Financial services are generally an exempt supply for which no
GST/HST would be charged. The supplier of the financial services
would also not be entitled to claim input tax credits (ITCs) for
any GST/HST incurred on their inputs.
The exempt status of financial services is a significant cost
for many banks, credit unions, investment funds, and other
financial institutions. It also catches many unsuspecting
non-financial institution suppliers as well.
There is a comprehensive definition of "financial
services" in s. 123 of the Excise Tax Act (ETA),
from (a) to (m), and includes such services as:
- the exchange, payment, issue, receipt or transfer of money,
whether effected by the exchange of currency, by crediting or
debiting accounts or otherwise,
