Under the commodity tax regime, an individual is entitled to claim an input tax credit (ITC) with respect to the purchase of goods and services only if they are used in connection with commercial activities (i.e., in the provision of taxable and/or zero-rated supplies).

A holding corporation whose sole activity is to hold investments could, therefore, not claim ITCs on its expenses since it does not carry on commercial activities because financial services are considered to be an exempt activity.

However, Section 186 of the Excise Tax Act (ETA) provides that a holding corporation that does not make any taxable supplies may claim ITCs on goods and services to the extent it is considered that they were acquired for consumption or use in relation to the shares of capital stock or indebtedness of another corporation that is at that time related to it, if that other corporation carries out commercial activities exclusively (i.e. 90% or more).

Application of this provision has led to considerable discussion with respect to the question of whether a good or a service acquired by a holding corporation can reasonably be considered to be acquired for consumption or use in relation to the shares of capital stock or indebtedness of another corporation.

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Marco Perron
Partner | CPA, CRMA | Assurance

Private and public sectors are both entering the era of cloud computing. The security of their operations should be ranked among their top priorities.

Digital technologies create extensive data confidentiality and information system security challenges for both governments and businesses. However, these developments also offer numerous benefits.

Easier management

Implementing cloud technology is helping governments to improve business flexibility despite their back-end silo systems. This makes it easier for experts and stakeholders to collaborate.

Adopting cloud technology makes it easier for organizations and businesses to manage digital technology and IT security.

Security first and foremost

Operating in the field of cyber security requires the correct implementation of security standards and world leading best security practices to meet clients’ expectations.

Peace of mind in the cloud

What we are offering is similar to a car rental service. It’s simple and efficient and meets your needs, whereas owning a car requires additional costs: maintenance, new parts, etc. This adds costs, is time-consuming and, in the end, defeats the purpose. It’s the same for cloud migration technology.

Businesses and organizations do not want to allocate a complete department’s resources to create their own technology and servers, just as someone who only needs a car for a week of vacation doesn’t want to purchase a brand new vehicle.

You just need to access the technology and that’s what we are offering to the government. Easy, simple and secure. We take care of the security, so clients can focus on their core business.

Our in-house team members offer a completely holistic cybersecurity practice committed to delivering security solutions from system conception to disposal, safeguarding your most crucial organizational assets and enabling you to fulfil your obligations.

Our solutions

We offer cloud migration business services to governments and public companies. That includes unique methodologies, system architectures, communications and reports that quickly and easily put you in the picture, in detail and within the larger context of your operation, identifying gaps and risks, and proposing effective mitigation measures.

Our team of experts will help you solve your challenges by designing and implementing a matrixed, holistic cybersecurity program that meets your expectations.

About Raymond Chabot Grant Thornton Consulting Inc.

RCGT Consulting Inc. provides a comprehensive range of services. Our primary focus areas include: internal audits, cyber security, audits of contributions, digital forensics and forensic accounting, management consulting, and other general consulting services such as cost reductions and process improvement. Our client base includes the federal government, provincial governments, municipal sectors, universities and colleges, and medium to large enterprises.

09 Jul 2019  |  Written by :

Marco Perron is a Partner at Raymond Chabot Grant Thornton. He is your expert in assurance for the...

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Mandatory Sales Tax System Registration for Certain Non-resident Suppliers in Saskatchewan: A Reminder

Mandatory registration: Changes retroactive to april 1, 2017

While more than a year has passed since the amendments to Saskatchewan’s provincial sales tax (PST) system were assented to, it’s important to remember the main features of these changes since, even today, they have a significant impact on some commercial entities doing business in that province.

As a reminder, on May 30, 2018, Royal Assent was given to the amendments proposed by the Government of Saskatchewan regarding the PST registration criteria for non-resident suppliers. These changes, effective retroactively to April 1, 2017, broaden the tax base to include non-resident suppliers who make sales of tangible property and certain other taxable services to consumers in Saskatchewan.

Read the document below for more information.

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Luc Lacombe
Partner | FCPA, M. Fisc. | Tax

In recent weeks, family law has been the topic of a Quebec government public consultation. To maximize this necessary reform, it must include a review of family taxation. The reason is quite simple: there is a disconnect between tax rules and the reality of today’s families.

An in-depth review is needed

It’s obvious that the Canadian tax system is simply outdated as it applies to both our SMEs and our families. In fact, our country’s tax system has not undergone an in-depth review since the 70s. Today, the Canadian and Quebec family taxation system is simply a patchwork of measures that have been added over time without changing rules or making any in-depth amendments to the legislation. The result is ongoing involuntary breaches of neutrality.

The neutrality of the tax system for families was reviewed by Raymond Chabot Grant Thornton and the UQAM’s École des sciences de la gestion (ESG UQAM) in an innovative study published in September 2018. The study showed that in more than 70% of the situations studied, the tax rules are not neutral depending on a family’s social profile and economic class, and the couple’s legal status. One of the unfortunate consequences of these breaches of neutrality is that Canadian and Quebec families are forced to make choices based on tax implications rather than on the needs of the family’s situation.

Consider for example governments’ main incentives such as the TFSA, RRSP, RESP and RDSP. When deciding on a type of savings, families with limited financial resources must make a decision regarding these programs on the basis of tax rules, to the detriment of their real needs, limiting their financial flexibility. Moreover, consider that family businesses are still faced with tax inequity on an intergenerational business transfer at the federal level. Provincially, family businesses must also deal with transaction restrictions such as the requirement to undertake a total, rather than a partial, business transfer or the inability to retain an interest after the sale.

Quebec and Ottawa must both work on this

The Quebec government can play a key role in the Canadian family taxation reform. The current consultation on family law initiated by the Minister of Justice and Attorney General of Quebec, Sonia Lebel, is an opportunity to look at potential options regarding tax changes for a more extensive review of family-related measures. By changing the tax rules so that they are better suited for today’s families and no longer impact taxpayers’ choices, Quebec would be sending a clear message to Ottawa to harmonize measures and reduce the gaps between tax policies and family dynamics.

Our study already identified several areas for consideration in the course of the current initiative.

For example, why not introduce a system based on family rather than individual income, implement a tax rate structure based on the size of the family, create a registered general savings plan (RGSP) or authorize the possibility of a rollover at the time of death to a trust established exclusively for a dependent child?

The Quebec government and Ottawa should both be encouraged to review family taxation so that it’s more representative of our Quebec and Canadian values, such as equity and equality. It’s in everyone’s interest.

Let’s take action together!

This article appeared in La Presse + on June 25, 2019 (in French) with Emilio B. Imbriglio, the firm’s president and CEO from 2013 to 2021.

25 Jun 2019  |  Written by :

Luc Lacombe is a partner at Raymond Chabot Grant Thornton. He is your expert in taxation for the...

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