Key indirect tax issues impacting P3 infrastructure

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Driven by the growing needs of the general public for services and the need to balance revenue and expenses, governments are not only endorsing the use of public private partnerships ("P3"), they are embracing P3s as an innovative means to ensuring the government delivers its mandate in a cost effective manner.

While there is a strong business case to select a P3 structure over a traditional method for procuring infrastructure, both the public and private sectors must endeavor to ensure that the obligations and responsibilities of each party are clearly articulated and that the payment mechanisms are based on performance with the satisfactory delivery of the required services.

The following publication, written by PwC's Shawna Hansen, discusses some of the indirect tax issues involved in P3 arrangements in Canada. These issues include P3 agreements and risk transfer, the impact of a reciprocal tax agreement on a P3, additional GST issues for the private sector and tax rate changes.