Question

In the context of REBBA and the preference for salespersons to operate as independent contractors, which statement accurately reflects the responsibility of salespersons in terms of tax payments?

A) Salespersons are required to pay income tax and HST to the brokerage directly.
B) Salespersons are responsible for paying income tax and HST directly to the Canada Revenue Agency (CRA).
C) Salespersons are exempt from paying income tax and HST.
D) Salespersons can choose whether to pay income tax and HST to the brokerage or directly to the Canada Revenue Agency (CRA).

Answer 1

The statement that accurately reflects the responsibility of salespersons in terms of tax payments is (B) Salespersons are responsible for paying income tax and HST directly to the Canada Revenue Agency (CRA).

Step-by-step explanation:

Salespersons operating as independent contractors under REBBA are personally responsible for remitting income tax and HST directly to the Canada Revenue Agency (CRA). They are not exempt from these tax obligations. Unlike employees whose taxes may be withheld by the employer, independent contractors, including real estate salespersons, are accountable for managing their tax payments. The preference for independent contractor status in this context means that salespersons have greater control over their work but also shoulder the responsibility of handling their own tax affairs.

This involves calculating and remitting income tax based on their earnings as well as collecting and remitting HST on applicable services rendered. Ultimately, the onus is on the salespersons to ensure compliance with tax regulations by paying the amounts owed directly to the CRA.

Correct Answer: B) Salespersons are responsible for paying income tax and HST directly to the Canada Revenue Agency (CRA).