Neil E. Bass

The appellant, Amex Bank of Canada, appealed the reassessments denying input tax credits (ITCs) for GST/HST paid on expenses related to its Membership Rewards Program (MRP).

The appellant argued that the MRP expenses were incurred in the course of making taxable supplies separate from its exempt financial services.

The Tax Court of Canada dismissed the appeal, finding that the MRP elements were inextricably intertwined with the exempt supply of financial services (credit) provided to cardholders and merchants.

As the predominant element of the single composite supply was an exempt financial service, the appellant was not entitled to claim ITCs for the MRP expenses.

The Appellant claimed input tax credits (ITCs) for GST/HST payable on prepaid rent under concurrent leases of motor vehicles.

The Minister disallowed the ITCs on the basis that the Appellant failed to satisfy the documentary requirements under subsection 169(4) of the Excise Tax Act and the related Regulations, arguing that supporting documentation must be issued or signed by the supplier.

The Tax Court of Canada allowed the appeal, holding that the definition of "supporting documentation" in the Regulations is broad enough to include information stored electronically on the recipient's server, and does not strictly require a document issued or signed by the supplier unless it falls outside the enumerated forms.

The Court found the Appellant had obtained sufficient evidence to determine the ITCs.

The appellant orthodontist appealed the Minister's disallowance of input tax credits (ITCs) for the supply of orthodontic appliances.

The Minister argued the patient invoices did not separate the consideration for zero-rated appliances from exempt orthodontic services.

The Tax Court allowed the appeal, finding that the Excise Tax Act unconditionally zero-rates orthodontic appliances and that the appellant's financial agreements, which apportioned 35% of the fee to appliances, met the documentary requirements for claiming ITCs.