IN THIS SECTION:
- GST/HST and Health Care Services
- GST/HST Pension Plan Rules
- GST/HST Business Information Requirement
- GST/HST on Paid Parking
- GST/HST Treatment of the Governor General
- Excise Duty Rate on Manufactured Tobacco
GST/HST and Health Care Services
Home
Care and Personal Services
Currently, an exemption from GST/HST exists
for publicly subsidized or funded homemaker services, such as cleaning,
laundering, meal preparation and child care, rendered to an individual who, due
to age, infirmity or disability, requires assistance in the home. The Budget
proposes to expand this exemption to publicly subsidized or funded personal
care services, such as bathing, feeding, assistance with dressing and taking
medications, rendered to such individuals. The expanded exemption will apply to
supplies made after Budget Day.
Reports
and Services for Non-Health Care Purposes
The Budget proposes to clarify that GST/HST
applies to reports, examinations and other services that are not performed for
the purpose of protection, maintenance or restoration of the health of a person
or palliative care, even if provided by health care professionals. Such
services would include, for example, reports prepared solely for the purpose of
determining liability in court proceedings.
GST/HST Pension Plan Rules
The Budget proposes two measures to
simplify employer compliance with GST/HST pension plan rules.
Election
Not to Account for GST/HST on Taxable Supplies.
An employer participating in a registered
pension plan will be permitted to jointly elect with a pension entity of that
pension plan to treat an actual taxable supply by the employer to the pension
entity as being for no consideration where the employer accounts for and remits
tax on the deemed taxable supply. The election remains in effect until it is
jointly revoked by the employer and the pension entity effective from the
beginning of a fiscal year for the employer. Additionally, the Minister has
discretion to cancel the election in certain circumstances. This measure
applies to supplies made after Budget Day.
Relief
from Accounting for GST/HST on Deemed Taxable Supplies
Under the existing GST/HST rules, an
employer that participates in a registered pension plan is required to account
for and remit GST/HST under the deemed taxable supply rules in respect of every
acquisition, use or consumption of the employer’s resources in pension
activities, even where the employer’s involvement in the pension plan is
minimal.
The Budget proposes to relieve employers
from applying the deemed taxable supplies rules for a fiscal year of the
employer where the amount of the GST (and the federal component of the HST)
that the employer was otherwise required to account for and remit under the deemed
taxable supplies rules in the preceding fiscal year is less than each of the
following amounts:
- $5,000; and
- 10% of the total net GST (and
the federal component of the HST) paid by all pension entities of the pension
plan in that preceding fiscal year.
In certain circumstances, employers that do
not meet these thresholds may qualify for limited relief. This measure will
apply in respect of any fiscal year of an employer that begins after Budget
Day.
GST/HST Business Information Requirement
Businesses are generally required to
provide the CRA with certain business identification when they register for
GST/HST. Currently, a $100 penalty applies for failure to provide this
information. The Budget proposes that the CRA be given authority to withhold
GST/HST refunds until such time as all prescribed business identification
information is provided to CRA. This measure will apply on Royal Assent to the
enacting legislation.
GST/HST on Paid Parking
Supplies of Parking by PSBs
Supplies of a property or service made by a Public
Sector Body (“PSB”) are exempt from GST/HST if all or substantially all (i.e.,
90% or more) of the supplies of the property or service are made for free. The
Budget clarifies that this exempting provision does not apply to supplies of
paid parking made by way of lease, licence or similar arrangement in the course
of a business carried on by a PSB. Occasional supplies of paid parking by a
PSB, such as those made as part of a special fund-raising event, would continue
to qualify for the GST/HST exemption. This measure will be effective the date
the GST legislation was enacted.
Supplies of Paid Parking by
Charities
Supplies of parking made by charities (other than
municipalities, universities, public colleges, schools or hospitals) are exempt
from GST/HST. The Budget clarifies that this exemption does not apply to
supplies of paid parking that are made by way of lease, licence or similar
arrangement in the course of a business carried on by a charity set up or used
by a municipality, university, public college, school or hospital to operate a
parking facility. This measure will apply to paid parking supplies made after
Budget Day.
GST/HST Treatment of the Governor General
For supplies made after June 30, 2013, the current GST/HST exemption for the Governor General is proposed to end.
Excise Duty Rate on Manufactured Tobacco
Effective after Budget Day, the rate of excise duty on manufactured tobacco (e.g. chewing tobacco or fine-cut tobacco used in roll-your-own cigarettes) is proposed to increase from $2.8925 to $5.3125 per 50 grams or fraction thereof.
