What’s new in commodity tax across Canada?

Commodity Clips / Issue 2 / June 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
 Alberta
 British Columbia
 Manitoba
 Newfoundland and Labrador
 Quebec
 Saskatchewan
 Customs
It also includes:
 Let’s talk (PwC contacts)
GST/HST
Notice of Ways and Means Motion
The Department of Finance released a Notice of
Ways and Means Motion to amend Schedule VI
of the Excise Tax Act on May 28, 2015. The
effect of the amendment is to zero-rate the
supply of products that are marketed exclusively
for feminine hygiene purposes, including
sanitary napkins, tampons, sanitary belts and
menstrual cups.
www.pwc.com/ca/commodityclips
Notices
Notice 288, Consolidated Filing for Investment Plans that Are Selected Listed Financial
Institutions was issued April 2015.
Info Sheets
The following info sheet was released May 2015:
GI-170 – Charter Flights Supplied to Third-Party Charterers explains how GST/HST
applies to supplies of charter flights that are considered to be supplies of passenger
transportation services for GST/HST purposes, and to other related supplies.
The following info sheets have been updated:
GI-066 – How a Charity Completes its GST/HST Return was updated May 2015 and
explains how a charity that is a GST/HST registrant calculates its net tax.
GI-067 – Basic GST/HST Guidelines for Charities was updated May 2015 and provides
basic information on the application of GST/HST to issues commonly faced by charities.
Forms
The following are updated forms:
GST10 – Application or Revocation of the Authorization to File Separate GST/HST
Returns and Rebate Applications for Branches or Divisions is used by registrants who
want to file separate GST/HST returns for their branches or divisions.
GST17 – Election Concerning the Provision of a Residence or Lodging at a Remote Work
Site is used by registrants who are builders located at a remote work site to defer the
application of GST/HST on housing until the housing is either sold or leased primarily to
individuals (or their relatives) who are at the remote work site to perform their duties.
GST20 – Election for GST/HST Reporting Period is used to change the reporting period
for the GST/HST return.
GST20-1 – Notice of Revocation of an Election for GST/HST Reporting Period by a Listed
Financial Institution is used by a listed financial institution that wants to revoke a
previous election made under section 246 or 247 of the Excise Tax Act to change the
reporting period of its GST/HST return.
GST 24 – Election and Revocation of the Election to Tax Professional Memberships is
used to elect or to revoke an election to have the GST/HST apply to certain professional
memberships.
GST44 – Election Concerning the Acquisition of a Business or Part of a Business is used
by a recipient acquiring a business who wants to jointly elect with the supplier so that
GST/HST does not apply to the sale of the business.
GST60 – GST/HST Return for Acquisition of Real Property is used to report and pay the
GST/HST when you purchase taxable real property and you are:
 registered for GST/HST and the use or supply of the real property in your commercial
activities will be 50% or less, or
 not registered for GST/HST and you acquired the real property from a person who is
not resident in Canada
GST70 – Election or Revocation of an Election to Change a GST/HST Fiscal Year is used
to change a fiscal year for GST/HST purposes or to revoke a previously made election to
do so.
RC4616 – Election or Revocation of an Election for Closely Related Corporations and/or
Canadian Partnerships to Treat Certain Taxable Supplies as Having Been Made for Nil
2
www.pwc.com/ca/commodityclips
Consideration for GST/HST Purposes is used to either jointly elect to treat certain taxable
supplies between specified members as having been made for no consideration, or to
jointly revoke the election. For elections in effect before January 1, 2015, these forms
must be filed with the CRA no later than December 31, 2015. For new elections entered
into after December 31, 2014, the form must be filed with the CRA no later than the due
date for the return covering the reporting period in which the election takes effect.
Alberta
Because the Alberta government was defeated in the May 5, 2015 election, a new budget
is expected. Important changes will be on www.pwc.com/ca/taxinsights or future editions
of Commodity Clips.
British Columbia
Bulletins
The following bulletins were revised since the previous issue of Commodity Clips:
Bulletin MFT 004, Fuel Tax Refund for Persons with Disabilities was revised to clarify
that only original cash register or pump receipts that show the volume and type of fuel
purchased are accepted for the purposes of the program, as well as who must pay the tax
to be eligible for a refund.
Bulletin PST 005, Buying and Selling a Business has been completely rewritten and
replaces the version dated November 2014.
Bulletin PST 119, Restaurants and Liquor Sellers was revised to clarify the distinction on
the application of PST between improvements to real property and affixed machinery, as
well as to clarify that a buyer of a business can also obtain a clearance certificate from the
Ministry of Finance.
Bulletin PST 135, Multijurisdictional Vehicles was revised to describe new procedures
used to determine the travel ratio for a vehicle as well as to add an advisory limiting the
application of end-of-period reconciliation procedures and a requirement to obtain the
customer’s prorate number when making exempt sales of parts and related services.
Bulletin PST 210, Related Party Asset Transfers has been revised to remove the
requirement that an amalgamation be formed under Canadian legislation for an asset
transfer from a predecessor corporation to an amalgamated corporation to be nontaxable for PST.
Bulletin PST 308, PST on Vehicles was revised to clarify the following.

a gift of a vehicle does not include a vehicle received as a result of a loan takeover or a
vehicle received in exchange for other forms of consideration

for gifts to related individuals and registered charities as well as for prizes, draws and
awards, the requirement of paying tax (i.e. PST under either the Provincial Sales Tax
Act or Social Services Tax Act, the provincial portion of HST or sales tax of another
province) is only met if the person who paid the tax has not received and is not
eligible for a refund, credit or rebate of that tax, including an input tax credit, and

for gifts to registered charities, the person signing on behalf of the charity must have
signing authority
Bulletin PST 400, Refunds was revised to include refunds, made available by British
Columbia’s 2015 budget, to customers who paid additional municipal, regional and
district tax (MRDT) on accommodation because of a rate change during their stay and tp
www.pwc.com/ca/commodityclips
3
persons who paid PST on goods purchased in British Columbia that are processed into or
attached to other goods to fulfill a contract in certain circumstances.
The following bulletin was issued May 2015:
Bulletin PST 318 explains how PST applies to trusts.
Notices
Fuel Tax Notice 2015-001, Notice to Retail Dealers has been completely rewritten and
replaces the previous version dated February 2015.
Manitoba
Notices
Tobacco Tax Notice 15-01 provides the following new tax rates on tobacco effective
midnight April 30, 2015:



cigarettes – 29.5¢ each
fine cut – 28.5¢ per gram
raw leaf – 27¢ per gram
Fuel Tax Notice 15-02 states that qualifying commercial passenger flights will be eligible
for a refund of fuel tax paid on purchases of fuel in Manitoba effective July 1, 2015.
Newfoundland and Labrador
Budget 2015: Tax Adjustments
The 2015 budget included the two commodity tax measures outlined below:
Budget – HST Rate Increase
The HST rate will increase from 13% to 15%, with the provincial portion of the HST
increasing from 8% to 10%, effective January 1, 2016.
Budget –Tobacco Tax Rebate
A rebate offered to retailers of tobacco sold in the Labrador border zones was reinstated
effective May 1, 2015 at 12:01 am.
Quebec
Bulletins
ADM.4/R6, Voluntary Disclosure Program was updated May 2015. The bulletin sets out
the terms and conditions under which a person that makes a disclosure under Quebec
taxation law (such as QST) can benefit from the relief measures offered by Revenu
Québec.
Forms
CA-1-V, Table of Fuel Tax Rates in Quebec, by Region in force as of April 1, 2015.
CA-90-V, Application for a Refund of the Fuel Tax Paid by an Indian, a Band Council, a
Tribal Council or a Band-Empowered Entity is to be used by these persons to apply for a
refund of the fuel tax paid on fuel purchased for their own consumption from a fuel retail
outlet operated by a retail dealer on an Indian reserve or an Indian settlement.
CAZ-14.1.R-V, Application for a Fuel Tax Refund in Respect of Gasoline in Stock at 12:01
AM on April 1, 2015 (Retail Dealers) is intended for all retail dealers of gasoline that own
the gasoline they have in stock on April 1, 2015, and whose retail establishment is situated
in a region bordering on Ontario, New Brunswick or the United States, or in the
4
www.pwc.com/ca/commodityclips
designated region. These retail dealers must complete this form to report the gasoline
they have in stock at 12:01 a.m. on April 1, 2015, and to calculate the refund of the
amount paid to the supplier that corresponds to the difference between the new rates and
the rates in effect before April 1, 2015.
VD-224.1-V, Election Respecting the Self-Supply of a Residential Complex is for use by
any builder registered for the QST that has built a single-unit residential complex or a
residential unit held in co-ownership in order to sell it and that leases it for residential
purposes. In this situation, the builder is deemed to have made a self-supply of the
complex or unit. By using this form, the builder can elect to exclude the QST deemed
collected from its net tax for the period in which the self-supply was made and specify
when it will remit (or expects to remit) the QST in respect of the supply.
Saskatchewan
Provincial Sales Tax Rulings
The following PST rulings were updated May 2015:






23.1 – Drugs, Medicines and Appliances
35.0 – Sand and Gravel
37.10 – Joint Purchases, Status Indians and Non-Status Individuals
56.0 – Equipment Transferred into the Province
92.8 – Legal Services Provided to Indians or Indian Bands
119.0 – Desktop Publishers
Bulletins
FT-2 – Information for Border Fuel Dealers and Fuel Tax Collectors regarding the
Gasoline Competition Assistance Program was revised to reflect the updated assistance
amounts provided to fuel dealers and fuel tax collectors near the Alberta border.
PST-18 – Information for Motor Dealers and Leasing Companies was revised to list an
online database that indicates a vehicle’s PST status and damage claims history as well as
to clarify the application of PST to sales of vehicles to Status Indians, extended warranty
contracts and shop supplies.
Notices
Non-Resident Vendors – Provincial Sales Tax (PST) Registration was issued May 2015 to
advise non-resident vendors that sell or lease taxable goods to register for PST when all of
the following conditions are met:

the vendor solicits customers in Saskatchewan, either directly or through an agent, by
advertising or any other means that is targeted towards customers in the province

the vendor accepts an order to purchase or lease taxable goods that originates from a
customer location in the province

the goods are intended to be acquired by the customer for use or consumption in
Saskatchewan and not for resale, and

the vendor arranges for the goods to be delivered to the customer in Saskatchewan,
either directly or by way of common carrier
This is similar to “super-registration” rules from PST legislation in British Columbia and
Manitoba.
The Indian Residential Schools Settlement Agreement (IRSSA) Clarification Regarding
the Application of Provincial Sales Tax to Legal Fees was issued May 2015 to provide
www.pwc.com/ca/commodityclips
5
guidance to lawyers and law firms on the application of PST to legal services provided
related to IRSSA claims.
Customs
Notices
Customs Notice 15-006 provides information on how to claim the benefits of the 2015
Pan American and Parapan American Games Remission Order when importing goods
that will remain in Canada after the Games. The Order outlines the conditions under
which customs duties may be relieved on some goods imported for exclusive use in
connection with the Games. The Order also provides for full or partial relief of the GST
under certain circumstances. For the purposes of the Order, "goods" do not include
alcoholic beverages or tobacco products.
Customs Notice 15-007 provides information on how to claim the benefits of the 2015
Pan American and Parapan American Games Remission Order for temporarily imported
goods. The Order outlines the conditions under which customs duties may be relieved on
some goods imported for exclusive use in connection with the Games. The Order also
provides for full or partial relief of the GST under certain circumstances. For the purposes
of the Order, "goods" do not include alcoholic beverages or tobacco products.
Customs Notice 15-008 clarifies the business number (BN) requirements for exporters.
Customs Notice 15-011 further clarifies carrier code eligibility in the marine mode.
Customs Notice 15-012 is a follow-up notice to Customs Notice 15-004 that informs
importers and brokers that individual cheques will be issued for single adjustment
refunds after March 30, 2015.
Customs Notice 15-013 informs importers and customs brokers of changes to Transport
Canada’s Appendix G Pre-clearance Program (the Program) for the commercial
importation of new Canadian compliant vehicles. The information in this notice
supersedes customs notices 14-008 and 14-018 as well as any content from Memorandum
D19-12-1, Importation of Vehicles that pertains to the admissibility of vehicles declared
for importation via the Program.
Customs Notice 15-015 replaces Customs Notice 14-026 dated October 14, 2014. It
contains additional information and clarification concerning the posting of security
deposits.
Customs Notice 15-016 provides information on how to claim the benefits of the FIFA
Women’s World Cup Canada 2015 Remission Order when temporarily importing goods
for the 2015 FIFA Women’s World Cup. The Order specifies the conditions under which
the customs duties may be relieved on some goods imported for exclusive use in
connection with the 2015 FIFA Women’s World Cup. The Order also provides for full or
partial relief of GST and HST under certain circumstances. For the purposes of the Order,
“goods” do not include alcoholic beverages or tobacco products.
Customs Notice 15-017 provides information on how to claim the benefits of the FIFA
Women’s World Cup Canada 2015 Remission Order when importing goods that will
remain in Canada after the tournament is concluded. The Order specifies the conditions
under which the customs duties may be relieved on some goods imported for exclusive
use in connection with the 2015 FIFA Women’s World Cup. The Order also provides for
full or partial relief of GST and HST under certain circumstances. For the purposes of the
Order, “goods” do not include alcoholic beverages or tobacco products.
Customs Notice 15-018 replaces Customs Notice 14-002 (which has been cancelled) and
informs CBSA-licensed sufferance warehouse owners/operators of the requirement for
6
www.pwc.com/ca/commodityclips
the electronic notification of cargo arrival under an amendment to the Customs
Sufferance Warehouses Regulations that became mandatory on May 6, 2015. The notice
further states that after a 45 business day implementation period, non-compliant
warehouse operators may be subject to penalties starting July 10, 2015.
Customs Notice 15-019 informs carriers operating air, marine, and rail conveyances that
the requirement for electronic Conveyance Arrival Certification Messages (CACM)
became mandatory on May 6, 2015, under amendments to the Reporting of Imported
Goods Regulations.
Customs Notice 15-020 informs marine carriers that the requirement to apply for and
maintain an authorization to provide the required advance information for break-bulk
goods under the beneficial timeframe of 24 hours prior to arrival in Canada was amended
on May 6, 2015, under amendments to the Reporting of Imported Goods Regulations.
Memoranda
Memorandum D6-2-6, Refund of Duties and Taxes on Non-commercial Importations was
revised to reflect the new Government of Canada policy regarding the refund of low value
payments.
Memorandum D8-2-25, Canadian Vessels Repaired or Altered in the United States,
Mexico, Chile, Israel or Another CIFTA Beneficiary, Colombia, Costa Rica, Peru, Jordan,
Panama, Iceland, Liechtenstein, Switzerland or Norway was updated to revise the list of
countries where repairs or alterations may be done to Canadian vessels, and the vessels
would be entitled to preferential tariff treatment when they are returned to Canada.
Memorandum D10-14-51, Tariff Classification Policy: Tariff Item 9948.00.00 outlines the
CBSA’s policy as it relates to the tariff classification of articles under tariff item
9948.00.00 of the Customs Tariff.
Memorandum D10-14-64, Tariff Classification of Goods Using Bluetooth® Technology
explains the CBSA’s administrative policy for the tariff classification of these articles.
Memorandum D10-15-24, Tariff Item No. 9979.00.00 – Goods Specifically Designed to
Assist Persons with Disabilities has been revised to better reflect the CBSA’s
administration of conditional relief tariff item 9979.00.00.
Memorandum D10-17-38, Administrative Policy – Tariff Classification of Marble and
Granite Blocks and Slabs has been revised to clarify the CBSA’s policy regarding the
classification of marble and granite blocks or slabs of headings 25.15, 25.16 and 68.02.
Information has also been added related to the classification of crude or roughly trimmed
stone as compared to stone that has merely been cut, by sawing or otherwise, as well as
the classification of natural and artificial stone.
Memorandum D11-4-2 – Proof of Origin of Imported Goods was revised to include recent
amendments to the Proof of Origin of Imported Goods Regulations as well as to reflect
the implementation of the Canada-Peru Free Trade Agreement, the Canada-Colombia
Free Trade Agreement and the Canada-European Free Trade Association Free Trade
Agreement.
Memorandum D11-4-4 was updated to reflect the amendments to the General
Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations.
Memorandum D11-4-31 was issued to publish the Memorandum of Understanding
between Canada and the Republic of Korea concerning uniform regulations for the
interpretation, application and administration of Chapter Four of the Free Trade
Agreement between Canada and the Republic of Korea.
www.pwc.com/ca/commodityclips
7
Memorandum D11-5-13 describes the Canada-Honduras Free Trade Agreement rules of
origin.
Memorandum D11-8-5, Conditional Relief Tariff Items formerly entitled "End-Use
Program," has been reissued to clarify the CBSA's policy regarding the eligibility of goods
for conditional relief tariff items.
Memorandum D11-8-6, Interpretation of Section 3 of the Imported Goods Records
Regulations reflects the amendment to the Imported Goods Records Regulations, made
on April 1, 2015, that is deemed to have come into force on June 28, 2013. The
memorandum also explains the CBSA's policy regarding the keeping of records in
accordance with section 3 of the Imported Goods Records Regulations.
Memorandum D13-3-4, Place of Direct Shipment has been updated to include
information on the identification of the place of direct shipment to Canada of goods
transported through an intermediate country before they are imported to Canada.
Memorandum D13-3-5 provides guidance on the treatment of transportation costs in a
calculation of value for duty in circumstances when a Canadian importer collects its
goods at an intermediate point outside Canada and subsequently imports them into
Canada.
The D15 series memoranda have been cancelled as of May 14, 2015. A list of goods
currently subject to anti-dumping or countervailing measures pursuant to the Special
Import Measures Act is available here.
8
www.pwc.com/ca/commodityclips
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]
© 2015 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity.
Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a
www.pwc.com/ca/commodityclips
9
substitute
for consultation with professional advisers.