Federal budget 2017 – GST/HST changes
The Federal Budget of March 22, 2017, announced certain changes to the Goods and Services Tax/Harmonized Sales Tax (GST/HST) regarding ride-sharing services and non-resident tourists.
Ride-Sharing Services
To ensure that ride-sharing businesses are exposed to the same sales tax rules as taxi operators, the definition of a tax business under the Excise Tax Act will be amended to include a ride-sharing business, as well. Therefore, ride-sharing businesses, like Uber, will now be required to register for the GST/HST and charge the GST/HST on their fares, in the same manner as taxi operators. This rule comes into effect on July 1, 2017.
Non-Resident Tourists
The GST/HST rebate that was available to non-residents of Canada for the GST/HST they paid on the accommodation portion of their tour packages has been repealed. The rebate was found to be ineffective in promoting tourism in Canada, and was costly to maintain. This rule is effective for supplies of tour packages or accommodations made after March 22, 2017. However, the rebate will still be available if the supply and payment of the tour package or accommodation occurs after March 22, 2017, but before January 1, 2018.
Contact us today for more information on how these changes may affect you and your business.