Periodically reviewing the application of GST/HST/QST to your income is important, particularly because:
- Federal and provincial legislation is constantly evolving as a result of contextual changes made by different governments;
- The interpretation of tax laws can change as a result of case law and doctrine;
- New revenues are added regularly.
Here are a few examples of amendments to the ETA and QSTA that impact municipalities:
- Amendments to the ETA in 2016 to exempt the supply of a public transportation service, regardless of who pays for the transportation;
- Amendments to the ETA in 2016 to exempt the supply of a right (intangible personal property) that enables the use of public passenger transport services;
- Amendment of the QSTA, effective 2014, to make certain income previously exempt from QST, subject to QST.
Here are a few examples of income for which the application of GST/QST has recently been determined by the tax authorities, and which could have an impact on your rate settlement:
- According to a 2023 interpretation, sludge from septic tank emptying is considered garbage for GST/QST purposes.
- According to a 2023 interpretation, the supply of an extrication service by a municipality to a victim of a car accident on its territory is taxable if the victim does not live on the municipality’s territory. In a previous interpretation dating back to 2006, the tax authorities indicated that this was an exempt supply.
- According to a 2018 interpretation, wastewater treatment on behalf of another municipality could be GST/HST/QST taxable.
Our team of tax specialists specializing in consumption taxes for public sector organizations can help you validate the GST/QST application of your pricing regulations.
