Section 156 of the Excise Tax Act (the "ETA") provides GST/HST relief in the context of certain supplies between closely related corporations and partnerships, and is amongst the most important provisions in the GST/HST legislation. Recently enacted changes have created quite the buzz around this election, as among other things, it now needs to be filed with the CRA, and that filing needs to be done in early 2015 for it to be effective for 2015 supplies. Here are some helpful details.
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With the New Year approaching, GST/HST registrants should be aware of a number of GST/HST compliance requirements for 2015, the more notable of which include as follows.
In a recently released GST/HST ruling, CRA seems to place a high bar on the exempt treatment of administrative services acquired by an Insurance Company in operating its insurance business. In RITS 154220 (Application of GST/HST to Insurance-related Administrative Services), the CRA effectively takes the view that virtually all administrative services acquired by an insurer are viewed by CRA as excluded from the financial services exemption, and therefore taxable for GST/HST purposes.
The Ontario Ministry of Finance has threatened to turn the Ontario cigar industry upside down, by beginning to assess vendors selling cigars and other non-cigarette tobacco to status indians on federal indian reserves, for Ontario provincial tobacco tax (PTT). Previously most industry insiders would have assumed - just from Ontario's acquiescence to wide-spread industry practice of exempting all sales of non-cigarette tobacco sold to Indians that sales of cigars, pipe tobacco and chewing tobacco to status Indians on federal Indian reserves was exempt of PTT.
Non-residents carrying on business in Canada must be cognizant of the potential to be involuntary registered for the GST/HST.
Subsections 241(1.3) to (1.5) of the ETA (which came into effect in June 2014) empower the CRA to unilaterally register a person who has not registered for GST/HST but, in the CRA’s view, is required to do so. The budget states that these amendments will strengthen GST/HST registration compliance and help the CRA to combat the underground economy.