17 March 1999 General Information Letter HQR0001474 - GENERAL INFORMATION LETTER [Application of the GST/HST to Certificates of Purchases Made on Credit Cards]

Dear XXXXX

This letter is further to our response dated September 28, 1998 (HQR0000702) which had deferred comment on the use of XXXXX[.] Since that time, it has been determined that under the terms of the XXXXX XXXXX currently in effect, credit cards issued to a XXXXX can be used by an employee to purchase airline tickets.

The question you ask in part E of your letter dated April 11, 1997, is whether the certificate provided by a XXXXX certifying that a purchase is being made with XXXXX is sufficient documentation to support the tax-free sale to an individual using a credit card. You state that your current practice is to verify credit card number sequences in order to ensure that purchases are not made using personal credit cards. We assume this is done even when a certification clause is provided. Our concern is that the certification may be provided in a situation where the XXXXX is not liable for the purchase. When an individual purchases a supply from XXXXX using a credit card issued to a XXXXX must obtain sufficient documentation to support that the supply is made to the XXXXX and paid for with XXXXX. To substantiate that the XXXXX is liable for the purchase, it must be clear from the documentation that, under the terms of the credit card agreement, it is the XXXXX that is invoiced for any purchases made by an employee using the credit card. Therefore, a XXXXX, without any other documentation, would not be sufficient for our purposes.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-0370.

Yours truly,

Brent Fleming
Governments Unit
Public Service Bodies and Governments Division
GST/HST Rulings and Interpretations Directorate