<H1> New Canadian VAT Bill</H1>By Cheryl Rosen<H3> U.S. Corporations Will Get Tax Refunds Directly</H3><I>Prince Edward Island, Canada </I>- The Canadian Parliament is expected to soon pass a bill that will allow American corporations to recover the 7 percent GST tax paid on hotel accommodations in Canada, as well as additional GSTs of up to 7 percent from individual provinces.
But to maximize their corporate return, travel and meeting managers will need to take quick action in restraining their travelers from filing for the refund individually, as they have in the past.
The Canadian GST-like the European VAT-is a form of national sales tax. Until now, Canada has allowed non-Canadian individuals and small groups to file for a refund of GST taxes paid on certain goods and services, including hotel charges, as they leave the country. But the bill now winding its way through Parliament will allow corporations to file for a refund on all taxes paid by all their employees in Canada-and to have the check come back to the company, not the traveler.
Lori Cudmore, inquiries clerk at the office of the Visitor Rebate Program, said that the bill "is expected to pass in the next month, and will allow non-resident corporations to file a monthly or annual claim for the tax.
Because the bill was originally dated April 24, taxes charged from that date onward will be refundable once it becomes law. Claims can be made for taxes paid on all hotel stays of less than one month's duration, but not on transportation or meals.
At Euro VAT Refund Inc., a Culver City, Calif., firm that helps corporations file and collect VAT refunds, sales and marketing vice president Karen Bostrom said travel managers should immediately notify their travelers to stop filing individual claims, and begin collecting data and receipts from Canadian hotel stays companywide. Corporations will need to submit original hotel invoices showing a zero balance with their claim forms.
Revenue Canada is already prepared to begin receiving GST tax refund forms, which will be paid when the bill is passed. Bostrom said that the provinces of Quebec and Manitoba intend to refund their respective sales taxes-6.5 percent and 7 percent-in addition to the national refund.
Euro VAT is one of a number of independent firms that file VAT refunds for corporations in exchange for a fee, but companies also can file themselves at no cost. For more information or to obtain forms, call 902-432-5608, or write the Visitor Rebate Program, Summerside Tax Centre, Summerside, P.E.I., C1N6C6, Canada.