# TIM-05 — Pass-through costs and agency. Incurred as agent

**Flag: Stale — principle only** — The principle holds; a figure or date in it may not. Check the figure before you use it.

**Pass-through costs and agency.** Incurred **as agent**: the reimbursement is not consideration for a supply, is not taxable, and the agent claims no ITC. Incurred **as principal** and rebilled: it is part of the consideration for the agent's own supply and is fully taxable, and the agent claims the ITC. CRA closes the labelling loophole explicitly — a cost "forms part of the payment for the agent's service, even though [it] may be separately itemized and listed as a 'reimbursement' on an invoice." Three essential qualities of agency: consent of both parties, authority to affect the principal's legal position, and the principal's control. CRA also treats the bookkeeping as evidence — a true agent does not record the amount as its own expense

## Sources

- P-182R (primary): https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p-182r/agency.html
- P-209R (primary): https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p-209r/lawyers-disbursements.html

Jurisdiction: FED · Verified 2026-08-27 · Review: legislative