First Nations tax

Notice to reader

The information on this page replaces the information in Guide RC4072, First Nations Tax (FNT), and as a result, this guide has been eliminated.


Overview

The First Nations tax (FNT) is a tax on the sale of listed products on some First Nations reserves. Some band councils have passed bylaws that impose the FNT on listed products. The FNT rate is 5% (the same as the GST).

The FNT may be referred to by a different name in the bylaws. For example, it might be called a community improvement fee. We do not list these other names but simply refer to the FNT.

A First Nation may have more than one area of reserve land. Where a band council has imposed the FNT, it applies to all reserve lands of that First Nation. When we refer to a reserve on this page, it means a reserve where the FNT applies.

The Canada Revenue Agency administers the FNT for the First Nations. 

Who pays the FNT

On reserves where the FNT applies, everyone has to pay it on the listed products they buy. However, certain provincial and territorial governments do not pay the FNT. For more information, see Find out if the GST/HST applies to provincial and territorial governments.

Listed products subject to FNT

A listed product refers to alcoholic beverages, fuel, and tobacco products that are identified in a band's bylaws.

First Nations that impose the FNT

The following chart shows the First Nations whose band councils passed bylaws that impose the FNT on the sale of listed products on their reserves.

First Nations that have impose the FNT
First Nation Effective date – Alcoholic beverages Effective date – Fuel
 
Effective date – Tobacco products
Westbank (British Columbia) September 1, 1999 September 1, 1999 February 1, 1998
Tk'emlúps te Secwépemc (British Columbia) September 1, 1998 September 1, 1998 September 1, 1998
Sliammon (British Columbia) FNT does not apply September 1, 1999 September 1, 1999
Stz'uminus (British Columbia) September 1, 2000 September 1, 2000 September 1, 2000
Adams Lake (British Columbia) May 1, 2001 May 1, 2001 May 1, 2001
Tzeachten (British Columbia) July 1, 2001 July 1, 2001 July 1, 2001
Cowichan (British Columbia) June 1, 2002 June 1, 2002 June 1, 2002
Little Shuswap Lake (British Columbia) May 1, 2006 May 1, 2006 May 1, 2006

Registering for the FNT

If you make taxable sales of listed products sold on a reserve where the FNT applies, you have to register for the GST/HST, unless you are a small supplier.

If you are registered for GST/HST:

  • you have to charge the FNT on your taxable sales made on land where the FNT applies
  • you have to charge the GST/HST on your taxable sales made in the rest of Canada
  • you may be able to claim input tax credits (ITCs) to recover the FNT you paid on purchases and expenses made on land where the FNT applies (for more information, see Input tax credits)
  • you may be able to claim ITCs to recover the GST/HST you paid on purchases and expenses made in the rest of Canada

For more information, see Register for a GST/HST account.

Charging the FNT

If you are not a GST/HST registrant, do not charge the GST/HST or the FNT to your customers. 

As a GST/HST registrant, you have to charge and collect the FNT when you sell listed products on a reserve. If a listed product is bought outside a reserve and then delivered to the reserve by a GST/HST-registered vendor, it is subject to the FNT.

When the FNT applies to a product, the GST does not. The usual GST/HST rules will continue to apply to supplies of other property and services on the reserve. For more information, see GST/HST and Indigenous peoples.

Information to include on your receipts or invoices when the FNT applies

You need to let your customers know the amount of tax payable or paid, or indicate that the tax is included in the price, if the FNT applies to their purchases. You can use cash register receipts, invoices, or contracts to inform your customers. You can also post signs at your place of business.

There is no need to change your cash registers or invoicing systems to add the FNT separately from the GST/HST.

You also need to provide specific information to your customers who are GST/HST registrants claiming ITCs. For more information, see Records you need to support your claim.

Reporting the FNT, filling out and sending the FNT Schedule, and paying any amound due

Reporting the FNT

If you sell listed products from a location on a reserve, you are required to file both of the following for each reporting period:

For more information on how to fill out Form GST34-2, see Instructions for completing a GST/HST Return.

If you have to collect the FNT, you have to report it at the same time as you file your GST/HST return. Your GST/HST return will include the combined amounts for both taxes (GST/HST and FNT).

If you collect the FNT, but you do not sell listed products from a location on a reserve, you do not have to fill out the FNT schedule. However, you still have to include the FNT in your GST/HST return, as if it were the GST/HST.

For FNT purposes, you can use the same election forms, rebate applications, or other returns that you use for GST/HST purposes.

If you file your GST/HST return electronically, send your FNT schedule separately by mail no later than the due date of your electronic return. Even if you are not required to, you can file your GST/HST return online. For more information, see File a GST/HST return, rebate or election electronically.

Filling out the FNT Schedule (GST499-1)

To fill out Form GST499-1, you will need the following amounts for the reporting period for which you are filing:

  • GST/HST and FNT sales
  • GST/HST and FNT charged on your sales
  • GST/HST and FNT paid or payable on your purchases

This form has two charts. Fill out all lines of Chart 1 and Chart 2, if applicable. Enter "0" if any amounts on these lines are nil or do not apply to you.

  • Chart 1 – if you sell listed products from reserve locations that are under the authority of one band council (do not fill out chart 2)
  • Chart 2 – if you sell listed products from reserve locations that are under the authority of more than one band council

You must keep copies of all documents to support your net tax calculations for audit purposes.

For line-by-line instructions, see Form GST499-1, First Nations Tax (FNT) Schedule.

If you use a streamlined accounting method such as the quick method to calculate your net tax, contact your tax services office for more information.

For more information on the net tax calculation, see Complete and file a return – Calculate the net tax.

After you have filled out your FNT schedule, transfer each amount from column C of your FNT schedule to the appropriate line on your GST/HST return. For example, transfer line 101C from your FNT schedule to line 101 on your GST/HST return.

After you have copied these amounts, follow the instructions on your GST/HST return for lines 112, 113A, 113B, and 113C.

You, or your authorized representative, have to sign the FNT schedule, and send it with your GST/HST return.

If you file your GST/HST return electronically, send your FNT schedule separately by mail no later than the due date of your electronic return.

Due date for reporting the FNT

The reporting period and the due date for the FNT schedule will be the same as for your GST/HST return. You have to file them together.

For more information, see Due dates for filing a GST/HST return.

Paying an amount due

If your net tax (line 109 of your GST/HST return) for a reporting period is a positive amount, you have to make a payment. In most cases, your payment is due at the same time as your return. For more information, see Remit (pay) the tax collected – When to remit (pay).

If you choose to make your payment at your financial institution, you still have to send the FNT schedule separately by mail.

To make instalment payments for the GST/HST and the FNT, use Form RC160, Remittance Voucher – Interim Payments. For more information on instalment payments, go to Remit (pay) the GST/HST by instalments

If you have a GST/HST refund

If your net tax (line 109 of your GST/HST return) for a reporting period is a negative amount, you can claim a refund.

You can have your refund deposited directly into your account at a financial institution. To sign up for direct deposit, go to My Business Account or Represent a Client.

Where to send your GST/HST return and FNT Schedule

Send your GST/HST return and FNT schedule to the following address:

Canada Revenue Agency
Prince Edward Island Tax Centre
275 Pope Road
Summerside PE  C1N 6A2

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