ON – Budget expands clearance certificate requirements relating to business bulk sales

Under current rules, someone who sells a business or business assets through a bulk sale can be required to obtain a clearance certificate from the Ministry of Revenue indicating that all taxes, penalties, and interest in respect of provincial sales tax have been paid. Where a clearance certificate is not obtained, the purchaser of those assets can be held liable for any outstanding sales tax amounts.

The budget proposes that, for sales which are completed after June 30, 2011, the clearance certificate requirement will be expanded to apply to other tax liabilities of the seller, including those arising under the Fuel Tax Act, the Gasoline Tax Act, and the Tobacco Tax Act.

Details of the new requirement are outlined in the Ontario Budget highlights Bulletin, available on the Ontario Ministry of Revenue Web site at http://www.rev.gov.on.ca/en/notices/general/0311.html#s06.

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