June 26, 1995
File 11842-8
XXXXX
Dear XXXXX
This is in response to your enquiry of May 25, 1995, addressed to the Diplomatic Liaison Services Officer, regarding the purchase of a duty free automobile by a member of a NATO force. In your letter, you ask for clarification on which taxes may be legally remitted on such a purchase.
Prior to 1991, relief from excise taxes, customs duties and federal sales taxes was granted to members of visiting forces on domestic purchases of vehicles for personal use. However, the federal sales tax was replaced with the Goods and Services Tax (GST) effective January 1, 1991, and no relief from payment of the GST was provided for domestic purchases of vehicles for personal use by members of visiting forces. The Visiting Forces (Part IX of the Excise Tax Act) Remission Order affords relief from GST to visiting force units on the purchases of goods in Canada for official use only.
The payment of "customs duty" and "excise taxes" are relieved by the use of DM-3 certificates such as those which were issued to XXXXX by the Diplomatic Liaison Services Officer May 2, 1995, on behalf of NATO members in your training unit wishing to purchase new motor vehicles in Canada. The "excise taxes" to which the certificate refers apply to a) tax on an air conditioning unit installed in a vehicle and/or b) tax on a vehicle which exceeds standard weight specifications. An auto dealer who has proof that he did not charge those duties or taxes on the sale of a new motor vehicle to a NATO member can recover those amounts from our department by submitting the required documentation.
You have also asked about the use of the term "sales tax" in Customs Memorandum D21-3-4 of June 1986. This term refers to the "federal sales tax" (FST) which was in effect at that time. The reference is not valid for the purposes of the Goods and Services Tax (GST) which took effect on January 1, 1991. A member of a NATO force is subject to the payment of the GST on the purchase of a vehicle in Canada. Should an automobile dealer fail to charge the GST to a NATO member on the sale of a new motor vehicle, the dealer would nonetheless remain accountable for the collection of the tax from the purchaser.
If you have further questions about this matter, please contact Joanne Hoople, Policy Officer, at (613) 952-8533. If you have questions about the eligibility of NATO forces and their personnel to receive GST relief on the acquisition of supplies or services, please contact XXXXX
Yours sincerely,
Marilyn Viger
Manager
Governmental Sectors, Federal-Provincial Relations
GST Rulings and Interpretations
Policy and Legislation
XXXXX
Val Morin,
Diplomatic Liaison Officer
XXXXX
Ethel Regimbald,
Tariff Programs, Customs
XXXXX
Joanne Hoople [Domus 2236] XXXXX
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