CRA GST/HST Notice No. 250, “Proposed Changes to the Definition of Financial Service”

The Canada Revenue Agency has issued this notice to provide further information on the proposed legislative amendments announced on December 14, 2009, clarifying the application of GST/HST in respect of the definition of “financial service”.  Financial services as defined in subsection 123(1) of the Excise Tax Act are generally exempt.  The proposed amendments would specify that investment management services, facilitatory services and credit management services would not be considered exempt financial services.  The notice includes several examples to illustrate the specific types of services that would not be considered exempt financial services.  

The proposed amendments would apply to consideration for investment management, facilitatory or credit management services provided under an agreement, where the consideration for supplies that becomes due or is paid without becoming due, after December 14, 2009.  In addition, they would apply to consideration for such services rendered under an agreement that became due or were paid on or before December 14, 2009, unless the supplier did not collect or remit GST/HST, on or before December 14, 2009, in respect of any such services made under that agreement.

CRA Notice 250