Tax & Trade Blog

Canada’s “Luxury Tax” implemented under the Select Luxury Items Tax Act (“SLITA”) has been a significant development for vendors, importers and buyers of high-priced vehicles, aircraft and vessels.  As we have previously discussed here, the SLITA imposes tax obligations that require careful compliance, including registration and record keeping.

Recently, the CRA released a new guidance document clarifying how third-party rebates impact the calculation of tax owing under the SLITA.  The main message is straightforward but significant – rebates from manufacturers or other third parties do not reduce the taxable value of luxury items and do not lower the amount of tax vendors and importers must pay!

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.