News and Insights

CRA issues GST/HST Memorandum 17.7, “De Minimis Financial Institutions”

Tax Development Feb 28, 2013

In late February, the Canada Revenue Agency issued GST/HST Memorandum 17.7, “De Minimis Financial Institutions” as a replacement of GST Memorandum 700-4, “De Minimis Financial Institutions”. The new memorandum aims to provide the necessary details on the calculations required to determine whether a person is considered a De Minimis financial institution (“FI”).

This document  makes reference to other guides and bulletins that pertain to provisions related to such persons, and provides a few examples showcasing a breakdown of the calculations to be performed for both the first and second de minimis threshold tests.  The memorandum also includes new information on the definition of a financial service and the implications to a person who supplies precious metals.  Paragraphs 24-26 note that subsection 149(4.01) of the Excise Tax Act (“ETA”) specifically excludes income from a zero-rated supply of precious metals from the calculation for de minimis FI tests.  The memorandum also addresses Amalgamations and Acquisitions in the final paragraphs.

This memorandum is shorter than the one it replaces, as details regarding special provisions related to FIs have been removed and replaced with references to other guides and bulletins that pertain to such provisions.  In addition, the definitions found in section 123(1) of the ETA have not been reproduced, but are referenced throughout the publication in a more descriptive manner.

GST Memorandum 17.7