18 February 1994 GST/HST Interpretation 11690-12[1] - GST Registration — Rental of Property

Dear Sirs:

Your letter of September 13, 1993, addressed to our International Tax Office has been forwarded for our reply. We understand that XXXXX of your firm has been contacted and informed that this office would be writing to you.

Your concern is whether GST applies on the rental of property and/or buildings by a commercial business where the gross rental revenue is less than $30,000 annually. The Excise Tax Act provides that every person who makes taxable supplies in Canada in the course of a commercial activity engaged in by the person in Canada, must register for the GST unless the person is a small supplier or a non-resident person who does not carry on business in Canada. This means that a person (individual, partnership, corporation etc.) operating a business in Canada must register for the GST unless the total revenues (sales rentals, etc.) of that business from the provision of taxable goods and services are less than $30,000 in any four consecutive calendar quarters (small supplier threshold). The threshold of $30,000 is determined from the total of all such revenues. For example, if your business sells equipment and also rents equipment and/or buildings, revenues from both of these two business activities combined must be less than the threshold amount for the business to be a small supplier. If sales revenues were, for instance, $20,000 and rental revenue was $15,000, the total taxable revenues would exceed the threshold and, therefore, the business would not be a small supplier and would have to register for the GST.

If your company has not yet registered for the GST, and it is determined that it should do so, you should contact the XXXXX District Office at the following address:

XXXXX

If you have any questions or require additional assistance please contact Gerry O'Reilley at (613) 954-4397.

Sincerely,

H.L. Jones
Director
General Tax Policy
Policy and Legislation
Excise/GST

XXXXX