CRA Issues New GST/HST Memorandum on Anti-Avoidance Rules

The Canada Revenue Agency (“CRA”) has issued GST/HST Memorandum 16.4, “Anti-Avoidance Rules” to replace GST Memorandum 500-6-9, dated June 7, 1991.

The purpose of the memorandum is to explain the application of anti-avoidance rules relating to GST/HST.  These rules intend to prevent persons from benefitting from transactions undertaken primarily for the purpose of avoiding, reducing, or deferring the payment of tax or increasing a refund or rebate.  The memorandum covers general anti-avoidance provisions, as well as anti-avoidance rules relating to rate changes and harmonization.