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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XXXXX: XXXXX
XXXXX
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Case Number: 93865
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October 19, 2007
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Subject:
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GST/HST INTERPRETATION
Foreign Convention and Tour Incentive Program
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Dear XXXXX:
Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies made by the XXXXX industry.
All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified.
XXXXX You have identified two areas of the Foreign Convention and Tour Incentive Program (FCTIP) that are of concern to the XXXXX industry.
Interpretation Requested
1. You understand that the GST/HST rebate for tour packages under the FCTIP can only be applied at point-of-sale if the packages were sold outside of Canada. Therefore, for packages sold from Canada or booked for the following year by clients while they are vacationing in Canada, the clients will have to file the rebate claim. This appears to you to be a change with the rebate. You are asking that the option to apply the rebate at point-of-sale be available for all tour packages sold to non-residents.
2. It is also your understanding that packages with accommodation provided by way of a houseboat are not eligible for a GST/HST rebate under the FCTIP thereby placing providers of these types of packages at a competitive disadvantage to their land-based counterparts. In view of this, it is your recommendation that houseboat packages be included in the FCTIP.
Interpretation Given
Under the FCTIP, non-resident consumers and non-resident non-registered organizations or businesses are able to receive a rebate of up to 50% of the GST/HST paid on a tour package that includes short-term and/or camping accommodation in Canada. Non-residents can receive the rebate by filing a rebate claim with the Canada Revenue Agency (CRA) or they can be paid or credited the rebate amount by a GST/HST registrant.
Paying or crediting the rebate (Question 1)
According to the FCTIP rules in the legislation (subsection 252.1(8)), for a registrant to pay or credit an amount of the tour package rebate to non-resident consumers and non-resident non-registered organizations or businesses that are not tour operators, either:
• payment for the tour package must be made at a place outside Canada where the registrant or its agent is conducting business; or
• a deposit of at least 20% of the total price for the tour package is paid by the non-residents. The deposit must be paid at least 14 days before the first day of eligible accommodation included in the tour package is made available to the non-resident individual.
The deposit must be by credit or charge card, cheque, bank draft, or other bill of exchange, drawn on an account from an institution, such as a bank or credit union, outside Canada. A deposit made by credit or charge card is not considered to have been paid to the registrant until the issuer of the card credits the registrant's account. Deposits paid by debit card are also acceptable.
Of course, the non-resident consumers and non-resident non-registered organizations or businesses, including tour operators, must also meet the general eligibility requirements for the rebate.
These requirements and conditions are the same as those under the previous Visitor Rebate Program, which was cancelled effective April 1, 2007.
Accommodation in a tour package (Question 2)
To be eligible for the GST/HST rebate for tour packages under the FCTIP, a tour package must include short-term and/or camping accommodation in Canada and at least one service. Short-term accommodation and camping accommodation are terms that are defined in the ETA. In particular, short-term accommodation is defined in subsection 123(1).
For the purposes of the FCTIP, short-term accommodation means the rental of an accommodation unit in Canada as a place of lodging for an individual who will occupy it continuously for a period of less than one month and that costs more than $20 per night.
Short-term accommodation includes any type of overnight shelter that is part of a tour package that has food and the services of a guide. However, as you know, certain types of accommodation are not short-term accommodation for the FCTIP. One exclusion from the definition is overnight shelter on a train, trailer, boat or structure that is, or could be, self-propelled. Therefore, a package that provides accommodation by way of a houseboat would not be an eligible tour package under the FCTIP.
The CRA is responsible for the administration of the GST/HST legislation. Matters of tax policy fall within the purview of the Department of Finance. We will ensure that the Department of Finance is aware of your concerns.
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 XXXXX.
Yours truly,
XXXXX
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
2007/10/24 — RITS 95276 — Importation and Supply of the XXXXX