14 LEXPERT
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2018
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WWW.LEXPERT.CA
FINANCIAL SERVICES
A RECENT LANDMARK TAX COURT DECISION
CUTS TO THE HEART OF WHAT CONSTITUTES
A FINANCIAL SERVICE AND POTENTIALLY IMPACTS
EVERY CANADIAN BANK AND CREDIT UNION
THAT ISSUES A CREDIT CARD UNDER ITS NAME
By Sandra Rubin
Is the credit card company Visa a financial service? In a land-
mark decision handed down over the summer, the Tax Court
of Canada held that it is not.
Canadian Imperial Bank of Commerce v. Her Majesty the
Queen, 2018 TCC 109, means at least one major bank will
not be repaid $18 million in GST and HST the bank argues
it wrongly paid Visa Canada on fees it paid the company in
connection with the use of the popular credit card.
e ruling has the potential to impact every Canadian
bank and credit union that issues a credit card under its
name. It raises the question of how credit-card HST or GST
is, or will be, passed along, whether through increased an-
nual card fees, higher rates on unpaid credit card balances,
Taxing
Questions
PHOTO:
SHUTTERSTOCK
