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Tax rebates for tourists

Visitors to Canada spent a whopping $3.7 billion in 2005 according to Statistics Canada. That would amount to a sizeable refund if all those tourists knew about the visitors' tax rebate program.

Although Canadians themselves pay provincial sales taxes and a national goods and services tax on almost everything they buy and never get one cent of it back, visitors to the country can claim a Goods and Services Tax, or GST, rebate on many things purchased by visiting a tax rebate office while in the country or sending in a form after they return home.

So, if you're entertaining international friends or family in the near future, make sure they know about the rebate program. With the fast, easy rebate program, they'll be able to save money on taxes and buy more souvenirs for the folks at home.

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How the rebate program works
GST is a seven-per cent federal sales tax that is charged on a wide variety of products and services. In some provinces where the GST is lumped together with the provincial sales tax and referred to as the Harmonized Sales Tax, or HST, including New Brunswick, Nova Scotia and Newfoundland and Labrador, visitors may receive a rebate for both taxes to the tune of as much 15 per cent.

The visitors rebate tax program is administered through the Canada Revenue Agency. According to media relations agent Beatrice Fenelon, all major cities have an official tax rebate office tourists can visit for a refund. Canadian duty-free stores at airports and border crossings also offer instant rebate services. All you need are your receipts.

There are also private refund companies that may offer to file a rebate application on your behalf for a fee, such as the National Tax Refund office in Toronto's Eaton Centre, but which are not associated with the CRA.

If you opt to claim your rebate after you return home, you simply have to fill out a form and send it in with the receipts of the items you purchased. Many hotels and duty-free gift shops have the forms, but you can also find them online. It typically takes four to six weeks to receive your money if you go the mail route.

Eligible goods
In 2004, more than 38,845 visitors to Canada participated in the visitors' rebate program according to the CRA, with the majority of those being Americans. On average, visitors receive a rebate between $60 and $80.

Eligible goods include most purchases that you intend to take home with you. So, meals and services such as dry cleaning aren't eligible. Neither are car rentals, entertainment expenses (such as movie tickets or ski lift tickets), alcohol and tobacco products.

You also can't claim a tax rebate on small items. According to the Fenelon, "each receipt has to be over $50 and the total of the receipts has to be $200."

Here are some other tips to keep in mind when trying to clam a GST refund:

  • The goods you purchased must be for use outside of Canada.
  • You must retain and be ready to surrender the original receipts -- photocopies and debit or credit card receipts are not accepted.
  • You must have what the CRA calls proof of export -- proof that you sent or took the goods out of Canada within 60 days of buying them. Proof can include your plane ticket home, a postage receipt, etc.
  • You must file a rebate claim within one year of when the items were exported from Canada.

Tour packages bought through an agent or otherwise are eligible for a rebate equal to half the tax amount on the receipt. You can also claim taxes paid for short-term accommodations for fewer than 30 days, be it a hotel room or a camping spot, provided you paid for less than one month of continuous occupancy and you have a receipt that shows the number of nights for which you paid.

Keep in mind that if you haven't spent at least $200 in combined accommodation and goods, you aren't eligible for a rebate. So, have the receipts for your goods stamped as proof of export and use them next time you visit.

Before you leave
Before you can claim a single penny, make sure to get your receipts stamped by a customs officer at the airport. If you leave by ferry and don't have your receipts validated, send in your air ticket as proof of export when you submit your rebate form.

For more information, check out the CRA's information on GST refunds for visitors.

Melanie Chambers is a freelance writer based in London, Ont.

-- Posted: April 26, 2006
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