What’s new in commodity tax across Canada?

Commodity Clips / Issue 3 / September 2015
From Indirect Tax Services
What’s new in commodity
tax across Canada?
This edition of Commodity Clips describes recent commodity tax developments with respect to:
 GST/HST
 British Columbia
 Manitoba
 Newfoundland and Labrador
 Quebec
 Saskatchewan
 Customs
It also includes:
 Let’s talk (PwC contacts)
GST/HST
Bulletins
Notices
TIB-109, Application of the GST/HST to the
Practice of Naturopathic Doctors was updated
July 2015.
Notice 289, Kwaw-kwaw-Apilt First Nation
Implements the First Nations Goods and
Services Tax was issued July 2015.
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Info Sheets
GI-067 – Basic GST/HST Guidelines for Charities was updated June 2015 and provides
information on how the GST/HST applies to many issues commonly faced by charities. It
applies only to organizations that are charities under the Excise Tax Act.
GI-068 – Basic GST/HST Guidelines for Public Institutions was updated June 2015 and
provides information on how the GST/HST applies to many issues commonly faced by
public institutions. It applies only to organizations that are public institutions under the
Excise Tax Act.
GI-171 – Phasing out of Recaptured Input Tax Credits in Ontario explains the phasing out
of the requirement for certain large businesses to recapture specified provincial input tax
credits (RITCs) in Ontario, starting July 1, 2015.
Forms
GST114, Bond for Non-Resident Person without a Permanent Business Establishment in
Canada can be completed by a registrant that meets all of the following conditions:
 is not resident in Canada and does not have a permanent business establishment in
Canada
 has applied to be, or is required to be, registered for GST/HST, and
 is required to give and to maintain security for the payment or remittance of tax, or
other amounts payable or remittable by the person under Part IX of the Excise Tax Act
GST115, GST/HST Rebate Application for Tour Packages is used by non-resident tour
operators to claim the Foreign Convention and Tour Incentive Program (FCTIP) rebate
for GST/HST paid or payable on purchases of eligible tour packages, or on short-term
and/or camping accommodation that was resold as part of an eligible tour package.
GST145, Waiver of the Limitation Period for Assessment can be used to waive the
limitation period(s) defined in subsections 298(1) and 298(2) of the Excise Tax Act
(ETA), within which the Canada Revenue Agency (CRA) may assess, reassess, or make an
additional assessment under sections 296 and 297 of the ETA.
GST146, Notice of Revocation of Waiver can be used to revoke, pursuant to
subsection 298(8) of the Excise Tax Act, a waiver previously filed in respect of the period
for assessment.
GST322, Certificate of Government Funding is completed by intermediaries who fund
non-profit organizations to certify that funds are a flow-through of government funding
under the Public Service Body Rebate (GST/HST) Regulations.
RC7245, Waiver of the Limitation Period for Assessment of a Selected Listed Financial
Institution can be used by a selected listed financial institution (SLFI) for Quebec sales
tax (QST) purposes to waive the limitation period(s) defined in the Excise Tax Act and
section 25 of Quebec's Tax Administration Act, within which the Minister may assess,
reassess, or make an additional assessment under those acts.
RC7246, Notice of Revocation of Waiver for a Selected Listed Financial Institution can be
used by a SLFI for QST purposes to revoke, pursuant to subsection 298(8) of the Excise
Tax Act and section 25.3 of Quebec's Tax Administration Act, a waiver previously filed in
respect of the period for assessment.
British Columbia
Bulletins
Bulletin MFT-CT 001, Fuel Sellers was revised to correct information about when Deputy
Collectors and Retail Dealers may apply for a refund.
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Bulletin MFT-CT 003, Coloured Fuels was revised to include the requirement that a
purchaser must provide a completed Coloured Fuel Certification to its fuel supplier in
certain circumstances to certify that the coloured fuel is being acquired for an authorized
use.
Bulletin MFT-CT 005, Tax Rates on Fuels was revised to state that sellers of coloured
fuel, marine diesel and locomotive fuel can sell the fuel at the 3¢ per litre rate only if
certain requirements are met, as well as to clarify carbon tax rates for low and high heat
value coal.
Bulletin MFT-CT 006, Self-Assessing Motor Fuel and Carbon Tax was revised to mention
the extended due date for self-assessing the motor fuel tax payable on natural gas and to
mention the penalty for the purchase or use of coloured fuel for an unauthorized purpose.
Bulletin PST 117, Motor Vehicle Dealer-Use and Manufacturer-Use Formulas was revised
to explain that the qualifying purposes for the dealer-use formula have been expanded to
include personal use of a dealer-use vehicle by a dealer, or by an officer, salesperson or
employee of the dealer, retroactive to April 1, 2013.
Bulletin PST 120, Accommodation has been revised three times since the last issue of
Commodity Clips:
 June 2015 revision – explains that when a business purchases a fixed number of
rooms for a continuous period of more than one month for their employees, the
exemption still applies even if the employees switch rooms or use different rooms
during the period
 July 2015 revision – specifies that the municipal and regional district tax (MRDT) rate
in the city of Vancouver is increasing from 2% to 3% on September 1, 2015
 September 2015 – clarifies that PST and MRDT do not apply to accommodation
provided by a religious or charitable organization:
o at a summer camp or similar place, or
o that does not have any of the following amenities: bed linen, electricity, indoor
plumbing or heat
Bulletin PST 200, PST Exemptions and Documentation Requirements was updated to
clarify that the exemption for lift chairs is not limited to lift chairs sold on prescription.
Bulletin PST 201, Children’s Clothing and Footwear was revised to expand the examples
of items that qualify for exemption and to correct information about the exemption for
materials used to make or repair clothing.
Bulletin PST 207, Medical Supplies and Equipment was updated to clarify that the
exemption for lift chairs is not limited to lift chairs sold on prescription.
Bulletin PST 310, Goods Brought into BC was revised to clarify that the Canada Border
Services Agency (CBSA) does not collect PST on motor vehicles, trailers and all-terrain
vehicles that enter British Columbia from outside Canada. Instead, PST is paid upon
registration of this property with the Insurance Corporation of British Columbia (ICBC).
The revision also clarifies how to calculate the depreciated purchase price and PST due.
Bulletin PST 314, Exemptions for First Nations was revised to update the links related to
the Nisga'a Nation treaty documents and to add a table outlining the First Nations
governments that have a treaty in effect with the federal and (BC) provincial
governments.
Bulletin PST 599, Real Property Transitional Rules was revised to remove sections related
to legislative provisions that were repealed April 1, 2015.
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Notices
Tobacco Tax Notice 2015-004, Changes to BC’s Tobacco Marking Program advises that
the federal tobacco stamping regime for packages of cigarettes and fine cut tobacco will
be adopted by British Columbia effective July 1, 2015.
Manitoba
Bulletins
RST Bulletin No. 015 – Printing, Desktop Publishing and Related Services was revised to
add educational books as an exempt publication and to add blueprints and puzzle books
as taxable publications, as well as to update the list of supplies used by printers along
with their tax status.
Newfoundland and Labrador
Notices
The provincial government released transitional rules that clarify whether the current
13% HST rate or the new 15% HST rate applies for transactions straddling January 1,
2016. These rules will be implemented in regulations under the Excise Tax Act.
Quebec
Tax News
To align with the federal government’s Notice of Ways and Means Motion dated May 28,
2015 to zero-rate feminine hygiene products for GST/HST purposes, Revenu Québec
announced on June 23, 2015 that QST will no longer apply to products marketed
exclusively for feminine hygiene purposes starting July 1, 2015. The supply of sanitary
napkins, tampons, sanitary belts, menstrual cups or other similar products will be zerorated. However, QST will continue to apply to the supply of deodorants, douches, sprays,
syringes and feminine wipes.
Bulletins
IN-522-V, Information Bulletin for Restaurateurs provides information about mandatory
billing in the restaurant sector.
Publications
IN-573-V, Inspections in Bars and Restaurants sets forth Revenu Québec's guidelines
with regard to inspection activities in the restaurant sector. It also describes the role and
responsibilities of inspectors, and the obligations of restaurant establishment operators.
IN-574-V, Subsidy Program for Operators of Bars and Resto Bars contains the relevant
information for the subsidy program. This document is intended for operators of
restaurant establishments (such as bars, restaurants, or businesses that provide catering
services). It is also intended for any person who, in an operator’s bar, at its entrance, or
near the establishment, ordinarily makes supplies or property or services under a
contract with the operator of the establishment or a person related to the operator.
IN-575-V, Mandatory Billing Information outlines how mandatory billing measures are
applied in the restaurant sector. This document is intended for operators of restaurant
establishments (such as bars, restaurants, or businesses that provide catering services). It
is also intended for any person who, in an operator’s bar, at its entrance, or near the
establishment, ordinarily makes supplies of property or services under a contract with the
operator of the establishment or a person related to the operator.
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Forms
VD-350.51.1-V, Information Return Concerning Contracts Respecting the Supply of
Property or Services in a Restaurant Establishment is intended for operators of a
restaurant establishment that are subject to the mandatory billing measures and hold a
permit authorizing the sale of alcoholic beverages served, without food, for consumption
on the premises. The operator must use the form to report information about a contract
entered into with a person that ordinarily makes supplies of property or services in the
operator's establishment (at its entrance or near the establishment). An operator can also
use the form to report changes to these contracts or to report the expiry of a contract.
VD-350.52.A-V, Information about an Establishment – Mandatory Billing in Bars and
Restaurants is to be completed by registrants that are subject to the mandatory billing
measures and are therefore required to use a sales recording module (SRM) to generate
bills.
VD-350.52.SM-V, Subsidy Application for Operators of Bars and Resto Bars is to be
completed by an operator of a bar or resto bar, or a person that ordinarily makes supplies
in such an establishment, who would like to apply for a subsidy under the “Subsidy
Program for Operators of Bars and Resto Bars.” It can also be completed to request a
review under the program.
VD-350.56.IN-V, Application for Authorization to Act as an SRM Installer is to be used by
businesses that wish to install SRMs in Québec restaurant establishments (bar, restaurant
and catering establishments).
VDZ-498-V, Return Respecting the Specific Tax on Alcoholic Beverages is to be
completed by any collection agent registered under the Act respecting the Québec sales
tax that must file a return in respect of the specific tax on alcoholic beverages supplied.
Saskatchewan
Bulletins
PST-2 – Information for Grocery and Drug Stores was revised to update the list of taxable
and exempt items, including the exemption of feminine hygiene products, such as
sanitary napkins, tampons, sanitary belts, menstrual cups or other similar products, as of
July 1, 2015.
PST-5 – General Information was revised to clarify when a business has to register for
PST and to outline Saskatchewan’s administrative position as to when a non-resident
business should register for PST.
PST-29 – Information for Auto Body Shops was revised to clarify the application of PST
to repair parts and labour (including used, remanufactured and reconditioned parts),
paint materials, shop supplies as well as inspection and diagnostic services.
PST-42 – Information for Vendors of Medical Equipment and Supplies was revised to list
sanitary napkins, belts, tampons and menstrual cups as PST-exempt and feminine
hygiene sprays, deodorants, douches, syringes and feminine wipes as taxable.
PST-43 – Information for Industrial and Construction Equipment Dealers and Suppliers
was revised to clarify the application of PST to warranties and insurance contracts, repair
parts and labour, shop supplies as well as environmental handling fees.
PST-63 – Information Regarding Sales to First Nations Individuals and Organizations
was revised to clarify the application of PST to purchases made by partnerships involving
status Indians.
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Notices
Provincial Sales Tax Exemption – Feminine Hygiene Products was issued June 24, 2015,
to announce that Saskatchewan is removing the PST from feminine hygiene products as
of July 1, 2015, following the federal government’s announcement to zero-rate (i.e. tax at
0%) these products for GST/HST. The exemption applies to sanitary napkins, tampons,
sanitary belts, menstrual cups or other similar products, but not to deodorants, douches,
sprays, syringes or feminine wipes.
Notice to Businesses Impacted by Northern Fires was issued July 13, 2015, stating
businesses directly impacted by fire activity that are unable to file their provincial tax
return(s) by the due date may submit a written request for relief from penalty and
interest charges on the return(s) affected.
Customs
Notices
Customs Notice 15-021 advises importers of an amendment to the January 1, 2015
version of the Departmental Consolidation of the Customs Tariff, which grants the
country of Burma the benefits of the Least Developed Country Tariff code 08, and the
General Preferential Tariff code 09, effective March 13, 2015.
Customs Notice 15-022 advises importers, travellers, customs brokers and service
providers that the new Aquatic Invasive Species Regulations are now in effect. The CBSA
will enforce the import prohibitions listed in the Schedule to these Regulations
Customs Notice 15-024 advises importers of an amendment to the 2015-1 version of the
Departmental Consolidation of the Customs Tariff.
Customs Notice 15-025 informs the public that with the federal government’s removal of
the GST and HST from tampons and certain other feminine hygiene products, effective
July 1, 2015, a zero-rating code in respect of these products will be entered on the Canada
Customs Coding Form (i.e. the B3 document) used to import the goods.
Customs Notice 15-026 provides a risk-based, alternative approach for clearing
commercial cargo and conveyances, in the marine mode, for certain vessels destined to
the Arctic.
Customs Notice 15-027 replaces Customs Notice 15-019 and provides new information
regarding the timeframes for when penalties may apply for failure to transmit electronic
conveyance arrival messages in the air, marine and rail modes. The purpose of this notice
is to inform carriers operating air, marine and rail conveyances that the requirement for
electronic Conveyance Arrival Certification Messages became mandatory on May 6, 2015,
under amendments to the Reporting of Imported Goods Regulations.
Customs Notice 15-028 replaces Customs Notice 15-018 and provides new information
regarding the timeframes for when penalties may apply for failure to transmit electronic
warehouse arrival notifications. This notice informs sufferance warehouse owners and
operators licensed by the CBSA that on May 6, 2015, the requirement for the electronic
notification of cargo arrival at sufferance warehouses under an amendment to the
Customs Sufferance Warehouses Regulations became mandatory as previously
communicated in Customs Notice 14-002.
Customs Notice 15-029 provides information regarding the Container Bank Program.
Customs Notice 15-030 replaces Customs Notice 15-023. This notice informs highway
and rail carriers of the CBSA’s interim policy with respect to Advance Commercial
Information requirements for:
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

empty highway and rail conveyances, and
in-transit highway and rail conveyances
Customs Notice 15-031 provides information for commercial importers, custom brokers
and software/service providers about the CBSA’s Single Window Initiative.
Memoranda
Memorandum D3-1-1, Policy Respecting the Importation and Transportation of Goods
was revised to remove references to the Post Audit Program, which ended August 1, 2014,
and to reflect new sealing requirements. The Memorandum outlines and explains general
CBSA requirements and administrative policies regarding the reporting and
transportation of goods being imported into and moving in-transit through Canada by all
modes of transport.
Memorandum D3-1-3, Commercial Importation of Intoxicating Liquors was revised to
remove references to the Post Audit Program, which ended August 1, 2014. The
Memorandum outlines the procedures to be followed for the interprovincial and
international transportation and release of intoxicating liquors.
Memorandum D3-1-5, International Commercial Transportation was revised to update
references to the Customs Tariff. The Memorandum outlines the conditions under which
foreign-based conveyances and containers used in the international commercial
transportation of passengers or goods can be temporarily imported into Canada, without
payment of duties.
Memorandum D3-1-8, Cargo – Export Movements was revised to provide additional
definitions, reflect changes to carrier code requirements and update website references.
The Memorandum outlines and explains the CBSA requirements and administrative
policies regarding the report and control of cargo exported from Canada by air, highway,
marine and rail carriers.
Memorandum D3-2-1, Air Pre-arrival and Reporting Requirements was revised to include
eManifest and in-transit processes, cancelling Memoranda D12-2-1 and D3-2-2, as well as
to remove references to the Post Audit program, which ended August 1, 2014. The
Memorandum outlines the CBSA’s procedures for the advance notification, reporting, use
and control of aircrafts in international commercial services.
Memorandum D3-4-2, Highway Pre-arrival and Reporting Requirements was revised to
include eManifest and in-transit processes as well as Carnet transportation requirements,
to update sealing requirements and to remove references to the Post Audit Carrier
Program, which ended August 1, 2014. Memoranda D12-3-1, D3-4-5 and D3-1-2 have
been cancelled as a result of these revisions. The Memorandum outlines and explains
specific CBSA requirements and procedures for reporting and control of cargo arriving in
Canada in the services of highway carriers.
Memorandum D3-5-1, Marine Pre-load/Pre-arrival and Reporting Requirements was
revised to include pre-load/pre-arrival, arrival and post arrival processes of cargo and
conveyance for goods being imported or transiting through Canada via the marine mode,
cancelling Memoranda D3-5-2 and D12-1-1. The Memorandum outlines and explains
specific CBSA requirements and procedures for reporting and controlling cargo imported
by marine carriers.
Memorandum D3-6-6, Rail Pre-arrival and Reporting Requirements was revised to
include eManifest and in-transit processes, cancelling Memoranda D12-4-1 and D3-6-7,
and to remove references to the Post Audit program, which ended August 1, 2014. The
Memorandum outlines and explains specific CBSA requirements and procedures for
reporting and controlling cargo imported into Canada by rail carriers.
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Memorandum D3-7-1, CBSA Marine Operations – Cargo Containers Used in
International Service was revised to include updated Tariff classification numbers as well
as Post Audit criteria and audit requirements, thereby cancelling Memorandum D3-1-6.
The Memorandum outlines and explains the conditions under which cargo containers
may be temporarily imported into Canada while in international service.
Memorandum D4-3-4, Duty Free Shop – Operational Responsibilities outlines the
responsibilities of licensees in the operation of a Duty Free Shop in Canada. The
Memorandum was revised to incorporate information previously contained in
Memorandum D4-3-6, Duty Free Shop – Off-site Storage dated May 7, 2009.
Memorandum D8-1-4, Administrative Procedures Related to Form E29B, Temporary
Admission Permit outlines the administrative procedures related to Form E29B,
Temporary Admission Permit, which may be used to document goods qualifying for
temporary importation into Canada. The Memorandum was updated to delete references
to the coloured sheets of Form E29B and to reflect the change in address for submitting
national standing security bonds.
Memorandum D8-2-1, Canadian Goods Abroad Program was completely revised. The
Memorandum explains the conditions for obtaining partial relief of the duties and taxes,
including GST/HST, under the Canadian Goods Abroad Program provisions contained in
sections 101 to 105 of the Customs Tariff.
Memorandum D8-2-3, Application of the Non-commercial Importations Remission
Order was revised to update the list of countries where repair or alterations can be done
under tariff item No. 9992.00.00. The Memorandum outlines the conditions under which
a remission may be granted on customs duties and excise taxes paid or payable on
non-commercial imported goods.
Memorandum D10-14-37, Determining the Composition of Uppers of Footwear explains
the administrative policy used by the CBSA to determine the composition of uppers (i.e.
the portion of footwear above the sole) in respect of footwear of Chapter 64 of the
Customs Tariff Schedule. The appendices were changed to add an explanation of
"waterproof footwear" under Heading 64.01.
Memorandum D11-8-6, Interpretation of Section 3 of the Imported Goods Records
Regulations updates the CBSA’s policy regarding the keeping of records in accordance
with paragraph 3(a.1) of the Imported Goods Records Regulations and includes new
paragraph 15 along with a consequential amendment to the Appendix.
Memorandum D19-6-1, Administration of the Explosives Act has been changed to reflect
updates to the Explosives Act and its regulations. The Memorandum outlines the
provisions concerning the importation, exportation and in transit movement of explosives.
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Let’s talk
For a deeper discussion of how these commodity tax issues might affect your business,
please contact:
Mario Seyer, Montreal
National Indirect Tax Leader
+1 (514) 205 5285
[email protected]
Audrey Diamant, Toronto
+1 (416) 687 8933
[email protected]
Jaime Seidner, Toronto
+1 (416) 687 8492
[email protected]
Eric Paton, Toronto
+1 (416) 869 2878
[email protected]
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substitute
for consultation with professional advisers.