Tax & Trade Blog

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GROWING GST RISK FOR COMMERCIAL BUILDERS?

PRESSURE TO GRANT GST REBATES NOW A HARBINGER OF AUDIT ISSUES TO COME

A good friend who’s a lawyer in the thick of things in the commercial building space recently prognosticated that with all of the pressure on Commercial Builders to close new home and (particularly) condo deals, they have been granting GST/HST New Housing Rebate credits that may not ultimately pass muster.

We review the latent liability risk that may be facing Commercial Builders below.

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SALE OF MIXED USE REAL PROPERTY PROBLEMATIC

ONTARIO COURT IDENTIFIES CHALLENGES OF SELLING RESIDENTIAL / COMMERCIAL PROPERTY

Most real property owners in Canada are aware that their tax obligations may differ depending on whether a property is used for residential (such as renting as a home or apartment) or for commercial purposes (such as renting for business use).

A recent Ontario Superior Court decision identifies problems that can arise from poorly drafted Agreements for Purchase and Sale (“APS”) and highlights the need to obtain proper GST/HST advice before signing such agreements.

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BC EXTENDS PST TO NEW SERVICES

PROVINCE ANNOUNCES EXPANSION OF SALES TAX TO PROFESSIONAL SERVICES

British Columbia has recently announced a further expansion of its Provincial Sales Tax (“PST”) base – a move that will not surprise those who have watched the province’s post-HST trajectory.

BC briefly participated in Canada’s Harmonized Sales Tax (“HST”) system in 2010, only to exit following a 2011 referendum and revert to its standalone PST system in April 2013. Since returning to a traditional retail sales tax model, the defining feature of PST policy has been base expansion – likely to help address recent provincial fiscal commitments and infrastructure projects.

We review the latest plan below.

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DEVELOPING BIAS DOCTRINE IN CANADA

ONTARIO COURT OF APPEAL: IF BIAS SHOWN, DECISION MUST BE OVERTURNED!

As we have written here before, proving bias tends to be an uphill battle. Because of that, this ground of complaint is rarely pursued in tax or trade appeals. That may be changing, given a recent ruling of the Ontario Court of Appeal (“ONCA”) in a trade remedy case, which confirmed that if a complainant can prove a “reasonable apprehension of bias” in the decision-making process, the entire decision must be overturned!

In this Tax Appeals Series blog, we review that decision and examine the potentially HUGE consequences that can follow.

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NO ITCS FOR CREDIT CARD LOYALTY EXPENSES - FOR BANKS

FCA SKATES FINE LINE: CONCLUDES ITCS FOR PC BANK BUT NOT FOR AMEX!

In a long running tax issue in Canada, the question has been whether Financial Institutions like banks and credit card companies are entitled to take Input Tax Credits (“ITCs”) when incurring Goods and Services Tax (“GST”) on expenses related to associated loyalty point programs. The Tax Court of Canada (“TCC”) has been fairly consistent on this question (answering it in the negative) but the Federal Court of Appeal (“FCA”) has now come to opposite conclusions in two decisions involving PC Bank and Amex points cards.

In its more recent decision in Amex, the FCA seems to have signalled that ITCs are not going to be available where the primary motivation is driving its own credit card business!