Manitoba Tax Assistance Office

Tax Rebate Discounting in Manitoba

The Canada Revenue Agency and the Province of Manitoba allow tax preparers to provide a tax refund prior to filing a return for a legislated fee.  The “discounted” refund is then forwarded by CRA directly to the tax preparer.  This activity is known as tax rebate discounting.  Discounting is regulated by both the federal and Manitoba governments and practitioners must register with both the Canada Revenue Agency and the Province of Manitoba.

In order to operate as a tax rebate discounter in Manitoba, a Certificate of Registration must be issued by the province.  Discounters are required to file an Application for Registration as a corporation or as an individual on an annual basis and must meet criteria as laid out in Sections 67 to 76 of the Manitoba Income Tax Act in order to remain in good standing.  Discounters are also required to file a report titled Return of Business Information in the year following the discounting activity to indicate the volume of transactions.

As of July 1, 2004, tax preparation is subject to the 7% Manitoba retail sales tax (RST).  A discounting transaction is deemed to include a $30 tax preparation fee which will be subject to RST.  If the discounting fee is less than $45, RST will be 2/3 x discounting fee x 7%.  For general information on sales tax as it applies to income tax preparation and other professional services, see the Manitoba Finance, Taxation website at:  http://www.gov.mb.ca/finance/taxation/index.html.

Beginning for the 2004 income tax year, discounters will be charged an annual registration fee of $500 plus $100 for each additional discounting location.  This fee must be submitted at the same time as the application for registration.

Canada Revenue Agency Information:

General information, a procedures manual, tax filing and federal registration information may be found on the Canada Revenue Agency website at www.ccra.gc.ca/discounters.

Province of Manitoba Information:

If you wish to register as a Tax Rebate Discounter in Manitoba, or would like more information on Manitoba issues concerning discounting, please contact:

Manitoba Tax Assistance Office
#809 - 386 Broadway
Winnipeg MB R3C 3R6

Winnipeg, call (204) 948-2115
Outside Winnipeg, call toll free 1-800-782-0771
Email - TAO@gov.mb.ca