News and Insights

CRA GST/HST Memorandum 16.3.1, “Reduction of Penalty and Interest in Wash Transaction Situations”

Tax Development May 01, 2010

The Canada Revenue Agency has revised this memorandum to reflect the change in the administrative policy relating to GST/HST wash transactions.  Where a taxpayer has been assessed for an amount of tax where there is a wash transaction, the portion of the interest assessed in excess of 4% may be waived.

In addition, this change allows for additional interest relief in relation to wash transactions disclosed by GST/HST registrants through the Voluntary Disclosures Program (VDP).  

These changes apply to any reporting period where net tax is due after March 31, 2007.   

CRA Memorandum 16.3.1