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Is there a form or any documentation which is provided by/to the main contract holder when "interlining" is effective?

By Philippe Brideau |

Judy asked:

A. Regarding interlining, is there a form or any documentation which is provided by/to the main contract holder when "interlining" is effective.

B. What is the back-up documentation required on file by the contract holder that is acceptable to a CRA tax auditor?

Philippe Brideau answered:

A. There are no specific documentary requirements with regards to interlining except in the case of freight which is destined for export, where the shipper must provide a declaration that the property is being shipped for export. The declaration is to be completed in prescribed manner as outlined in the Appendix to GST/HST Memorandum 28.2, Freight Transportation Services. Additional information can be found in paragraph 28 of this memorandum:

B. As a general rule, the CRA does not specify the records you need to keep. However, your records, whether in paper or electronic format, have to:

  • be reliable and complete;
  • be substantiated by supporting documents to verify the information contained in the records; and .include other documents, such as appointment books, logbooks, income tax and GST/HST returns, and certain accountants' working papers, which assist in determining your obligations and entitlements.

Records should also show an audit trail. An audit trail is composed of information required to recreate a sequence of events related to a business transaction. Records must show an audit trail from the supporting documents, whether paper or electronic, to the summarized financial accounts.

In addition, the trail may include a number of links to other associated processes and events, each of which may have its own audit trails. These include front-end systems (for example, e-commerce and point of sale), receipts, payments, stock inventories, preparation software for income tax and GST/HST returns, and email systems.

Note: Anyone carrying on more than one business has to keep separate records for each business.

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