News and Insights

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

Tax Development Jun 30, 2010

The Canada Revenue Agency has revised this notice to provide further information on the proposed legislative amendments set out in Bill C-9, the Jobs and Economic Growth Act, 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 asset management services, credit management services and preparatory services provided in conjunction with a financial service would not be considered exempt financial services.  The revised notice includes 16 illustrative examples that provide general guidance on how the proposed amendments would apply in respect of the provision of certain services.

The proposed amendments would apply to consideration for asset management, credit management or preparatory services provided under a written 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 Revised