Investor Presentaiton
CORPORATE LAW
BY ALAIN RANGER
BRAZIL - CANADA COMPARATIVE LAW
by large businesses. Large business (annual taxable sales in excess of
$10 million) and financial institutions are prohibited from claiming input
tax credits in respect of the provincial component of the HST on certain
business inputs, such as:
Energy, except where purchased by farms or used to produce goods
for sale;
Telecommunication services other than internet access or toll-free
numbers;
Road vehicles weighing less than 3,000 kilograms (and parts and
certain services) and fuel to power those vehicles; and
Food, beverages and entertainment.
The restrictions on recovering the provincial portion of the HST are
in place for a limited period and will be phased out over the next
several years. These restrictions are similar to those that apply to large
businesses under the Québec sales tax.
In addition, note that Ontario maintains a separate retail sales tax
(levied at a rate of 8%) that remains applicable to insurance products
and benefit plans and a separate taxation system that is relevant to
fuel, tobacco and a limited set of other products. Where a business
supplies or is deemed to supply such taxable products it will be
required to register under a provincial tax regime that is separate
from its GST/HST registration.
Québec
The Québec sales tax (OST) is based upon the federal GST and it is
very similar to the GST in terms of structure and applicability. The
QST applies to most property and services that are considered to be
supplied in Québec. Similarly, the QST applies to certain importations
into Québec. To the extent that a QST registered business incurs QST
expenses to make a subsequent taxable supply of property or services,
the business is entitled to claim an input tax refund (which is analogous
to the GST input tax credit).
The QST is levied at the rate of 9.975%.
British Columbia, Saskatchewan and Manitoba
British Columbia, Saskatchewan and Manitoba levy their own retail sales
tax. These taxes are separate from the GST/HST. However, each of these
taxes is levied in a similar manner and only at one stage in the production/
distribution chain (generally at the retail level).
Such retail sales taxes apply to most transfers of tangible personal
property and software, but are only applicable to certain specifically
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