Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 78319
Business Number: […]
March 24, 2014
Dear [Client]:
Subject: GST/HST INTERPRETATION
Supply of publications by non-resident publishers
Thank you for your letter concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of publications by non-resident publishers. We apologize for the delay in providing a response.
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island (effective April 1, 2013) and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand that you represent […] non-resident publishers who are registered for GST/HST purposes and supply publications to customers in Canada. The publications are contained in cartons that are pre-addressed and labelled with the publishers’ business numbers and are sent to Canada for distribution. The publishers collect GST/HST in respect of the supplies of publications and GST is being collected by the Canada Border Services Agency on the importation of the publications.
RULING REQUESTED
You have requested whether the importations of the publications are non-taxable.
INTERPRETATION GIVEN
As outlined in GST/HST Memoranda Series 1.4, Excise and GST/HST Rulings and Interpretations Service, a GST/HST ruling is a written statement the Canada Revenue Agency (CRA) provides to a taxpayer that sets out the CRA’s position on how the relevant provisions of the legislation apply to a clearly defined fact situation of the taxpayer. The CRA will issue a ruling only when all of the relevant facts of a transaction or series of transactions are provided. Therefore, we are providing you with an interpretation in respect of your ruling request.
Whether GST/HST is required to be collected in respect of supplies of imported publications, and whether the importation of publications is non-taxable, depends on a number of conditions in various provisions being met.
GST/HST generally applies to taxable supplies of property and services where those supplies are deemed to be made in Canada pursuant to the place of supply rules described in subsection 142(1), while supplies of property and services deemed to be made outside Canada pursuant to subsection 142(2) will generally not be subject to GST/HST. However, for GST/HST purposes, section 143.1 overrides the place of supply rules under subsection 142(2) by deeming supplies of prescribed tangible personal property to be made in Canada if the property is supplied by a person who is registered for GST/HST and is sent, by mail or courier, to the recipient of the supply at an address in Canada. The tangible personal property that is prescribed for purposes of section 143.1 is set out in the Publications Supplied by a Registrant (GST/HST) Regulations (the Regulations) and generally includes property such as books, newspapers, magazines and similar printed publications.
Subsection 240(4) deems certain suppliers of the prescribed publications to be carrying on business in Canada and requires that they be registered for GST/HST purposes. Specifically, this provision applies to every person (other than a small supplier), whether or not resident in Canada, who, in Canada, whether through an employee or agent or by means of advertising directed at the Canadian market, solicits orders for the supply by the person of, or offers to supply, publications that are prescribed property for the purposes of section 143.1 and that are to be sent by mail or courier to the recipient at an address in Canada.
The supplies of the prescribed publications by the registered supplier that are sent by mail or courier to the recipient at an address in Canada are deemed to be made in Canada under section 143.1 and the supplier is consequently required to collect the GST/HST payable by its customers in respect of those supplies. In this case, the importation of the prescribed property will qualify as a non-taxable importation under section 7.1 of Schedule VII, if the supplier provides evidence of its GST/HST registration in accordance with the Regulations.
The Regulations require the supplier to provide evidence of its registration on the publications and outline ways in which the supplier is to provide the evidence; for example, the supplier could provide evidence of its registration by providing its GST/HST registration number in the masthead of the publication. If the supplier of the prescribed publications does not provide proof of registration upon importation of the publications, tax will be imposed in respect of the importation. Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents, available on the CRA’s website, provides additional information with respect to the acceptable proof of registration.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4291. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Geoff Macmillan
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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