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Fewer tax rebates for tourists

Millions of people from foreign countries visit Canada each year to see relatives and friends, take in the many sights and activities the country has to offer and to conduct business. Tourism is particularly brisk during the summer.

Millions of people from foreign countries visit Canada each year to see relatives and friends, take in the many sights and activities the country has to offer and to conduct business. Tourism is particularly brisk during the summer.

In the past, visitors to the country were able to get rebates from the federal government and some provinces on the tax they paid on many purchases made here in the country.

Many of those programs, however, have been cancelled.

“It appears that only Ontario and Manitoba now have this kind of rebate program,” said Cleo Hamel, senior tax analyst with H&R Block. “Other provinces may have had a program in place years ago, but not anymore. Similarly, the federal government used to have a program for GST rebates for non-residents, but that program has ended as well.”

The federal government announced in 2006 that effective April 1, 2007, it was cancelling its visitor rebate program and creating the Foreign Convention and Tour Incentive Program (FCTIP).

Under the old visitor rebate program, tourists could claim a rebate on the GST paid on many items simply by visiting a tax rebate office while in the country or by sending in a form after they returned home. Eligible goods included most purchases that visitors intended to take home with them.

The FCTIP provides GST and HST (harmonized sales tax) relief to non-resident consumers and non-resident non-GST/HST-registered businesses for short-term and/or camping accommodation in Canada included in a tour package and for certain properties and/or services used in the course of conventions held in Canada.

Generally, the amount of the rebate available is 50 per cent of the GST and/or 50 per cent of the HST paid on the tour package. The rebate calculation is based on the number of nights of short-term and/or camping accommodation in Canada included in the eligible tour package. However, the amount of the rebate is reduced if there is ineligible accommodation in Canada included in the eligible tour package, such as accommodation on a boat or a train.

If you live in Ontario and Manitoba and have friends or relatives from outside the country visiting you this summer, they may be able to claim and receive tax rebates on goods they purchase during their visit.

Visitors to Ontario, for example, are eligible to claim a rebate of the eight per cent provincial retail sales tax (RST) if certain conditions are met.

The goods must be permanently removed from Ontario within 30 days of purchase and the RST paid on each invoice must be $50 or more. The refund claim must be made within four years of buying the goods, and if the goods are removed to another jurisdiction in Canada, proof that all of the applicable tax has been paid to the other jurisdiction must be supplied.

As well, if the goods are purchased for use in a jurisdiction where sales tax is not payable, supporting documentation must be supplied that shows the goods were removed within 30 days.

The rules are similar in Manitoba.

To be eligible for a refund, $50 or more of Manitoba sales tax must have been paid on each purchase being considered for a rebate. The goods must be removed from the province for permanent use outside the country within 30 days of purchase and the receipts must be validated by a land border duty free shop or customer border service office.

As in Ontario, refunds are not available on tobacco, liquor, wine or beer.

Although these programs may not benefit you, they may provide some tax relief for your friends and family from afar.

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. He can be contacted at boggsyourmoney@rogers.com.