News and Insights

CRA Updates Two Memoranda

Tax Development Mar 14, 2016

As proposed in its 2015 budget, Newfoundland and Labrador decided to provide a partial rebate to municipalities. Effective January 1, 2016, the rebate is 25% of the provincial portion of the HST, with an increase to 57.14% scheduled to take effect on January 1, 2017. Section 58.47 of Part 3.2 of the New Harmonized Value-Added Tax System Regulations includes an anti-avoidance rule in relation to this change. Essentially, the anti-avoidance rule, which became effective on July 15, 2015, prevents municipalities from disposing of, then subsequently reacquiring property on a day after 2015, in order to receive the rebate. Additional information on this rule can be found in the updated GST/HST Memorandum 16.4, "Anti-avoidance Rules".

In addition, the CRA has issued GST/HST Memorandum 18.3, “GST/HST Relief for: Foreign Representatives, Diplomatic Missions, Consular Posts, International Organizations, and International Bridge and Tunnel Authorities”. This memorandum replaces GST/HST Technical Information Bulletin B-050R, “GST Treatment of Diplomatic Organizations and Officials”, and cancels and replaces GST Memoranda 300-3-8, “International Organizations and Officials”, and 300-3-8A, “NOTICE OF CHANGE to GST Memorandum 300-3-8”. The primary purpose of the memorandum is to explain the GST/HST relief available to foreign representatives, diplomatic missions, consular posts, and international organizations, as well as the GST/HST zero-rating provisions available for certain supplies to international bridge or tunnel authorities.