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Is invoice discounting in a debt factoring arrangement subject to GST?

April 26, 2017Arrangement debt discounting factoring GST invoice Subject

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Is invoice discounting in a debt factoring arrangement subject to GST?

1 Answer

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10 Posted

The discount charged is consideration for the acquisition of an interest in an assigned debt. The acquisition of an interest in the debt is a financial supply under Item 2 of subregulation 40-5.09(3) and is input taxed. The discount fee will not be subject to GST.