AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A Canadian resident that buys a taxable service supplied from outside Canada must self-assess GST at 5% under section 218 of the Excise Tax Act, unless an exception applies. The main exception is for services acquired exclusively for the buyer's commercial activities, so a fully taxable GST registrant usually owes nothing, while businesses with exempt activities, such as many charities, clinics, financial firms and residential landlords, often do.
The rule in one paragraph
Division IV of the Excise Tax Act deals with "imported taxable supplies". Section 217 defines one, for services, as a taxable supply (other than a zero-rated or prescribed supply) of a service made outside Canada to a Canadian resident, with a list of exclusions. Section 218 says every recipient of an imported taxable supply pays tax at 5% on the value of the consideration. The Nigerian agency does not charge GST; you account for it yourself.
Who is caught
The most important exclusion in section 217 is a service "acquired for consumption, use or supply exclusively in the course of commercial activities" of the buyer. Commercial activities broadly means making taxable supplies. That produces a simple split:
| Your business | Likely position on a Nigerian service |
|---|---|
| GST/HST registrant making only taxable supplies (most consultancies, retailers, software firms) | Usually excluded: acquired exclusively for commercial activities, nothing to self-assess |
| Business making some exempt supplies (e.g. residential rent, many health services, financial services) | Not exclusive, so self-assessment usually applies to the whole service |
| Charity or non-profit with exempt activities | Often caught |
| Small supplier not registered for GST/HST | Its activities still count; check whether the use is exclusively commercial |
| Individual buying for personal use | Technically within section 218; rarely enforced for small amounts |
Other exclusions in section 217 cover services consumed by an individual exclusively outside Canada, services relating to real property outside Canada, services to goods outside Canada or exported promptly, transportation services and some litigation outside Canada. A Nigerian lawyer acting in a Lagos land dispute for you, for example, may fall within the real property or litigation exclusions; check the wording against the facts.
What "exclusively" means
The test is strict in the statute's wording. If even a modest share of the service is used in exempt activities, the "exclusively" condition can fail. A dental clinic that buys a website from a Lagos studio, used both for exempt dental services and some taxable product sales, is not using it exclusively in commercial activities.
Worked example
Example only. An Ontario charity runs mostly exempt programmes and buys CAD 12,000 of app development from a Lagos agency. The app is used in its exempt programmes, so the exclusion does not apply. Under section 218 it self-assesses 5%: CAD 600. A provincial component may also apply in participating (HST) provinces; we did not read that section, so check the CRA's guidance for Ontario before filing.
Compare a Toronto software company registered for GST/HST, selling only taxable subscriptions. It buys the same CAD 12,000 service for its product. Acquired exclusively for commercial activities: no self-assessment.
Services that often come from Nigeria
The rule is the same for every service, but some purchases come up again and again for Canadian businesses with Nigerian links. Apply the exclusive-use test to each:
- Software development and design: usually within section 217 unless used exclusively in taxable activities.
- Customer support or bookkeeping by a Lagos team engaged as a supplier: same test.
- Nigerian legal fees on a property matter in Nigeria: look at the real property and litigation exclusions.
- Training delivered online by a Nigerian provider to your staff in Canada: the services are consumed in Canada, so the exclusion for services consumed exclusively outside Canada does not help.
- Market research on Nigeria for a Canadian charity: likely caught, because the charity's activities are largely exempt.
If your own staff in Nigeria are employees rather than a supplier, there is no supply of a service to you at all; salaries are not imported taxable supplies.
How and when to account
Section 218 sets the liability; the timing and reporting rules are in the following sections, which we did not read in October 2026. In outline, a registrant reports the tax on its return for the period, and a non-registrant reports it separately. Check the CRA's page on imported taxable supplies for the exact line, form and deadline before your next return.
- Keep the Nigerian invoice, in its original currency, with the CAD value on the day of supply.
- Record how the service is used, so you can support the exclusive-use position or the self-assessed amount.
- Where you self-assess as a registrant, check whether you can claim an input tax credit for the part used in commercial activities.
The Nigerian side of the invoice
Your Nigerian supplier has its own VAT question. Mondaq's May 2026 review of the Nigeria Tax Act 2025 lists exported services among zero-rated supplies, so a Lagos agency billing a Canadian client may charge Nigerian VAT at 0%, though the article notes "exported service" is not defined. If a Nigerian invoice shows 7.5% VAT, ask the supplier why before you pay it; that VAT is not recoverable in Canada.
Where Pryme fits
Paying Nigerian suppliers in naira from a Pryme Business Account gives you a dated payment record, and Swap shows the rate and fee before you approve, which helps value the supply in CAD. The Finance agent can prepare a monthly list of foreign-service invoices for your GST review. See registering for GST/HST and Nigerian VAT on services to Canadian firms.
Questions people ask
Do I charge myself GST on services from Nigeria?
If you are a Canadian resident and the service is not acquired exclusively for your commercial activities, section 218 of the Excise Tax Act requires you to self-assess 5% GST.
Does a GST-registered software company self-assess?
Usually not, if it makes only taxable supplies and uses the service exclusively in those commercial activities.
Are charities caught?
Often yes, because their exempt activities mean the service is not used exclusively in commercial activities.
Should my Nigerian supplier charge VAT?
Exported services are zero-rated under the Nigeria Tax Act 2025, per a May 2026 Mondaq review, though the term is not defined. Query any 7.5% VAT on an invoice to you.
Sources
- Justice Laws: Excise Tax Act, section 217 (imported taxable supply) · accessed Oct 2026
- Justice Laws: Excise Tax Act, section 218 (tax on imported taxable supply) · accessed Oct 2026
- Mondaq: Examination of the VAT provisions under the Nigeria Tax Act 2025 (28 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.