6 December 1999 GST/HST Interpretation 8405 - Non-Resident Registrant

Dear XXXXX

Thank you for your facsimile of 4 November 1999 (which is dated 6 October 1999). We are pleased to issue you the following interpretation which covers the application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) under the Excise Tax Act (the "Act) to the situation set out in your facsimile. As stated in your facsimile, a non-resident corporation has obtained a Business Number for one of its divisions.

Interpretation Requested

Does this registration cause any other divisions of the corporation to be considered a registered person for the purposes of the Act. More particularly, would supplies made in Canada by the non-resident corporation fall outside of the deeming provision in subsection 143(1) as a result of subparagraph (b) of that subsection.

Interpretation Given

Section 240 of the Act deals with "persons" who are either required (subsection 240(1)) or permitted (subsection 240(3)) to be registered under the Act. "Person" means an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or a body that is a society, union, club, association, commission or other organization of any kind. The definition does not cover branches or divisions within a corporation. Therefore, for the purposes of registration, it is the corporation that should be seen as the registered person, rather than individual branches or divisions within that corporation.

As a registered person, supplies made in Canada by the non-resident corporation are not considered to be made outside of Canada as a result of paragraph 143(1)(b) of the Act.

Under subsection 132(2) of the Act, a non-resident person who has a permanent establishment in Canada is deemed to be resident in Canada, but only in respect of the person's activities that are carried on through that establishment. Therefore, supplies made to/by the permanent establishment of the corporation are deemed to be made to/by a resident. Similarly, where a resident in Canada has a permanent establishment outside Canada, the activities of that establishment are deemed to be those of a non-resident under subsection 132(2) of the Act. Therefore, supplies made to/by the permanent establishment outside Canada are deemed to be made to/by a non-resident.

Subsection 132(2) of the Act does not make the non-resident corporation, as a whole, a resident for the purposes of the Act. Further, it does not serve to alter the status of the corporation, as a whole, as a registered person for the purposes of the Act.

Finally, we would draw your attention to section 239 of the Act, which deals with separate returns by branches or divisions. In general, a registrant will be required to file one GST/HST return for each reporting period covering all of the registrant's commercial activities. However, under section 239 of the Act, the registrant may apply for authority to file separate returns for branches or divisions which have distinct separate operations. Where the requirements of section 239 are satisfied, that is, the divisions or branches have separate accounting systems and are separately identifiable by virtue of their activities or locations, the registrant may be authorized to file separate returns in respect of the specified branch or division. This section does not change the status of the corporation as a registered person under the Act.

As you know, as of 1 November 1999, Revenue Canada became the Canada Customs and Revenue Agency (CCRA).

The foregoing comments represent our general views with respect to the subject matter of your request. Unannounced or future amendments to the Act may result in changes to this interpretation. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the CCRA with respect to a particular situation.

Please do not hesitate to contact me directly should you have any further questions or concerns respecting any of the above at (613) 952-8812.

Yours truly,

David Liston
Border Issues Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate