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To account for joint marketing agreements in Canada, start with one question: does anyone share control, or does each side just pay its own bills and split the sales? The answer decides which accounting rules apply, and most everyday co-marketing deals turn out to be plain contracts, not joint ventures.
Is your deal a joint arrangement at all?
The international standard on joint arrangements (IFRS 11) defines joint control as the contractually agreed sharing of control, where decisions about the activities that matter need everyone’s unanimous consent. If one partner can decide alone, you don’t have joint control, and the arrangement is not a joint venture in the accounting sense.
Think of two companies that run a shared ad campaign and each pay their own suppliers. Nobody is running a separate business. Each company books its own costs and its own sales, and the agreement mostly matters for what you disclose. A shared fund with a shared bank account and a shared board is another animal.
When there is joint control, the same standard sorts the deal in two. If you hold rights to the assets and obligations for the liabilities, it’s a joint operation. If you hold rights to the net assets, it’s a joint venture. The label changes how you record your share.
Which accounting framework are you on?
Publicly accountable enterprises must use IFRS. A private company can choose IFRS or the Accounting Standards for Private Enterprises (ASPE), and most small firms take ASPE. Check your framework before you read any guidance, because a rule that applies under one may not exist under the other.
| Question | Where the answer sits |
|---|---|
| Which framework do we report under? | Publicly accountable: IFRS. Private: IFRS or ASPE, your choice |
| Is there joint control? | IFRS 11 test: unanimous consent on the relevant activities |
| Joint operation or joint venture? | Rights to assets and liabilities, or rights to net assets |
| Who accounts for GST/HST? | Each party, unless the operator and a participant make a joint venture election (form GST21) |
| Which figures start the tax return? | Your financial statements, adjusted for tax rules |
A shared campaign invoice, worked through
Say two Ontario firms agree to split a $10,000 campaign evenly, and one of them is billed. The HST calculator puts 13% on that price, which is $1,300, for a total of $11,300. Split evenly, each side carries $5,000 of cost before tax and $650 of the tax.
Whether that $650 is recoverable is a separate question. The answer turns on whose name is on the invoice, what the contract says and how each firm is registered, so we won’t guess. What you can do is write the split down before the invoice arrives. A clause that says who pays the supplier, who recharges whom, and by when, saves an argument at year end and gives your accountant a clear basis for the entries. It also helps a lot when a staff change or a new bookkeeper lands in the middle of the campaign.
Revenue is simpler. If the campaign brings in shared sales, decide in the contract who invoices the customer, and record only your own share. Then check what the deal did to your margin with the profit margin calculator, since a campaign that costs more than it earns shows up there fast.
What should the agreement spell out?
A page or two is usually enough. Cover who pays which supplier, how and when costs get recharged, who invoices customers, who owns the leads and the content, how long the deal runs, and how either side can walk away. Picture a Saskatoon bakery and a coffee roaster running a joint holiday promotion. If the contract says the roaster pays the printer and bills the bakery half within 30 days, the bookkeeper on each side knows exactly what to enter and when. Without it, the entries get argued about in January.
What the CRA cares about
The Income Tax Act doesn’t require any particular set of accounting standards to work out profit. The CRA treats financial statements prepared under IFRS as an acceptable starting point for taxable income, and it expects you to be consistent from year to year. So the books come first and the tax adjustments come after.
For sales tax, the CRA has a form for joint ventures. GST21 lets the operator and a participant elect to have the operator account for the GST/HST of the venture. It applies only to a qualifying joint venture, not to every shared marketing deal, so read up on it before you set up a shared arrangement. It changes who files what. Our GST and HST calculator and the reverse HST calculator help when you have to pull tax out of a total on a shared invoice.
Mistakes that cost time later
The most common one is booking the whole campaign cost as your own when half of it was recharged. The second is treating the deal as a joint venture because it feels like one, when nobody has joint control. A third is forgetting that a marketing spend has to be tracked separately if a partner pays part of it back.
Keep a short note on file that says why you classified the deal the way you did. Auditors and lenders ask, and you won’t remember in two years. If profit shared with a partner turns into income you pay tax on, the corporate tax calculator shows a rough result for a Canadian-controlled private corporation, though the Ontario small business rate in it is a blend and changes during 2026.
Running the deal for several years? Ask your accountant to agree the classification in year one, then leave it alone unless the contract changes.
The sources behind this page
The framework rules come from the Accounting Standards Board (Canada) as described by CPA Canada, and the joint arrangement definitions come from the IFRS Foundation’s IFRS 11. The tax points come from the Canada Revenue Agency pages on IFRS and taxable income and on form GST21. The HST figures are from our calculator at the 13% Ontario rate. We couldn’t confirm ASPE wording for joint arrangements, so check the standard itself before you rely on it. This site has no tie to the CRA or any government.
Frequently asked questions
Is a joint marketing agreement a joint venture?
Only if the parties share joint control, meaning key decisions need everyone's consent. A contract where each side pays its own costs and keeps its own sales usually isn't.
Which accounting standards do I use?
Publicly accountable enterprises use IFRS. A private company can choose IFRS or ASPE.
Who charges HST on a shared campaign?
It depends on who is billed and how the contract is written. The CRA has a joint venture election, form GST21, that puts the operator in charge of accounting for the tax.
Do I need to follow IFRS for my tax return?
The Income Tax Act sets no required standard. The CRA accepts IFRS statements as a starting point and expects consistent use.
What should the agreement say about costs?
Who pays the supplier, who recharges whom, how the split is worked out and when each party settles.
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