News and Insights

CRA Issues Further Guidance on Temporary GST/HST Relief

Tax Development Dec 05, 2024

The Canada Revenue Agency (CRA) has published a GST/HST holiday tax break document to provide further administrative guidance on the items that will qualify for temporary GST/HST relief between December 14, 2024, and February 15, 2025 (referred to as the “eligible period”). The legislation to implement this relief has been passed by the House of Commons and only needs to be passed by the Senate and receive Royal Assent to become law.

The following 10 categories of supplies will be eligible for the GST/HST holiday:

  1. Children’s clothing and footwear
  2. Children’s diapers
  3. Children’s car seats
  4. Children’s toys
  5. Jigsaw puzzles
  6. Video game consoles, controllers, and physical video games
  7. Physical books
  8. Printed newspapers
  9. Christmas and similar decorative trees
  10. Food and beverages and related services

The CRA has made it clear that the temporary tax holiday will apply to both business-to-business transactions as well as purchases made by consumers. In addition, the guidance provides links to details, examples, and restrictions for each eligible category of supply. For example, a toy intended for children under 14 years old will qualify for relief, and the CRA notes that, if a toy is recommended for ages 8 and up, it will be eligible. However, collectibles not intended for play or learning, and toys and model sets marketed to adults, will not qualify, which might prove tricky for toy retailers during the busy season.

The guidance also addresses partial payments and prepayments for qualifying supplies. Only partial payments made during the eligible period will qualify for GST/HST relief. However, a deposit on an eligible item paid before the GST/HST holiday takes effect will qualify for relief, provided the item is supplied and the outstanding balance is paid during the eligible period. For example, relief will be available if a deposit is applied to an amount owing on a qualifying purchase during the eligible period.

For more information on the GST/HST relief for holiday essentials, see Legislation for Temporary GST/HST Relief on Holiday Essentials Tabled.

If you have any questions about how this tax relief might impact your organization, please do not hesitate to contact Ryan TaxDirect® at taxdirect@ryan.com or 1.800.667.1600.