relied on P-209R in assessing; and on P-209R stating that generally CRA will treat a disbursement described in the policy statement in the manner indicated unless there is strong evidence to the contrary, in which case the general position will not apply and a separate analysis of the facts is required. Note: accessed through a secondary reproduction. We did not obtain the Federal Court of Appeal's disposition of the appeal, describe only the reasoning of the court below as reproduced in the decision, and do not state what the case decided. taxinterpretations.com
8. Canada Revenue Agency GST/HST Interpretation HQR0000237, 5 November 1997, Agency and Contractor Purchases on Behalf of Owners, as reproduced by a tax publication service, on the then-draft Policy Paper P-209, Lawyers' Disbursements, addressing common expenses for which lawyers are reimbursed and identifying those generally recognized by the Department to have been incurred as agent; and on CRA's statement that the enquirer may find that paper useful in determining whether expenses incurred by contractors are incurred as agent. Note: a 1997 interpretation referring to a draft of a policy since replaced; we use it only to show that CRA itself applied the same reasoning outside the legal profession. taxinterpretations.com

This article is provided for general informational purposes and is not tax advice. P-209R dates from 2004 and carries CRA's own note that it may not reflect subsequent legislative changes. P-182R and Info Sheet GI-197 were not obtained. The disposition of the Federal Court of Appeal decision discussed here was not obtained, and the reasoning quoted is that of the court below. All arithmetic is the authors' own and is illustrative only.