by Helen
(Calgary, AB, Canada)
Sometimes learning bookkeeping means phoning CRA
I understand Financial Institutions (e.g. let's say one of the big five banks) are exempt from GST/HST for most of their services they offer (e.g. deposits by customers). By being exempt I believe this also means these financial institutions cannot claim ITC.
But I am really confused ... if a Canadian bank is exempt for financial services then I would imagine they still need to pay taxes on things like advertising they make to promote their services since these taxes are charged by another business.
So, because the bank had to pay taxes for that expense can they still claim the GST/HST paid out for that expense as an ITC or are they still not allowed claim ITC since they are exempt?
From what I read on the CRA site, it mentions Financial Institutions are exempt form several financial services but when you clarify it all seems to be specific to services that relate its customers/clients.
If the bank were to do things outside its financial core, such as advertising, it seems to me that the taxes they are charged don't relate to this exemption and can be claimed as an ITC during the next reporting period.
Do I have this wrong? I notice this one particular bank has a GST/HST number, so at least I know they collect and remit GST/HST back to CRA. This would mean they are likely doing this since certain parts of their business don't relate to financial services and/or they are looking to claim ITCs on those expenses.
And finally, what about commission based payouts made by this bank to commission-based sales agents? Would the bank be exempt from having to pay taxes on top of the commissions to these agents?
Would these agents be exempt too or would they have to pay GST/HST out of their commissions since the bank uses the excuse of being exempt of GST/HST?
Comments for Financial Institutions Exempt From GST/HST
|
||
|
||
Use the search feature to quickly find the
information you're looking for.
Click on image above to read the chat.
Join Me On Facebook
Help support this site by "liking" me! Here's where I post current information.
Listed Under Websites NOT Local Business.
This website is NOT associated with the business operating in Bonnyville AB.