Existing elections will automatically be extended to include operating costs for the 1996 and subsequent taxation years. The current treatment of reimbursements by a person receiving an employee or shareholder benefit is complex and requires detailed record-keeping and adjustments for relatively small amounts of tax. Currently, where an employee reimburses an employer for a supply that gives rise to an employee benefit, the reimbursement is considered to be a tax-included payment. The employer must then remit the tax in its return for the period in which the reimbursement is received. This amount is subsequently deducted from the tax remittance on the benefits for the reporting period that includes the last day of February.
Similar rules apply to reimbursements by shareholders.
The treatment of reimbursements will be simplified. Amounts reimbursed by employees and shareholders will be aggregated throughout the year. For employees, the tax considered to have been collected on the reimbursement as well as the federal sales tax calculated on the benefit will both become payable at the end of February of the following year or, in the case of shareholders, at the end of the taxation year of the corporation. This measure is effective for the 1996 and subsequent taxation years. Seizures and repossessions Seizures and repossessions under federal or provincial laws The existing seizure and repossession provisions do not outline the specific treatment to be applied where a seizure or repossession is exercised under federal or provincial laws.