TEI meets with Canadian Department of Finance on excise tax questions.

• Author: Riley, Phil W.
• Position: Tax Executives Institute

December 10, 2008

On December 10, 2008, Tax Executives Institute held is annual liaison meeting on customs and excise tax issues with officials of the Canadian Department of Finance. The agenda for the meeting, which is reprinted below, was prepared under the aegis of TEI's Canadian Commodity Tax Committee, whose chair is Phil W. Riley of ArcelorMittal Dofasco Inc. Minutes of the meeting will be posted to TEI's website after they become available.

Tax Executives Institute, Inc. (hereinafter "TEI" or "the Institute") welcomes the opportunity to present the following questions on Canadian commodity tax issues, which will be discussed with representatives of the Department of Finance (hereinafter "Finance") during TEI's December 10, 2008, liaison meeting. If you have any questions about the agenda, please do not hesitate to call Sherrie Ann Pollock, TEI's Vice President for Canadian Affairs, at 416.955.7373, sherrieann. pollock@rbcdexia-is.com; or Phil W. Riley, Chair of the Institute's Canadian Commodity Tax Committee, at 905.548.4475, phil.riley@arcelormittal.com.

Technical Questions

1. OECD Update

   We would appreciate an update on OECD developments and initiatives, especially in respect of the project relating to the application of VAT/GST to internationally traded services and intangibles.

2. Procurement Card Update

   A working group consisting of TEI Canadian Commodity Tax Committee members is working with Finance to develop alternative means of documenting eligibility for claiming input tax credits (ITCs) under GST Notice 199: Procurement Cards--Documentary Requirements for Claiming Input Tax Credits. This notice relates to GST input tax credit documentation with respect to procurement card activity. Please provide an update on this issue.

3. Extension of Provisions to Include Partnerships & Trusts

   There are a number of provisions currently in the Excise Tax Act ("ETA") that have not been extended to partnerships and/or trusts. An example is section 186, which permits a parent company to claim an ITC that the parent company would not normally be entitled to claim. Unfortunately, the section relates only to corporations, not partnerships or trusts. In some industries, the use of partnerships is more common than the use of corporations, but the availability of ITCs tends to be problematic. A corporation that owns an interest in another commercially active corporation is deemed to be involved in the same commercial activity and thus, ITCs are...