Situations where you are not considered to have collected the GST/HST
You are not considered to have collected the GST/HST on taxable benefits provided to employees in any of the following situations:
- The property or services that give rise to a taxable benefit are GST/HST exempt or zero-rated
- A taxable benefit results from an allowance included in the income of the employee under paragraph 6(1)(b) of the Income Tax Act
- You are restricted from claiming an input tax credit (ITC) in the situations described in ITC restrictions for the GST/HST paid or payable on the property and services that give rise to the taxable benefit
- The property or services that give rise to a taxable benefit are supplied outside Canada
Example
You, as an employer who is a GST/HST registrant, would like to reward an employee for outstanding performance, and you have agreed to pay for hotel accommodations and three meals a day, for one week, in London, England. An amount will be included in the income of the employee as a taxable benefit. However, you will not be considered to have collected tax in respect of the benefit provided to the employee, since the supplies were made outside of Canada.
Also, if the taxable benefit is for the standby charge or operating expense benefit of an automobile or an aircraft, you are not considered to have collected the GST/HST on this benefit in the following situations:
- you are an individual or a partnership and the passenger vehicle or the aircraft that you have bought is used less than 90% in the commercial activities of the business
- you are not an individual, a partnership, or a financial institution, and the passenger vehicle or aircraft that you bought is used 50% or less in the commercial activities of the business
- you are a financial institution and choose to treat the passenger vehicle or aircraft you lease or have bought as being used only in non-commercial activities of the business (see Note below)
- you are not a financial institution and you lease the passenger vehicle or aircraft which you use 50% or more in non-commercial activities of the business, and you choose to treat it as being used 90% or more in such non-commercial activities (see Note below)
Note
To make this choice, fill out Form GST30, Election for Passenger Vehicles or Aircraft to be Deemed to be Used Exclusively in Non-Commercial Activities, or state in writing the information required on the form. You do not have to file this form or statement, but you have to keep it with your records for audit purposes. For more information about this election, contact the CRA at 1-800-959-5525.
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