As we have blogged about here and here, the CRA is after a whole swath of residential homeowners who are finding themselves being taxed on the sale of their new or used residential properties, after substantially renovating them.
A recent decision of the Tax Court of Canada (“TCC”) in Bryan v. The King, 2024 TCC 108 highlights the problems that homeowners face when going into these ventures with possible “dual motivations”.
As we have blogged here and here, dealing with and appealing Director’s Liability Assessments for GST/HST purposes or source withholding purposes on the Income Tax side is generally an uphill battle.
The Tax Court’s recent decision in Donaldson v. The King (2022 TCC 159) underscores that a corporation dealing with business down-turns by holding off on paying the CRA its required remittances is a losing strategy!
Since the GST was first implemented in 1991, a continual source of misconception has been that the GST represents a single tax. In fact, there are potentially four different applications of the GST – i.e., reflected in Divisions II through IV.1 of the Excise Tax Act (“ETA”). When combined with the provincial HST component, further permutations can occur.
A major source of work (because of mistakes made by Canadian residents and non-residents alike) has been the application of Divisions II and III of the ETA, which are reviewed here, and which can quite counterintuitively result in the application of both a 5% GST and up-to a 15% GST/HST on one single supply of goods. Effectively, tax applying twice on a single transaction!
As we wrote in a previous blog post, the federal government amended subsections 256.2(3.1) and (3.2) of the Excise Tax Act (the “ETA”) to introduce an enhanced GST/HST residential rental property rebate applicable to new purpose-built rentals (the “Enhanced Rebate”), which took effect on September 14, 2023.
On July 17, 2024, the Real Property (GST/HST) Regulations (the “Regulations”) were published in the Canada Gazette, providing guidance on the implementation of the Enhanced Rebate, including the prescribed conditions and definitions of eligible properties.
Bill C-69, which received Royal Assent on June 20, 2024, contains various amendments to implement the federal government’s 2024 Budget. In this blog, we discuss a small but important amendment: supplies of certain face masks, respirators and face shields are no longer classified as zero-rated supplies!
Background – Zero-Rated Supplies
Section 165 of the Excise Tax Act (the “ETA”) generally imposes the GST/HST on recipients of taxable supplies made in Canada. Zero-rated supplies are a subset of taxable supplies which are taxed at the rate of 0%. Common examples of zero-rated supplies include basic groceries, prescription medications, and some medical devices.
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