Finance Canada on 27 July released proposals which would restrict the eligibility of holding companies to reclaim input tax with respect to GST/HST charged to them on their acquisitions of goods and services. The Federal Government had already indicated in the 27 February 2018 Budget that it intends to review and restrict the rules.
One of the main conditions of eligibility for reclaims of GST/HST input tax is that the person must be engaged in an economic activity. Holding companies the act…