Canada Amends GST/HST Law for Loyalty Rewards Following Court Ruling on Input Tax Credits

• Canada is amending GST/HST rules in the Excise Tax Act.
• The amendment follows a Federal Court of Appeal decision.
• The case involved President’s Choice Bank and its loyalty program.
• The issue was about claiming notional input tax credits for redeemed coupons.
• The Tax Court initially ruled against PC Bank, but the Federal Court of Appeal allowed the appeal.
• The draft legislation replaces Section 181(5) of the Excise Tax Act.
• The amendment clarifies that payments must be made exclusively in the course of commercial activities to claim input tax credits.
• The amendment is effective from August 16, 2025.
• New conditions are set for payments to qualify as commercial activities.

Source: fin.canada.ca

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---