TEI comments on Canadian place of supply and harmonized sales tax rules.

• Position: Tax Executives Institute

March 25, 2010

On March 25, 2010, Tax Executives Institute filed the following comments with the the Canadian Department of Finance, urging the Department to release guidance as soon as possible to clarify implementation of the harmonized sales tax in Ontario and British Columbia. The letter was submitted under the aegis of TEI's Canadian Commodity Tax Committee, whose chair is Diana M. Spagnuolo of Imperial Oil Limited. Contributing materially to the preparation of the submission were Carol Felepchuk of TD Bank Financial Group and Robert J. Smith of Air Canada.

On February 25, 2010, the Department of Finance proposed amendments to the rules relating to the harmonized sales tax (HST), including place of supply, self-assessment and rebate, and the imported taxable supply rules relating to the provincial component of the HST in regulations under the Excise Tax Act (ETA). Tax Executives Institute's comments address the timeframes for issuing guidance, the absence of controlling guidance, the resulting uncertainty for business, and the increased complexities that arise with the proposed changes. TEI urges the Department to release regulations and obtain approval from the Governor in Council as soon as possible to permit sufficient time for companies to implement the new HST regime.

Background

Tax Executives Institute is the preeminent association of business tax executives. The Institute's 7,000 professionals manage the tax affairs of 3,000 of the leading companies in Canada, the United States, Asia, and Europe and must contend daily with the planning and compliance aspects of Canada's business tax laws.

Canadians make up 10 percent of TEI's membership, with our Canadian members belonging to chapters in Vancouver, Calgary, Montreal, and Toronto, which together constitute one of our nine geographic regions. Our non-Canadian members (including those in Europe and Asia) work for companies with substantial activities in Canada. In sum, TEI's membership includes representatives from most major industries including manufacturing, distributing, wholesaling, and retailing; real estate; transportation; financial services; telecommunications; and natural resources (including timber and integrated oil companies). TEI concerns itself with issues of tax policy and administration and is dedicated to working with government agencies to reduce the costs and burdens of tax compliance and administration to our common benefit. In that connection, TEI has been and...