On May 17, 2019, the Minister of Finance published proposed amendments to the GST/HST portion of the Excise Tax Act. Notable among the proposed amendments is the inclusion of “virtual payment instrument” in the definition of “financial instrument”. A virtual payment instrument is essentially a pure payment token or cryptocurrency asset, such as Bitcoin. The amendment, if enacted, would mean that entities which supply payment tokens would generally not be required to charge and collect GST/HST on those supplies. There are exclusions for coins/tokens which confer a right to be exchanged for money or specific property or services (e.g., utility tokens), as well as those primarily for use within a gaming platform or affinity or rewards program (or similar platforms/programs).
Other amendments include the expansion of input tax credits available to inactive holding corporations, partnerships, or trusts who own units or shares of an active subsidiary corporation. Currently, only parents which are corporations or trusts can claim input tax credits based on the subsidiary corporation’s activities.