On November 21, 2024, the Prime Minister announced a two-month long GST/HST tax holiday in respect of the sale of a select list of goods. The intent was to provide relief for Canadian consumers during the winter holiday season. Also, by extending the period to mid-February, this provides an opportunity to assist businesses during what is usually a slow period following the extensive spending that occurs up until the latter part of December.
The proposed legislation received Royal Assent on December 12, 2024, just in time for the proposed start date of December 14, 2024. The holiday is set to end on February 15, 2025. The following items are subject to the tax holiday:
- Children’s clothing, footwear, diapers, car seats and select toys
- Print newspapers
- Printed books
- Christmas trees
- Prepared foods and restaurant meals (including take-out etc.)
- Snack foods and alcoholic beverages (excluding spirits but including wine, beer, ciders, and spirit coolers up to 7 per cent ABV)
- Video-game consoles, controllers or physical game media
Vendors of these goods will need to obtain a clear understanding of what goods are subject to this relief and will need to ensure their systems are able to handle the change. CRA has published detailed guidance about the holiday which can be found here: GST/HST break – Canada.ca.
Thankfully, CRA’s expectations are such that businesses who make reasonable efforts to comply with the legislation will not be the focus of CRA compliance actions. However, CRA will be on the lookout for businesses who willfully and egregiously refuse to comply with the temporary measures, such as a business that collects the GST/HST and does not remit it to the CRA.
Customers that have been charged GST/HST in error and are not able to recover the overpayment from the supplier will have the opportunity to claim a rebate from CRA as long as the claim is for at least $2 and is claimed within 2 years of the overpayment.
