CJEU - Recent Developments in Value Added Tax 2022

1. Introduction

1.1. General Overview of Canadian Sales Taxes

Canada imposes a value-added sales tax known as the goods and services tax and, in provinces that have agreed to harmonize their sales taxes with the federal government, the harmonized sales tax (collectively, GST/HST). This applies throughout Canada but at a higher rate in the provinces that have agreed to harmonization. Very generally, it is designed such that businesses have three key obligations. If they are required to collect tax, they must be registered with the government; they must collect tax on taxable supplies (generally when they provide most goods or services – referred to as “making a supply”) in Canada; and they must remit such tax (net of any credits to which they are entitled) to the government. Businesses may subsequently be entitled to recover input tax credits (ITCs) on the GST/HST that they pay in the course of their commercial activities.

Four out of the five Canadian provinces that have not agreed to harmonization (British Columbia, Saskatchewan, Manitoba and Quebec) (collectively, the Non-Harmonized Provinces) levy their own provincial sales taxes. Quebec imposes a S. 108value added tax (QST) that is almo...