In Zomaron Inc. v. The Queen, the Tax Court of Canada (TCC) clarifies the meaning of “arranging for” a financial service for GST/HST exemption purposes, which is a key provision in the Excise Tax Act relied upon by various service providers and industries. Zomaron also provides important guidance on the application of GST/HST to merchant service providers and other businesses that provide marketing, administrative, or promotional services as part of facilitating or arranging for financial services.
In 2018, the TCC released the Applewood decision that interpreted the meaning of “arranging for” a financial service in the context of the sale of insurance products by a car dealership. Applewood, and now Zomaron, highlight the Canada Revenue Agency’s continued focus on auditing and challenging financial intermediaries that claim their services are a GST/HST-exempt financial service as opposed to taxable promotional, advertisement, or administrative service.
Source: blg.com
