GST/HST Holiday Tax Break

Dear Members,

We want to provide an update on the proposed tax changes and help you make informed decisions for your preparations. While no new updates have been officially released, we’ve engaged with CRA agents, the Ontario Director of Tax and Expenditures, and the Federal Department of Finance to gather as much insight as possible.

The proposals must be approved by the Senate before they take effect.

Here’s what we know so far:

• The proposal is being presented as a tax break for families during the holidays, focusing on restaurants, toys, clothing, Christmas trees, and similar items.
• Vending has been specifically excluded from the outlined categories.
• CRA agents have indicated that there are no current plans to impose penalties on businesses that unintentionally classify themselves incorrectly.
• The CRA’s examples of pre-packaged meals are tied to catering services, which do not align with the operations of unattended retail.

To assist in determining which category your business fits into, consider the following points:

1. Products: Evaluate whether your products align with those included in the holiday tax break theme (e.g., holiday meals, toys, or festive goods). 
2. Sales Channels: Assess whether your sales channels (e.g., vending machines, unattended retail, micro markets) are comparable to those explicitly included or excluded. See the CRA guidelines below.
3. Customers: Reflect on whether your target customer profile aligns with the intent of the tax break.
4. Operational Complexity: Review the feasibility of implementing changes by the December 14th deadline and how your business structure may affect compliance.

From the CRA Website:

CAMA recognises the challenges posed by these changes and will continue advocating for the interests of our members. We encourage you to use the above points as a guide and consult with your tax professionals to ensure your business is appropriately classified.

If you have further questions or require additional assistance, please don’t hesitate to contact us at admin@vending-cama.com.