Justice John Owen of the Tax Court of Canada has rendered one of the most important and potentially far-reaching decisions in 33 years of GST. While Fiera Foods Company v. The King, 2023 TCC 140 is about some other things, the Tax Court’s keen observations about GST “Information Requirements” is its most important part: they require sufficient evidence to be obtained prior to claiming input tax credits (“ITCs”), but do not specify or require the “form” of that evidence.
Tax & Trade Blog
On September 14, 2023 the Prime Minister announced upcoming legislation to remove the Goods and Services Tax (GST) on the construction of new apartment buildings.
The announcement also called on the provinces participating in the Harmonized Sales Tax (HST), or that impose their own provincial sales tax, to match the federal government’s rebate. In a twitter post the Ontario Minister of Finance has already indicated they will “work closely with Ottawa to do the same when it comes to Ontario’s portion of the HST.”
While the government of Canada appears focused on the political hot potato that is our residential housing industry, announcing new rules for rental houses are coming, the CRA is headed in the other direction, apparently targeting residential home-owners that have recently sold their homes, on the basis that the degree to which they fixed them up prior to sale caused the homes to become “new homes” and subject to full GST/HST on their fair market value.
As we blogged about here, in late 2022, Newfoundland and Labrador introduced a tax on sugar sweetened beverages (the “SSBT”). An often-overlooked aspect of Canadian indirect and excise taxes is the ability for certain taxes to compound, so that one pays a “tax on a tax”. This issue is particularly pronounced when supplies are subject to both GST/HST and a provincial excise tax.
A recent issue of the CRA Excise and GST/HST News clarified that the GST/HST is calculated on the total value of consideration including the SSBT and serves as an example of why it is important to consider how taxes interact in practice.
An often-overlooked aspect of Canadian indirect tax is the degree to which provincial fuel and carbon tax statutes vary across the country — and the surprising and significant consequences for non-resident businesses with limited connections to Canada.
US and international petroleum traders selling fuel into Canada present a good example of the complexities in this area, and how the rules can vary substantially from province-to-province leading to unforeseen registration, licensing, and Fuel Tax collection requirements!