Annual lists 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

Ottawa, October 8, 1998
1998-103

Proposed Sales Tax Amendments, Regulations Tabled

Related documents : 

• Backgrounder -- Election under Section 156 for Closely Related Persons.
• Notice of Ways and Means Motion to Amend the Excise Tax Act Adobe Acrobat Version (33,639 bytes).

Secretary of State (International Financial Institutions) Jim Peterson today tabled in the House of Commons, on behalf of Finance Minister Paul Martin, a Notice of Ways and Means Motion that proposes amendments to the Excise Tax Act relating to the Goods and Services Tax and the Harmonized Sales Tax (GST/HST). The proposed amendments are aimed at:

• easing compliance for Canadian partnerships that are members of a closely related group by allowing them the use of an election to relieve them of having to account for otherwise fully recoverable tax on certain intra-group transactions;

• bringing the GST/HST provisions relating to meal and entertainment expenses more in line with the treatment of such expenses under the Income Tax Act; and

• responding to industry concerns regarding the need for greater certainty in the application of the GST/HST to construction services provided in Canada by sureties under construction performance bonds.

Also released today are draft amendments to the Financial Services (GST) Regulations. The Regulations are being amended to codify a previously announced measure that ensures that otherwise taxable clearing, settlement or authorization services -- such as those provided in respect of credit card transactions -- will not be treated as financial services by virtue only of the risk assumed by the service provider under the terms of the service agreement. Another proposed amendment clarifies that an existing exemption for a service, provided by an agent, salesperson or broker, of arranging for the transfer of ownership of a financial instrument will also apply to the issuance, renewal or variation of the instrument.

The attached backgrounder, Notice of Ways and Means Motion and draft Regulations describe these measures in further detail. References in these documents to "Announcement Date" should be read as references to today's date.

___________________
For further information:

Lalith Kottachchi
Sales Tax Division
(613) 992-8907