tag:blogger.com,1999:blog-4622776924781844427.post4946133582393341957..comments2024-03-23T13:43:27.051-04:00Comments on Tax, Society & Culture: New series of papers on why government can and should bring financial services into the tax baseAllisonhttp://www.blogger.com/profile/16733465339926078146noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4622776924781844427.post-27706218696529062082013-07-20T23:29:22.913-04:002013-07-20T23:29:22.913-04:00http://www.newswire.ca/en/story/1197925/rccaq-welc...http://www.newswire.ca/en/story/1197925/rccaq-welcomes-the-finance-minister-s-tax-harmonization-mitigation-measures<br /><br />The Regroupement des cabinets de courtage d'assurance du Québec (RCCAQ) welcomes the measures announced yesterday by Nicolas Marceau, Quebec's Minister of Finance and the Economy, aimed at mitigating the negative impacts of QST/GST harmonization, which went into effect on January 1, 2013. These measures include abolishing the compensation tax and introducing a temporary refundable tax credit for damage insurance brokerages. <br /><br />"Quebec-based brokerages, most of which are small businesses, have been hard hit by QST harmonization, which represents an additional operating cost of nearly 10% of their taxable expenditures. We are relieved that Mr. Marceau realized the full implications of this situation and took concrete measures to rectify it," said RCCAQ chair Michel Duciaume. <br /><br />Since the beginning of the year, brokerages had no longer been able to claim a refund of the QST they pay on purchases of goods and services they need to carry out their activities; this refund policy had been in place for nearly 20 years. That was one of the insidious effects of the QST/GST harmonization agreement signed in October 2012. <br />Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-40271564326700986222013-07-20T23:28:27.276-04:002013-07-20T23:28:27.276-04:00This very issue is playing out right in your neigh...This very issue is playing out right in your neighborhood at the moment. Canada is one of the only countries with a VAT to partially include financial services in its VAT base. It does so by denying input tax credits to most financial services companies considering financial services to be exempt not zero rated(Like college tuition at McGill is other than the fact banks don't get a MUSH/MASH GST/HST rebate like McGill does). Input tax credits are only available to the limited degree that financial services are being "exported" by a particular registrant outside of Canada. This system is replicated in Ontario and the Atlantic provinces where provincial VAT's(HST) have been introduced under the aegis of Ottawa and CRA. Quebec however, since the introduction of the GST in 1991 has had its own VAT tax called TVQ. TVQ since instead of following Canadian practice of denying ITC's choose to follow global practice of making financial services zero rated.<br /><br />In the past few years(2010) after Ontario harmonized with the GST with heavy federal financial compensation Quebec which had never received such compensation for the original introduction of TVQ cut a deal with Ottawa to receive similar funding. One condition of Ottawa was while the TVQ could remain a "separate" tax Quebec would have to switch to the "Canadian" system of not zero rating financial services. Some Quebec insurance broker though are not particular happy with this as the below link shows.<br /><br />http://www.newswire.ca/en/story/1197925/rccaq-welcomes-the-finance-minister-s-tax-harmonization-mitigation-measuresTimhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.com