Financial Services and Financial Institutions (GST/HST) Regulations

Financial Services and Financial Institutions (GST/HST) Regulations His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 277(1)* of the Excise Tax Act, is pleased hereby to make the annexed Regulations prescribing services for the purposes of paragraphs (m) and (t) of the definition “financial service” in subsection 123(1) of the Excise Tax Act. S.C. 1990, c. 45, s. 12 [Repealed, SOR/2011-56, s. 5] In these Regulations, Act means the Excise Tax Act. In these Regulations, the expressions employee life and health trust, registered disability savings plan, registered education savings plan, registered retirement income fund, registered retirement savings plan and TFSA have the same meanings as in subsection 248(1) of the Income Tax Act. Any service in relation to the clearing and settlement of cheques and other payment items under the national payments system of the Canadian Payments Association that is supplied by the Association or any of its members is prescribed for the purposes of paragraph (m) of the definition financial service in subsection 123(1) of the Act. [Repealed, SOR/2019-59, s. 5] The following services are prescribed for the purpose of subparagraph (q)(ii) of the definition financial service in subsection 123(1) of the Act when supplied by a supplier who provides management or administrative services to a person referred to in paragraph (q) of that definition: the issuance of a financial instrument by, or the transfer of ownership of a financial instrument from, the supplier to the person; the operation or maintenance of a savings, chequing, deposit, loan, charge or other account that the person has with the supplier; and if the person is a trust governed by a self-directed registered disability savings plan, a self-directed registered education savings plan, a self-directed registered retirement income fund, a self-directed registered retirement savings plan or a self-directed TFSA, the arranging for the issuance, renewal, variation or transfer of ownership of a financial instrument for the person. In this section, acquirer, issuer, payment card, payment card network and payment card network operator have the same meanings as in section 3 of the Payment Card Networks Act. The following services are prescribed for the purposes of paragraph (r.6) of the definition financial service in subsection 123(1) of the Act: a service that is supplied by a payment card network operator in its capacity as the acquirer for a transaction made by payment card, and is supplied to the person that accepted the payment card used for the transaction or to a payment service provider (as defined in section 2 of the Retail Payment Activities Act) engaged by that person; a service that is rendered to a holder of a payment card and that is supplied by a payment card network operator in its capacity as the issuer of the payment card; a service, in respect of the settlement of a transaction made by payment card, that is supplied by a payment card network operator, in its capacity as the acquirer for the transaction, to the issuer of the payment card, or by a payment card network operator, in its capacity as the issuer of the payment card, to the acquirer for the transaction; and a service, in respect of the settlement of a transaction made by payment card, that is supplied by a payment card network operator to the acquirer for the transaction and that consists of paying to the acquirer the amount charged to the payment card in respect of the transaction, but only if the issuer of the payment card supplies to the payment card network operator a service, in respect of the settlement of the transaction, of paying to the payment card network operator the amount charged to the payment card in respect of the transaction. In this section, instrument means money, an account, a credit card voucher, a charge card voucher or a financial instrument; (effet) person at risk, in respect of an instrument in relation to which a service referred to in subsection (2) is provided, means a person who is financially at risk by virtue of the acquisition, ownership or issuance by that person of the instrument or by virtue of a guarantee, an acceptance or an indemnity in respect of the instrument, but does not include a person who becomes so at risk in the course of, and only by virtue of, authorizing a transaction, or supplying a clearing or settlement service, in respect of the instrument. (personne à risque) Subject to subsection (3), the following services, other than a service described in section 3, are prescribed for the purposes of paragraph (t) of the definition financial service in subsection 123(1) of the Act: the transfer, collection or processing of information, and any administrative service, including an administrative service in relation to the payment or receipt of dividends, interest, principal, claims, benefits or other amounts, other than solely the making of the payment or the taking of the receipt. A service referred to in subsection (2) is not a prescribed service for the purposes of paragraph (t) of the definition financial service in subsection 123(1) of the Act where the service is supplied with respect to an instrument by a person at risk, a person that is a member of the same closely related group as a person at risk, if the recipient of the service is not the person at risk or another person that is a member of the same closely related group as the person at risk, or an agent, salesperson or broker who arranges for the issuance, renewal or variation, or the transfer of ownership, of the instrument for a person at risk or a person that is a member of the same closely related group as the person at risk. For the purposes of subsection 132(6) of the Act, the following members of an investment limited partnership are prescribed members: a member that is a non-resident trust if the total value of the assets of the member in which one or more persons resident in Canada have a beneficial interest is more than 5% of the total value of the assets of the member; and a member that is a non-resident limited partnership if the total value of all interests in the member held by persons resident in Canada is more than 5% of the total value of all interests in the member. For the purposes of paragraph 149(5)(g) of the Act, an employee life and health trust is a prescribed person. For the purposes of subparagraph 217.1(1)(b)(iv) of the Act, a non-resident trust is a prescribed person if the total value of the assets of the trust in which one or more persons resident in Canada have a beneficial interest is equal to or greater than $10,000,000; and equal to or greater than 10% of the total value of the assets of the trust. Selected listed financial institutions that are investment plans, as defined in subsection 1(1) of the Selected Listed Financial Institution Attribution Method (GST/HST) Regulations, are prescribed for the purposes of subsection 273.2(2) of the Act. Section 6 applies to supplies made on or after November 17, 2005. Section 5 of the Financial Services (GST/HST) Regulations, as enacted by section 18, applies in respect of any specified year, as defined in section 217 of the Excise Tax Act, of a person that begins on or after July 1, 2010. Section 6 of the Financial Services (GST/HST) Regulations, as enacted by section 18, applies in respect of any fiscal year of a person that ends on or after July 1, 2010. Sections 6 and 16 apply in respect of any taxation year of a person that begins after July 22, 2016. Subsection (1) applies to a supply of a service for which any consideration becomes due after March 28, 2023 or is paid after that day without having become due; or all of the consideration became due or was paid before March 29, 2023.