GST Implications of Trading Motor Vehicles

For individuals or partnerships registered for GST/HST purposes.

GST/HST must be collected on the trade-in value of any passenger vehicle used 90% or more for commercial purposes. GST/HST must also be collected on the trade-in value of any motor vehicle (not just passenger) used 50% or more for commercial activities.

For Corporations registered for GST/HST purposes.

GST must be collected on the trade-in value of any passenger or motor vehicle used 50% or more for commercial purposes.

In the above cases, both the customer and the dealer involved in the transaction may claim their respective Input Tax Credits (ITC).

“At least eighty percent of millionaires are self-made. That is, they started with nothing but ambition and energy, the same way most of us start.” — Brian Tracy