Draft policy regarding GST on transfer payments open for comments
The Canada Revenue Agency (CRA) is seeking feedback on a draft policy to determine whether a transfer payment is consideration for a supply
. This memorandum explains how and when the GST / HST provisions of the Excise Tax Act
apply to transfer payments. It sets out the CRA’s administrative guidelines for determining when a transfer payment provided by a grantor is consideration for a supply made by the grantee. This is important for municipalities as, in the past, a transfer between two municipalities as a result of an intermunicipal collaboration framework (ICF) agreement was charged GST by the CRA.
The deadline for feedback is August 22, 2022
This review is welcomed by the RMA, as it addresses resolution 16-19F: GST for Grants and Subsidies Interpretation
. The RMA will monitor the outcome of the policy once it completes the comment period.
Manager of Policy & Advocacy