GST/HST

It is crucial to understand whether a real estate transaction in Canada is subject to the Goods and Services Tax (GST) and Harmonized Sales Tax (HST). For those dealing with residential complexes, certain sales may be exempt from GST/HST under specific conditions outlined in the Excise Tax Act (ETA).Canada Revenue Agency (CRA) audits targeting...

When selling a property, difficult rules and exceptions may apply. Among these rules lies Subsection 191(5) of the Excise Tax Act (ETA), which introduces an exception that can significantly impact builders of residential complexes or additions. Normally, when a builder moves into a home, they must self-assess GST/HST. This means that they take the...

Renovating a property can be an exciting endeavor, whether it’s for personal enjoyment or as an investment. However, when it comes to tax implications, particularly under the Goods and Services Tax/Harmonized Sales Tax (GST/HST) in Canada, understanding what constitutes a substantial renovation is crucial. The reason is because if you...

In recent years there has been a growing industry of purchasing vehicles in Canada, and then exporting those vehicles to other countries. The reason for this is because vehicle pricing is different from country-to-country. What costs $50,000 in Canada might retail for $150,000 in another country.  When a vehicle is purchased, GST/HST is added...

Gross Negligence Penalties are penalties meant to punish taxpayers such as for their failure to report income or in claiming false credits. Depending on whether they are GST/HST, or Income Tax related, the penalty will add 25% or 50% to any balance owing. To issue a gross negligence penalty, the Canada Revenue Agency (“CRA”) must prove that...

The Canada Revenue Agency (“CRA”) has been reviewing property purchases and sales for years. More recently, they have started GST/HST audits which accuse taxpayers of building their own homes and selling them as part of a business. They claim taxpayers are builders and not subject to any exemption from charging GST/HST on the eventual sale of the...

The Tax Court of Canada decision in A-Supreme Nursing & Home Care Services Inc. v. The King, 2023 TCC 39 (“ANHC”), involved a CRA audit of a staffing agency in the business of supplying healthcare workers, resulting in a reassessment for over $1,000,000 in GST/HST. The decision is of interest as it clarifies the scope and taxability...

In general, when a business pays for an expense (e.g., business start-up costs, rent, professional fees) they also pay GST/HST on that expense. Subsequently, they can apply for Input Tax Credits (ITC) to recover the GST/HST paid. However, upon review/audit, Canada Revenue Agency (CRA) is relatively strict concerning the information and documents...

The Proposed Residential Property Flipping Rule The Residential Property Flipping deeming rule introduced in the 2022 Federal Budget will not apply if the disposition of residential property is on account of a “life event”. Accordingly, it appears that Canada Revenue Agency (CRA) has...

Subcontractor Expenses, Denied ITCs And The GST/HST Rebate For ‘Tax Paid In Error' In Mediclean Incorporated v. The Queen, 2022 TCC 37 (CanLII), the Tax Court of Canada provides guidance for successfully claiming the “tax paid in error” GST/HST rebate and reiterates the scope...