Start a tax preparation business in Canada: CRA EFILE registration and suitability screening, Represent a Client authorisation, certified software, client intake and record keeping, and the separate Quebec filing system.
Written October 27, 2026 · Edited November 7, 2026 · 12 min read
Applies in: across Canada
The short answer
A tax preparation business is a filing credential, a security routine, and a seasonal operation, in that order. The credential is EFILE registration with the Canada Revenue Agency, granted after suitability screening, renewed yearly, and used only with certified software. The security routine is Represent a Client authorisation, a signed Form T183 before every transmission, and six-year record keeping. The seasonal operation is appointments, intake, review, and checking, compressed into a few intense weeks each spring. There is no national tax preparer licence and no designation required to register, which is why clients check the credential, the designation, and the review routine separately, and why a preparer who skips any of the three loses the client who asks. This guide covers the process of setting up and running the business. It is not tax advice, and it does not advise any client on any return.
Step 1: Decide the client base and the services before you register
The client base decides the software, the training, and the season:
Individual returns: T1 returns for employees, families, and retirees, with slips, credits, and deductions. The highest volume, the shortest appointments, and the sharpest seasonal peak. The work is intake, data entry, review, and filing, repeated at scale.
Small-business returns: sole proprietors, partnerships, and corporations, with business income, expenses, payroll, and GST/HST accounts. Fewer clients, longer engagements, year-round work, and a need for bookkeeping and payroll knowledge alongside return preparation.
Specialist work: rental income, capital gains, cross-border filers, or deceased estates. Each specialty needs its own training and its own review checklist, and none should be offered on the strength of a general course alone.
Start with one client base and one service level. A preparer who advertises every return type in the first season takes on the hardest files with the least experience, and the hardest files are the ones that generate the reassessments. Add specialties only after the core season runs cleanly.
Step 2: Register for EFILE, get a RepID, and pass suitability screening
EFILE registration is the gate to electronic filing, and it takes time:
Apply online: complete the EFILE Registration Online form. It is a one-time application, with yearly renewal required, and there is no fee for processing the application. Up to fifteen applicants can be entered on one registration, and each applicant needs a RepID, so register for Represent a Client first if you do not have one. Employees who prepare returns in the course of their employment should not be listed as applicants unless they meet the definition of an EFILE applicant.
Suitability screening: the CRA conducts suitability screening every year before applicants are permitted to file electronically on behalf of clients. Screening checks matters such as convictions or penalties under the Income Tax Act or the Excise Tax Act, failure to file or to pay, collect, or remit taxes, failure to keep adequate books and records, misrepresentations on the application, and prior rejection or suspension from EFILE. Applicants who fail a criterion may still be allowed to file if the CRA determines the failure does not affect the application, for example where it was isolated, minor, or many years earlier. A denied applicant receives a letter with the reasons and has a right to an administrative review.
Timing: although an EFILE number and password are issued as soon as the application is accepted, processing may take up to 30 business days, and while screening is under way the applicant is limited to EFILE account maintenance activities only. Apply before December 31 to allow time for review before the filing season starts, and renew as early as possible each year.
Certified software: electronic filing of T1 returns requires a certified software product, verified and tested each year for compatibility with EFILE and for legislative changes. Choose the software before the season, test it with the current EFILE credentials, and confirm it supports every return type you advertise.
Access to EFILE is limited solely to electronic filing of returns of income. Any other use is prohibited. Individuals and businesses who apply intending to file a minimal number of returns, or no returns, are not considered to be providing tax preparation services and will be denied access.
Step 3: Set up security, confidentiality, and the office routine
Client tax information is confidential, and the security routine is part of the service:
Credentials: use only the EFILE number and password assigned to you, keep them confidential, and never share them with staff, a software vendor, or another preparer. Update the tax preparation software with a newly assigned password when the CRA issues one on renewal, and confirm the update before the first transmission of the season.
Client information: stay up to date on security best practices, take proper care to protect the confidentiality of taxpayer information, notify the CRA immediately of any loss, suspected loss, or unauthorised disclosure of client information obtained through electronic filing, and dispose of documents properly to protect client confidentiality. Store client files encrypted, limit access to the people working on the file, and never email unencrypted tax documents.
Office routine: a secure intake area, a locked file store for paper, and a rule that no client file leaves the office on a personal device. The security routine is written down, every person who touches a file is trained on it, and a breach is reported rather than hidden.
Step 4: Register the business and set up tax accounts
The paperwork is the same as for any Canadian service business:
Structure: most preparers start as sole proprietorships and incorporate later, when revenue and liability justify it. If you trade under a name other than your own legal name, register that name provincially.
Ontario: registering a sole proprietorship under a business name costs $60 through the Ontario Business Registry and lasts five years. Operating under your own name does not require registration.
British Columbia: request name approval first ($30), then register the sole proprietorship ($40) using the name request number within 56 days, or the approval lapses.
CRA business number: free, and needed for payroll, import, and GST/HST accounts. Register for GST/HST once taxable supplies exceed $30,000 over four consecutive calendar quarters, or voluntarily before that. Tax preparation services are taxable supplies, so service revenue counts toward the threshold.
Professional liability insurance: talk to a commercial broker about professional liability coverage for errors in return preparation, before the first client file. No law names a tax preparer policy, but the first reassessment caused by a preparation error is the moment the policy pays for itself.
BizPaL: the federal-provincial BizPaL service lists the permits and licences for a business by location and activity. Run it for your city before you advertise.
Step 5: Build intake, authorisation, and review routines
The routines are what keep a seasonal business accurate at volume:
Intake: every client brings slips, receipts, the last notice of assessment, and identification, and the intake form records the client's contact details, direct deposit information, and any authorisation already in place. Check that the name, address, and direct deposit details on the return match the client's instructions, and record any missing slip or receipt before preparation starts, not after the return is drafted.
Authorisation: set up Represent a Client access before the return is needed, at the level the work requires. Level 1 lets the CRA disclose information to the representative. Level 2 lets the CRA disclose information and accept changes, such as adjustments to income, deductions, and non-refundable tax credits, and is required to change a return on a client's behalf and to submit documents online for a client. The client authorises the representative in their own CRA account, or confirms the representative's request, and may set an expiry date. The authorisation stays in effect until the client cancels it if no expiry date is entered.
The T183: the client completes and signs Form T183 before the return is transmitted, signing Part F, the declaration and authorisation. The filer keeps a copy for six years, the client keeps a copy, and the form is not sent to the CRA unless the CRA asks for it. For a corporation, the authorised signing officer completes and signs Form T183CORP before transmission, with the same six-year retention. For a deceased person's return, Part F is signed by the legal representative, who must give the filer a copy of the death certificate, and a person signing under a power of attorney must give a copy of the power of attorney, attached to the T183 and kept for six years.
Review: every return is reviewed with the client before filing, the client reads the return and the T183 before signing, and the filer informs the client in writing of any changes to refunds or balances owing, and of any delays in transmission or acceptance. Correct rejected records and transmit again, and tell the client what changed. A second person checks every return the preparer did not prepare alone where the volume allows it, and the checker is named on the file.
Quebec files: for a Quebec client, complete the federal and the Quebec returns, use NetFile Quebec for the provincial filing, and hold the signed TP-1000.TE-V authorisation, kept by both parties for six years. Do not file a Quebec return on a federal EFILE credential alone.
Step 6: Open for the filing season on a capacity plan
A tax business is won in the first two weeks of the season and lost in the same place:
Capacity: set the appointment count per day from the review time, not the preparation time, because review and client conversation are the bottleneck. Book appointments in advance, confirm them the day before, and hold a daily slot for walk-ins and corrections rather than letting them displace booked clients.
Turnaround: quote a turnaround time in writing at intake, and meet it. A return promised in three days and delivered in ten loses the client for every future season, and a return rushed to meet a promise nobody checked loses the client to a reassessment.
Season end: after the filing deadline, complete the returns still in progress, confirm every transmission was accepted, file the T183 copies, and close the season with a review of every rejected record, every correction, and every client complaint. The season review is where the next season's checklist comes from.
Year-round work: small-business clients need payroll, GST/HST, and bookkeeping through the year, and individual clients return with notices of assessment, reassessments, and questions. Year-round work steadies the revenue between seasons, and it is sold on the strength of the season's accuracy, not on a discount.
What not to do
Do not transmit a return without the signed Form T183, and do not backdate or pre-sign an authorisation form.
Do not ask a client for their CRA sign-in password, and do not use another person's EFILE number and password.
Do not file from outside Canada, and do not use software the CRA has not certified as compatible with EFILE.
Do not guarantee a refund amount before the return is prepared, and do not promise an outcome for a reassessment or an objection.
Do not give tax advice beyond the preparation of the return where the client needs advice: refer planning, dispute, and complex questions to a qualified professional, and say so plainly.
Do not keep client records only on paper in an unlocked office, and do not keep the T183 copies for less than six years.
Do not advertise a designation you do not hold, and do not describe EFILE registration as a licence.
Do not take on a return type, a province, or a specialty without the training and the review checklist for it, and do not file a Quebec return on a federal credential alone.
Starting a tax preparation business in Canada, in six steps
1
Decide the client base and the servicesIndividual returns, small-business returns, or both. The choice decides the software, the EFILE registration, and the training you need before the first filing season.
2
Register for EFILE and get a RepIDApply online for EFILE, register for Represent a Client to get a representative identifier, and allow up to 30 business days for suitability screening. There is no fee for the EFILE application.
3
Set up certified software and securityUse software certified by the CRA as compatible with EFILE, keep the EFILE number and password confidential, and protect client information from the first file onward.
4
Register the business and set up tax accountsRegister the business name provincially, get a Canada Revenue Agency business number, and register for GST/HST once taxable supplies pass $30,000, or voluntarily before that.
5
Build intake, authorisation, and review routinesEvery client signs Form T183 before the return is transmitted, authorisation goes through Represent a Client at level 1 or level 2, and every return is reviewed with the client before filing.
6
Open for the filing season on a capacity planAppointments, turnaround times, and a checker for every return. A tax business is a seasonal business, and the season is won or lost in the first two weeks.
Official figures used in this guide
CRA EFILE application processing fee
No fee
EFILE suitability screening, new application
Up to 30 business days
Ontario sole proprietorship registration
$60, five years
BC name request plus registration
$30 plus $40
Questions people ask
Do I need a licence or designation to prepare tax returns in Canada?
No single national licence is required to prepare tax returns, and no designation is required to register for EFILE. Any firm, organisation, or individual providing tax preparation services can apply for EFILE if they meet the requirements and pass suitability screening. That is a filing credential, not a professional designation: a Chartered Professional Accountant may or may not file electronically, and an EFILE preparer may or may not be a Chartered Professional Accountant. What clients check separately is the designation, the provincial CPA directory where a CPA title is claimed, and the CRA tax preparer directory for EFILE status. Never claim a designation you do not hold, and never describe EFILE registration as a professional licence.
How do I register for EFILE, and how long does it take?
Complete the [EFILE Registration Online form](https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/efile-electronic-filers/apply-efile.html) on the Canada Revenue Agency site. It is a one-time application, with yearly renewal required for continued participation, and there is no fee for processing the application. Although an EFILE number and password are issued as soon as you apply, the application may take up to 30 business days to process, because the CRA must complete suitability screening of all new and existing applicants, and while screening is under way you are limited to EFILE account maintenance activities only. The CRA encourages applicants to file before December 31 to allow time for review before the filing season starts. Electronic filing of T1 returns requires a certified software product.
How does a tax preparer get access to a client's CRA account?
Through Represent a Client, with the client's authorisation. The client authorises the representative in their own CRA account, or confirms an authorisation request the representative sends, and the representative needs a representative identifier, or RepID, from Represent a Client. Level 1 authorisation lets the CRA disclose information to the representative, such as information on the tax return, adjustments, RRSP information, accounting information, and benefits and credits. Level 2 lets the CRA disclose that information and accept changes from the representative, such as adjustments to income, deductions, and non-refundable tax credits. Entering an expiry date is optional: with no date entered, the authorisation stays in effect until the client cancels it. Never ask a client for their CRA sign-in password: authorisation goes through Represent a Client, not through shared credentials.
What must a client sign before a return is filed electronically?
[Form T183](https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t183/t183-25e.pdf), Information Return for Electronic Filing of an Individual's Income Tax and Benefit Return. The client must complete and sign Form T183 before the return is transmitted, and the form is signed in Part F, the declaration and authorisation. The electronic filer keeps a copy of the signed information return for six years and may be asked to provide proof of the signed return during the CRA monitoring process, and the client keeps a copy as well. The return must be prepared in and filed from Canada, with software certified by the CRA as compatible with EFILE, and only the EFILE number and password assigned to the filer may be used. Do not transmit a return without the signed T183 in hand.
How long must tax preparation records be kept?
Six years. The electronic filer must keep a copy of the signed Form T183 for at least six years following the date the return was filed, and the client must keep all records used to prepare the return for six years and provide them to the CRA on request. For a corporation, the signed [Form T183CORP](https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-businesses/corporation-internet-filing/t183corp-information-return-corporations-filing-electronically.html) must be kept for at least six years following the date the return was filed, with the transmitter keeping the signed original and the client keeping a copy. In Quebec, the client and the preparer must each keep a copy of the signed [TP-1000.TE-V authorisation form](https://www.revenuquebec.ca/documents/en/formulaires/tp/TP-1000.TE-V%282025-11%29.pdf) for six years from the date the return was filed. Build the retention routine into the filing system from the first return, not as a year-end cleanup.
What is different about preparing returns in Quebec?
Quebec runs a separate filing system alongside the federal one. A preparer filing a Quebec personal income tax return online uses NetFile Quebec, and must first register for My Account for professional representatives, after which Revenu Quebec sends a NetFile Quebec tax preparer number by secure email. The client authorises the preparer by completing and signing two copies of [form TP-1000.TE-V](https://www.revenuquebec.ca/documents/en/formulaires/tp/TP-1000.TE-V%282025-11%29.pdf), Online Filing of the Personal Income Tax Return by an Accredited Person, keeping one copy and giving the other to the preparer, with both copies kept for six years from the date the return was filed. A preparer working in Quebec therefore needs both the federal EFILE registration and the Quebec NetFile Quebec registration, and must file both returns, federal and provincial, for each client.