Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Client]
[Client Address]
Attention: [Client]
Case Number: XXXXXX
November XX, 2023
Dear [Client]:
Subject: Rebate on the export of a subject vehicle
Thank you for your letter dated [mm/dd/yyyy], concerning the application of the Select Luxury Items Tax Act (the Act) as it pertains to the rebate of luxury tax on the export of a subject vehicle.
STATEMENT OF FACTS
Based on your letter, the following is our understanding of the facts provided:
1. A brand new motor vehicle is exported.
2. The individual or business exporting the motor vehicle is unregistered.
INTERPRETATION REQUESTED
You would like the Canada Revenue Agency (CRA) to confirm whether an unregistered individual or business can apply for a refund of the luxury tax paid on the export of a subject vehicle.
DECISION
The luxury tax applies to vehicles that meet the definition of “subject vehicle” under the Act and that are priced above the $100,000 price threshold.
Under the Act, the vendor of the subject vehicle is generally the person who is liable for the luxury tax on the sale of a subject vehicle priced above the price threshold. Accordingly, any relief from the luxury tax is generally only available to the vendor who would have been liable for the luxury tax if the tax relief had not been available.
When a subject vehicle is sold to a purchaser by a vendor and the purchaser exports the subject item, a rebate of the luxury tax is payable to the vendor if:
* the vendor is a registered vendor for the purposes of the luxury tax;
* the purchaser is not a registered vendor for the purposes of the luxury tax;
* the luxury tax on the sale was payable and reported by the vendor;
* the subject vehicle was not used in Canada before being exported;
* the subject vehicle was not registered with the Government of Canada or a province before being exported;
* the purchaser exports the subject vehicle as soon after the sale is completed; and,
* the purchaser provides to the vendor, and the vendor retains, evidence satisfactory of the exportation of the subject vehicle by the purchaser.
An unregistered individual or business that purchases and exports the subject vehicle cannot apply for the rebate. The registered vendor from whom the subject vehicle was purchased has two years in which to apply for the rebate on export, and must do so on form B500, Luxury Tax and Information Return for Registrants.
The vendor may pass the savings of the luxury tax to the purchaser, by excluding an amount equal to the luxury tax from the purchase price of the subject vehicle.
I trust the above is satisfactory. If you have any questions or concerns, please contact me at 343-572-4194.
Yours truly,
Alfonso Capretta
Acting Manager
Luxury Tax Unit
Excise Tax and Fuel Charge Division
Excise and Specialty Tax Directorate
Legislative Policy and Regulatory Affairs Branch
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