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Budget Proposes GST/HST Changes


Changes to the Goods and Services Tax/Harmonized Sales Tax (GST/HST) rules for registered pension plans (RPPs) and healthcare services and a streamlined process for correcting accidental over-contributions to RPPs are among the proposals in the federal government’s ‘Economic Action Plan 2013: Jobs, Growth and Long-Term Prosperity’ budget. An Eckler ‘Special Notice’ says it also signaled a renewed debate on the topic of a national securities regulator and included “encouragement” for provinces to move forward with pooled registered pension plans (PRPPs). The budget proposals would simplify employer compliance with the GST/HST rules by allowing employers to elect not to account for GST/HST on actual taxable supplies and allowing relief from accounting for tax on deemed taxable supplies. “The Tax Adjustment Note relief will be particularly helpful to plan sponsors that seek reimbursement from the pension plan for the value of their in-house resources,” says Greg Hurst, managing director of Greg Hurst & Associates Ltd. The budget proposes expanding the list of GST/HST-exempt healthcare services to include publicly funded or subsidized personal care services for individuals who require assistance at home due to age, infirmity, or disability. It also would give plan administrators the ability to refund inadvertent over-contributions to RPPs without CRA approval, provided the refund is made by the end of the calendar year following the year in which the over-contribution was made. The Canadian Life and Health Insurance Association says there are tax measures that were applied to annuities that need to be examined more closely to determine their impact. However, it welcomes other initiatives, in particular, the greater focus on long-term bond issuances by the Canadian government over the next decade.

Courtesy of Benefits and Pensions Monitor website News Alerts

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