Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
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XXXXX
XXXXX
XXXXX
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Case Number: 51177
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XXXXX
XXXXX
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September 28, 2004
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Subject:
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GST/HST APPLICATION RULING
Tax status of amount identified as commission on subcontractor's settlement statement
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Dear XXXXX:
Thank you for your fax XXXXX, with attachments, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the amount identified as commission on your "subcontractor's settlement statement" issued to a truck owner/operator performing trucking services for you. Your request has been transferred XXXXX to the Services and Intangibles Unit of the Excise and GST/HST Rulings Directorate for response.
Statement of Facts
Our understanding of the facts is as follows:
1. XXXXX (Company) is a long haul trucking company supplying freight transportation services primarily from Canada to the US.
2. The Company sub-contracts with truck owner operators (o/o) to actually perform the freight transportation services the Company has agreed to provide its clients.
3. The Company and o/o enter into a XXXXX (Agreement) under which the Company agrees to retain the services of the o/o's truck and driver. The Agreement identifies the Company as XXXXX.
4. The o/o of the truck becomes a "dependent contractor" of the Company under the Agreement.
5. The Agreement specifies that XXXXX but does not set out at what rate. It is our understanding that the Company has a verbal understanding with the o/o where the o/o receives a fixed percentage of the amount the Company bills the shipper of the goods on its own account. In most cases this percentage is XXXXX% but has ranged from XXXXX% to XXXXX%.
6. The subcontract's settlement statements (Settlement) provided by the Company to the o/o of XXXXX, for the Month of XXXXX includes the XXXXX% identified as "commission" under the heading Expenses.
7. The Company currently collects and remits GST on the amount identified as commission.
Ruling Requested
You have requested a ruling on whether GST/HST should apply on the amount identified as commission on your subcontractor's settlement statement.
Ruling Given
Based on the facts set out above, we rule that the amount identified as commission on the settlement statement is not consideration for a taxable supply and not subject to tax.
This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 613-952-8814.
Yours truly,
Robert Douthwright, CGA
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
2004/09/13 — RITS 52001 — Eligibility to Apply for a GST/HST Employee Rebate