To ensure we are fully compliant with Canadian tax law, we consulted directly with the Canada Revenue Agency (CRA). In 2021, the CRA provided us with a ruling that requires Ignition to charge tax on these fees.
The CRA determined that our service is more than a typical simple, tax-exempt "financial service". They view Ignition not as a simple payment gateway, but as a comprehensive, integrated service where payment is one component of a larger automated system.
Our fees cover a range of features that go beyond a simple transaction, including:
Automated payment collection and disbursement to your bank account.
Automatic reconciliation of payments against invoices.
Updating proposal and engagement records within Ignition.
Providing your clients with a secure payment portal and retry options.
Because these features create a single, taxable service, the CRA requires us to charge sales tax on the entire fee for that service. This is a direct result of our compliance with their ruling.
If you have any questions, feel free to reach out to our Support team at help@ignitionapp.com.