About Assessment Fees and Input Tax Credits

Unknown to most businesses and never shown on statements is the fact the Assessment/Network fees are subject to HST. These fees are paid to the networks, Visa, MasterCard, and  Amex. Interchange fees paid to the banks are not taxable as well as most other fees as they are considered banking fees.  You should check with your bookkeeper or accountant but you may be able to claim input tax credits going back four years.

There are a number of other fees that may be subject to HST but a ruling from the CRA would be needed as the Acquirers and Networks have not been very forthcoming on this. Any fees from a financial institution in Canada do not attract HST, Acquirers are owned by or are banks. However it gets fuzzy when looking at the fees, who is charging them the Acquirer or the ISO( Independent Sales Organization which is not a bank). Stay tuned we will keep you informed.

Update:

We have been describing Global Payments as an Acquirer in Canada however they are not they are an ISO  according to their web site:

 “Global Payments Direct, Inc. is a registered ISO of Wells Fargo Bank, N.A., Concord, CA.
Global Payments Direct, Inc is a registered ISO of BMO Harris Bank N.A.
© 2018 Global Payments Inc. All rights reserved.”

Note: ISO can have more than one Acquirer Affiliation.

Acquirers are financial institutions or owned by financial institutions and do the actual transaction processing and move the money around. ISOs (Independent Sales Organizations) basically resell the services of the Acquirers.

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