Commodity Tax

With the expansion of the HST to Ontario and British Columbia, it has become more important than ever for Canadian organizations to effectively manage their potential HST liabilities. Designed to help taxpayers avoid traditional HST audit issues and several new exposures expected to result from the implementation of the HST in Ontario and British Columbia, this half-day workshop will provide practical advice on:

• Common HST audit issues, including proper documentation of input tax credits
• Potential liability exposures arising out of the new HST place of supply rules
• HST transitional issues in Ontario and British Columbia
• Self-assessment of tax on imports and interprovincial transfers; and
• Recapture of input tax credits on certain types of expenses

Case studies and breakout sessions will be used to reinforce the technical material and illustrate how effective internal controls and accounting processes may be used to minimize an organization’s overall HST liability exposure.

Using cutting-edge research and personal stories from the world of sports and business, Dr. Pawliw-Fry teaches his audiences the principles of emotional intelligence and high performance, and inspires them to take their careers, businesses and personal lives to the next level. He is an expert in optimizing the last frontier of competitive advantage – people.

Dr. J.P. Pauliw-Fry is a thought leader on the subjects of leadership, performance and managing change. An expert in emotional intelligence, he is one of the world's most highly sought-after speakers on the topic.

The HST has now been implemented by business organizations across the country. The transition effects are now beiong felt. What went right? What went wrong? What’s next? Listen to the Symposium’s panel of experts discuss the good, the bad and the ugly of HST implementation in 2010

This paper will deal with common difficulties faced by large organizations in ensuring that input tax credits are claimed by the proper entity and that GST elections are used effectively. It will deal with both ongoing operations and reorganizations, and will provide suggested practical solutions where appropriate. Discussed issues will include the following:

• Review of recent case law on input tax credit documentation issues
• Claiming ITCs on liabilities assumed by a purchaser (in light of the FCA decisions in the Telus case)
• ITC implications of using a single funded entity (banker) or centralized purchaser in an organizational structure
• Claiming ITCs where suppliers erroneously invoice the wrong entity in the group
• Use of bare trust organizations within an organizational structure
• Transfers of business operations on wind-up of internal partnerships
• Complications of introducing internal partnership structures
• ITCs on acquisition and disposition costs

As the pace and scale of indirect tax reform increases globally, this session highlights some of the most imminent major changes, and their implications for those who manage indirect tax globally. The overall global trend will be compared and contrasted with recent Canadian developments. Crucially, we will explore how the indirect tax team can continue to perform and deliver efficiently in a more complex indirect tax landscape and the session will address practical questions focused on knowledge management, people management, global training and operational investment priorities.

If you purchase billboard space for your new advertising campaign, are you acquiring an advertising service, are you leasing real property, or have you acquired a service in relation to real property? If you outsource your IT department, are you leasing computer servers from your service provider or are you receiving a pure service? With sales tax harmonization in BC and Ontario and the new Place of Supply Rules, how you characterize a transaction, both within your contract and for tax purposes, will determine not only whether GST/HST applies, but what rate of tax as well. This paper and session will set out the factors and principles that one should look to in order to properly characterize a supply for GST/HST purposes, and will provide guidance on the steps you can take to ensure a CRA auditor will agree with your characterization.

This paper will examine how the Harmonized Sales Tax (HST) rules, currently being developed and drafted, will apply to investment plans including mutual funds, segregated funds, pension plans, and possibly others. Importantly, we will consider how HST will apply to fees payable by the plans, such as management fees payable by mutual funds and particular issues that can arise in the context of each type of investment plan. We will include examples in the paper to explain how the rules will work depending on the structure (e.g. fund of fund) and the provinces involved (e.g. non-participating only, participating only, non-participating and participating). We will identify issues and potential challenges, both technical and operational, that we see and offer our thoughts as to how they can be managed and resolved. While we expect there to be a significant technical element to the paper given the topic (and expectation that the rules in their final form may be quite complex), our goal is to translate technical complexity into practical application. The underlying policy behind the rules will be considered.

In addition, we will compare and contrast the HST rules for investment plans to those in other VAT jurisdictions, including EU member states. The purpose of this will be to leverage from these experiences where possible for the Canadian HST context.

The harmonization of provincial sales tax in Ontario and British Columbia on July 1, 2010 benefits many commercial organizations, largely as a result of the ability to claim input tax credits on the provincial component of the HST. However, transitioning to the HST will not be straightforward for large businesses and financial institutions, thanks to the introduction of temporary input tax credit restrictions on certain types of common expenses incurred by these organizations. This paper will examine the new temporary input tax credit restrictions on the provincial component of the HST in Ontario and British Columbia, as well as their predecessor, the QST input tax refund restrictions. Each category of restricted expense will be analyzed in detail, with a particular emphasis on exceptions to the restrictions. Past experiences with the QST restrictions will be compared to the anticipated administration of the new HST restrictions, and the advantages and drawbacks of utilizing optional methods available to determine the extent of restricted input tax credits will be reviewed. An overview of the CRA’s new electronic reporting requirements with respect to input tax credit recapture, and the implications of failing to comply with these rules, will also be provided.

There are unique issues to confront as the transition from one tax regime to another happens. This session will review all of the outstanding issues and concerns that organizations need to be aware of related to BC and ON sales tax. From a practical perspective, the session will tell you what you need to know with respect to the old PST regimes to effectively manage compliance obligations. Some specific items:

• Finalizing returns
• How to deal with returns after November (Ontario) or December for BC
• Bulk clearance certificates
• Refunds
• Audits
• Reversal of self-assessments
• Bad debts
• Other administrative issues and concerns

Duties are only one of the considerations in effectively managing your customs and global trade function in both your current business as well as when considering entering new markets. Today, security and advance shipping information is a must and ensuring the required (by internal and external sources) and correct trade data is managed throughout the supply chain can be critical to success. Effective processes and controls are not only a key requirement to having your goods cleared through Customs efficiently but can also provide cash savings and result in more efficient use of staff in a global marketplace, thereby reducing costs. With this in mind, this session will cover:

• The U.S. “10 + 2 Rule”: What does this mean and how will this affect your business?
• Managing trade data – How can technology help?
• Canada as a “Manufacturing Free Trade Zone” and what it means – Budget update
• Customs Valuation and Transfer Pricing Considerations relating to –Subsequent Proceeds
• Tips & Traps and how to stay out of trouble

Temporary Storage Exemptions from State Taxation

Canadian enterprises often stage and store goods at facilities in the US in order to expedite delivery to customers located throughout the states. These facilities can be owned or leased and self-operated or managed by a third party. Proximity to customers, resources and logistics centers are often critical criteria in selecting a US distribution location. State and local taxes should also factor into the decision-making process.

While the presence of warehouse employees, inventory or spare parts is commonly known to create a taxable presence for purposes of state and local income/franchise taxation, the states vary widely in their application of sales and use tax to the in-state storage of inventory and related uses of goods and services ancillary to warehousing, logistics and fulfillment functions. This discussion explores some of the state and local tax considerations related to US based distribution functions with a particular focus on the inconsistently available temporary storage exemption from sales and use taxation. At the end of this discussion, participants will have a better idea of the impact state and local taxation can have on the warehousing and distribution location selection process.

State Taxing Jurisdiction of Out-of-State Internet Sellers

More states are following New York State’s 2008 initiative imposing sales and use tax compliance obligations on out of state sellers that may have a virtual presence in the state. These new nexus standards often assert a state's taxing authority based on the existence of an agency relationship between an out of state seller and an in-state host. In addition, some states are imposing reporting obligations on all out of state sellers including those clearly beyond a state's taxing jurisdiction.

This discussion will provide state specific updates on evolving virtual nexus theories and set forth possible strategies to lawfully avoid unanticipated tax compliance obligations.

The rules concerning when a non-resident is required to account for GST/HST on its activities carried out in Canada do not necessarily match up directly with the income tax treatment. This is a significant distinction which continues to challenge commodity tax advisors.

This session will be an awareness session addressing the distinctions to clarify the rules and providing real-life examples that highlight this distinction.

Join Margaret Hoffman of Ernst & Young LLP for a 45-minute breakfast session as she demonstrates how to search, save, and share documents quickly and easily on knotia.ca, CICA’s revolutionary search platform.

Be among the first to preview CICA’s latest eBook: Ernst & Young’s Excise Tax Act, which will be available for download to your computer, BlackBerry®, iPad, or other mobile device.

Continental breakfast will be served.

Our annual review will include discussion of the most significant cases decided in the last year as well as those that are ongoing and could impact the practice of commodity tax over the coming years. Please check back at our website for a complete list of the cases being discussed.

What are the real implications of these announced changes to your business? Have they really made the application of tax easier? This session will review the new place of supply rules in detail with a focus on their practical, or perhaps, in some cases, not so practical implications on your business from both a sales and a purchasing perspective.

On December 14, 2009 the Government announced substantial changes to the definition of a "financial service". The changes serve to narrow the term "arranging for" in the definition which would impact many businesses that are involved in some extent with the making of a financial service.

This session will provide an update on this initiative and outline the potential scope and impact of this initiative.

Un des points forts du Symposium est cette table ronde, tenue exclusivement en français, où des hauts fonctionnaires de Revenu Québec sont invités à présenter l’état d’avancement des projets d’envergure entrepris au Ministère en matière de politiques. On y discutera aussi des principaux enjeux auxquels sont confrontés les praticiens et les entreprises aujourd’hui, de certaines questions administratives, de modifications techniques et de cas de jurisprudence importants.

La table ronde se terminera par une période de questions où vous pourrez obtenir des réponses directement de la bouche des décideurs sur les sujets qui vous préoccupent le plus.

La table ronde sera animée par Jean-Hugues Chabot, de Ernst & Young LLP, SENCRL.

This session will review a collection of fairly common technical issues within the GST/HST legislation that can have significant financial implications--particularly, if they are overlooked. Examples such as registration and reporting for Newcos and non-residents, the various elections: section 156 elections, reporting on behalf of others, joint ventures, transactions within partnerships as well as such issues as taxable service entities used to support exempt supplies, issues with GST 60s (the forgotten form), ITCs/rebates, implications of taking the resort condo out of the rental pool, as well as the GST/HST objection process (because it is going to be more common) and other issues that will continue to challenge practitioners in industry as well as public practice, albeit with a much more expensive HST downside.

The objective of this session is to familiarize the participant with the valuable information resources available through the use of CRA’s The Audit Manual, and provide practical tips on managing the GST audit process.

In December 2008, the CRA released a public version of its audit manual. The document is quite extensive and will help both advisors and registrants prepare for CRA GST audits. It contains significant ETA GST technical guidance, inside procedural rules, checklists, diagrams and references to other sources and jurisprudence. Give the overwhelming size of the Manual, many practitioners and in-house experts do not yet fully appreciate its usefulness. This and other distractions in 2009 (i.e. harmonization) many have taken attentions away from the importance of optimum GST audit management

In 2007, the Department of Finance announced a new GST/HST rebate for pension plan trusts. Since the original announcement, draft legislations has been issued and two provinces have adopted the HST. This session will review the new provisions, particularly the new obligations for many employers, the rebate for pension plans, as well as the impact of the HST on the provisions.

Things are moving at a fast and furious pace with respect to Financial Institutions in the GST/HST world. This session will update implementation issues associated with sales tax harmonization for Financial Institutions (including investment plans), update the issues with respect to the proposed changes to the definition of "financial service" as well as Draft CRA Notice 250, update the issues with respect to the draft legislation released September 23, 2009 involving GST 111, self-assessment, ITC allocation, and pension plans and discuss relevant court cases addressing Financial Institution issues.

HST implementation in Ontario and BC has had a significant impact on the residential and commercial real property sector. This session will focus on the impacts and issues that have arose in this sector concerning HST. Updates on any other indirect tax that have arisen over the past year will be provided as well.

The objective of this session is to review a number of significant issues for public sector bodies, focussing on municipalities, registered charities, NPO and QNPO entities. Among them:

• A fresh look at ITC and rebate allocation methodologies and their impact on the tax burden of the entity and a discussion of CRA audit issues/challenges arising with the use of methodologies. Ordering requirements of direct and indirect approaches and a review of ‘fair and reasonable” and “applied consistently” concepts.
• Dealing with grants, subsidies and forgivable loans deemed to be consideration for taxable supplies and the implications for ITCs and rebate apportionments.
• A review of municipal designation requests for public service bodies: issues and criteria, setting out a practical approach to understanding the rebate implications to the entity and cost/benefit considerations.
• A review of significant case law for public service bodies over the past few years and a refresh of the current implications for advisors, practitioners and financial managers in the sector.

Senior government representatives from CRA have been invited by CICA to give a timely report on the policy initiatives of the day and an update on the administrative and practical issues that have arisen over the last year. Always one of the most popular features of the Symposium, the Q&A session will highlight responses to questions of the major issues of concern to practitioners and industry professionals submitted to CRA in advance.

This workshop will provide an opportunity to put into practice the use of CRA's "The Audit Manual" in planning and conducting a "mock" audit. Along with the presentation on Tuesday morning, this workshop will facilitate the development of your own in-house best practices for managing the GST/HST audit.

Note: Please bring a laptop computer so that sections of the Audit Manual can be accessed and used in the workshop. Sections of the Audit Manual required for the group work portion of the workshop will be provided at the workshop.