Précis: The taxpayer operated a form of loss protection plan which enabled drivers whose vehicles were the subject of a partial or total loss (it is not clear from the decision whether “loss” covered theft) to receive a new vehicle from the dealership where they purchased the original vehicle. In effect, the plan topped up the payment received from the vehicle’s primary insurer, which was limited to the depreciated value of the vehicle. The taxpayer claimed ITCs on the basis that it was a form of “warranty” program within the provision of section 175.1 of the Excise Tax Act (the “ETA”). CRA denied the ITCs on the basis that the plan was a form of “insurance” which was specifically carved out of section 175.1. The Tax Court found that the plan operated as a form of insurance, not a warranty, and dismissed the appeal with costs.
Le Groupe PPP v. R. - TCC: No ITCs on form of car loss protection plan - not a “warranty”READ MORE »