How Do I Check if a Business I'm Buying Owes Unpaid CRA Source Deductions or HST in Ontario?

There is no single CRA clearance certificate for an ordinary Ontario business sale, so you check through the seller's own authorization. CRA will discuss a business's tax accounts with your representative only if the business authorizes them. Buyers usually pair that with statements of account, a holdback from the price and an indemnity from the seller.

Unremitted payroll source deductions and collected GST/HST are deemed held in trust for the Crown ahead of security interests, with exceptions for prescribed security interests and, for GST/HST, amounts collected before bankruptcy. Whether that reaches an arm's-length buyer's assets depends on the facts, so treat it as a reason for holdbacks, not automatic liability. In a share purchase, the corporation keeps its liability and the old directors stay personally exposed. If you are a spouse, a minor or not at arm's length with the seller, you can be jointly liable up to a cap.

The size and form of a holdback is negotiated, not set by statute, though a buyer of taxable Canadian property from a non-resident with no certificate must pay 25% of the amount by which its cost exceeds the certificate limit, if any, unless it made reasonable inquiry. A lawyer or accountant can confirm what fits your deal.