Taxable Supplies - Special Cases [CRA website]

Commercial leases

…Property taxes paid by a tenant are to be treated as part of the payment to the landlord for the rental of the real property, even if the tenant pays the taxes directly to the municipality. Therefore, the amount of property taxes payable by a tenant is considered to be part of the rent and is subject to GST/HST in the same way as the amount of rent payable by the tenant. This will be the case whether or not the rental agreement states that the payment of property taxes by the tenant is to be considered as "rent" or "additional rent."

However, if a tenant is directly liable to the municipality for the payment of property taxes, this amount is not subject to GST/HST. ...

Early-payment discounts and late-payment surcharges

If you offer an early-payment discount on credit sales, you have to charge GST/HST on the full invoice amount even if your customer takes the discount. …

Tips and gratuities

…A tip or gratuity that is freely given by a customer, for example, cash not recorded on a bill, is not subject to the GST/HST.

Trade-ins

If you accept used goods in trade for full or partial payment for goods you sell or lease in the course of your business, special rules apply, depending on whether or not the person from whom you are accepting the trade-in has to charge tax on the trade-in.

When the vendor has to charge tax

If the person from whom you accept used goods in trade has to charge GST/HST (for example, if the trade-in is an asset of a registrant's business), two separate transactions occur:

• you purchase the trade-in from your customer; and
• you make a sale or a lease to the same customer.

You have to pay GST/HST on the value of the trade-in, and you have to collect GST/HST on the full price charged for the goods you sell or lease. …

When the vendor does not have to charge tax

A different rule applies for used goods you accept as a trade-in from a person who is not required to charge GST/HST (usually a person who is not required to register for GST/HST). A person may also trade-in a leasehold interest in used goods.

In this case, you generally charge GST/HST on the net amount of the sale or lease, that is, the price of the goods you sell or lease minus the amount you allow for the trade-in. … [S]ee GST/HST Technical Information Bulletin B-084, Treatment of Used Goods.

Warranty reimbursements

Warrantors of goods can claim input tax credits (ITCs) for the GST/HST part of reimbursements they make to warranty holders for goods or services such as repairs covered under the terms of a warranty and provided by a third party. For instance, a warrantor may reimburse a warranty holder when the warranty holder pays for repairs due to an emergency or due to the distance from the warrantor's own authorized repair facility.

The ITC you as the warrantor can claim is based on the part of the total cost that you reimburse the warranty holder. Calculate your ITC using the formula:

A × (B ÷ C)

A is the GST/HST payable by the warranty holder for the goods or services;

B is the amount of the reimbursement; and

C is the cost to the warranty holder of the repair.

You must include with the reimbursement a written statement that a portion of the reimbursement represents GST/HST.