Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Client Address]
Case Number: 247952
Business Number: […]
Dear [Client]:
Subject: GST/HST interpretation - Sales of event tickets […]
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to the sales of event tickets […]. […].
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The Government of Nova Scotia has proposed to decrease the rate of the HST from 15% to 14% effective April 1, 2025. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Based on the information provided […], we understand the following:
1) […] ([…][Seller]) purchases event tickets through the Internet […]. The events could take place both inside Canada, in various provinces, and outside Canada. These tickets are single events (for example, a concert). [Seller] subsequently places these tickets for sale using […][Company]’s platform accessed through their website […].
2) [Seller] was not registered for GST/HST purposes as of the time of your incoming letter ([mm/dd/yyyy]). However, […] [Seller] is now registered for GST/HST purposes […].
3) […] ([Company]) is a […] corporation based […][outside Canada]. [Company] operates a […] platform ([Company]’s Platform). It allows users (the Seller, […]) to list or post their tickets across multiple ticket marketplace platforms […] simultaneously and manage inventory, sales, purchases, payments and order fulfillment. When a ticket is sold on one such ticket marketplace platform, [Company] will automatically remove the listing from all other platforms to prevent double selling.
4) [Company]’s Terms of Service ([Company]’s TOS) govern the contractual relationship between [Company] and its users (the Seller) regarding the use of [Company]’s Platform. […]. The following are key provisions of the [Company]’s TOS:
“[#]. […], upon completion of […][Seller’s] registration and [Seller’s] payment of the applicable Fees, [Seller] may […], use the […][Platform](footnote 1) […].
[#]. [Seller] will be required to register for an account […].
[#]. [Seller] [is] solely and exclusively responsible for all actions [Seller] take[s] in response to [Seller’s] usage of the [Platform] […].
[#]. [Company] [is] not responsible or liable for [Seller’s] reliance upon, or use of, the [Platform], […].
[#]. When listing a Ticket, [Seller] must set a price […]. [Seller] may modify […] or delete [Seller’s] listing at any time […].
[#]. By listing a Ticket for sale, [Seller] is making a binding offer to sell that Ticket to a Buyer […]. When a Buyer accepts [Seller’s] offer […], [Seller] [is] contractually bound to deliver that exact Ticket. […] within the required delivery timeframe. […].
[#]. [Company] does not guarantee that [Seller’s] tickets […] will sell or that [Seller’s] listing will appear on all […] linked and related […][websites]. […].
[…]
[#]. [Seller] agree[s] that [Seller] will not offer ticket listings for tickets that [Seller] do[es] not have possession. […].
[#]. [Seller] agree[s] and acknowledge[s] that [Company] may charge [Seller] service fees, […].
[#]. If the tickets are not provided to [Company] after they have sold, [Seller] agree[s] to pay […] damages […] equal to the cost of obtaining […][replacement tickets] […].
[#]. If [replacement tickets] are not obtainable, [Seller] agree[s] to pay all penalties charged […] for the unfulfilled sale.
[#]. If the tickets provided are deemed to be invalid […], [Seller] agree[s] to pay all penalties charged […].
[…]
[#]. […], [Seller] will pay […] Fees, […] in connection with being provided valid access to the [Platform].
[…]
[#]. Fees are deducted from the completed transactions that [Seller] enter[s] into. [Seller] will be paid the value of the transaction minus any applicable Fees. […].
[#]. Payment methods are processed and handled through third-party payment processors. Payment methods are subject not only to these terms, but also the terms and conditions of these third parties pursuant to [Seller’s] contractual relations with them. […].
[…]
[#]. […]. Company grant[s] [Seller] a limited, conditional, […] license to view or use this [Platform], […].
[#]. […] The relationship of the parties hereto is strictly that of independent contractors, and neither party is an agent, partner, joint venturer or employee of the other.”
5) […] the […][Payment Processor]’s Terms of Service ([Payment Processors]’s TOS)) […] governs the contractual relationship between [Payment Processor] and its users (i.e., both [Seller] and [Company]) regarding the use of the payment services. […]. Pertinent provisions of the [Payment Processor]’s TOS are provided, in part, as follows:
“[#]. […]. [Payment Processor] provide[s] the payment services and related […] support […] (collectively the “Services”) to [Payment Processor]’s business customers (each a ”Payor”(footnote 2)) who desire to make payments to […] payees, like [Seller] (a “Payee”(footnote 3)).
[…]
[#]. […]. By registering to use the Services, […], [Payee] accept[s] all of the terms and conditions contained in [Payment Processor’s] [TOS], […].
[…]
[#]. […]. The Services allow [Payee] to receive payments from and as directed by […] Payor
[#]. […][Payee’s] primary interface with the Services is through a […] technology portal which may be accessed through a website, […] (the “[Payment Portal]”). […]. The [Payment Portal] is part of the Services.
[#]. To be eligible to use the Services, [Payee] must be a designated payee of a Payor […].
[#]. To receive the Services, [Payee] must complete the registration process by providing current, complete and accurate information […].
[…]
[#]. In delivering the Services […], [Payment Processor] acts as [Payee’s] receiving agent to accept payments […] on [Payee’s] behalf and remit those payments to [Payee]. […], [Payment Processor] […] does not have any liability with respect to any of the products, services, or activities for which [Payee] receive[s] payment […].“
6) […] in the chain of transactions leading to the sale of the tickets to the buyer, [Company] is generally involved in the collection of the payment from a buyer, the remittance of the payment to […] (the Seller), and the delivery of the tickets to the buyer.
7) […], [Company] charges a fee of […]% of total sale. The total sale is defined as the amount paid to [Company] by the third-party ticket […][marketplace platform] through which the ticket was sold, after the deduction of any applicable fees imposed […]. These fees are deducted from [Seller’s] payout by [Company].
RULING REQUESTED
You would like to know how the GST/HST applies to [Seller’s] supplies of admission using [Company]’s Platform considering the digital economy environment [Seller] [is] operating in.
As noted in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, a ruling provides the Canada Revenue Agency’s (CRA) position on specific provisions of the legislation as these relate to a clearly defined fact situation of a particular person, and where all of the relevant facts and supporting documentation have been presented in writing. As we are not in possession of all of the pertinent facts, we are unable to provide a ruling. However, we are pleased to provide an interpretation of the relevant ETA provisions for your assistance.
INTERPRETATION GIVEN
Generally, all supplies made in Canada are either taxable or exempt. Taxable supplies are supplies made in the course of a commercial activity and may be taxable at the rate of 5% GST, 13%, 14% or 15% HST (where applicable), or 0% (zero-rated supplies) on the value of consideration for the supply. Zero-rated supplies are listed in Schedule VI while exempt supplies are identified in Schedule V. There are no exemptions that would apply to the present case.
Supplies of admission
Pursuant to subsection 123(1), a “supply” includes the provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition.
A “property” means any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share and a chose in action, but does not include money. An “admission” in respect of a place of amusement or a seminar, an activity or an event, is defined in subsection 123(1) to mean a right of entry or access to, or attendance at, the place of amusement or the seminar, activity or event.
Generally, the supply of an admission to an event (for example, the sale of a ticket for a concert) is a supply of intangible personal property (IPP).
For more information and confirmation of the IPP status, please refer to example 4 of the GST/HST Memorandum 3-3-5, Place of Supply in a Province - General Rules for Intangible Personal Property.
Pursuant to subparagraph 142(1)(c)(i), a supply of IPP is deemed to be made in Canada if the property may be used in whole or in part in Canada. Therefore, a supply of admission to a concert or sporting event being held in Canada is deemed to be made in Canada.
The rate of tax applicable to a particular taxable supply made in Canada is based on where in Canada the supply is determined to be made. A taxable supply of IPP made in Canada is subject to GST at the rate of 5% (or HST at a rate of 13%, 14% or 15% when made in a participating province: Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia or Prince Edward Island) unless the supply is zero-rated (taxed at 0%).
Additionally, where a taxable supply of IPP is determined to be made in Canada and is not zero-rated, a further analysis with respect to the province in which the supply is made or deemed to be made is necessary to determine the appropriate rate of tax.
The ETA has various rules to determine whether a supply that is made in Canada is made in a province. Under section 144.1, a supply that is made in Canada is deemed to be made in a particular province if it is determined to be made in the province under the place of supply rules in Schedule IX. Pursuant to section 3 of Part IX of Schedule IX, notwithstanding the rules in any other Part of Schedule IX, a supply is made in a province if the supply is prescribed to be made in the province. Prescribed supplies for purposes of section 3 of Part IX of Schedule IX are contained in the New Harmonized Value-Added Tax System Regulations (the Regulations). Generally, the relevant place of supply rules for supplies of IPP made in Canada are included in sections 6 to 8 of the Regulations.
In particular, subsection 6(1) of the Regulations states that a supply of IPP (other than IPP that relates to real property or to tangible personal property) of which the Canadian rights(footnote 4) can only be used primarily (that is, more than 50%) in participating provinces will be deemed to be made in a participating province if an equal or greater proportion of those Canadian rights cannot be used in another participating province. As a result, the supply would be subject to the HST at the applicable rate. For example, a supply of admission to a sporting event or concert in Toronto, Ontario, and the right of admission can only be used for that specific event at that location, will be subject to HST at the rate of 13% since the supply is deemed to be made in that province.
Conversely, section 7 of the Regulations states that a supply of IPP (other than IPP that relates to real property or to tangible personal property) of which the Canadian rights can only be used primarily in non-participating provinces will be deemed to be made in a non-participating province and subject to the GST. For example, a supply of admission to a sporting event or concert in Calgary, Alberta, and the right of admission can only be used for that specific event at that location, will be subject to GST at the rate of 5% since the supply is deemed to be made in that province.
The place of supply rules that determine the province in which a supply of IPP is made are explained in GST/HST Memorandum 3-3-5, Place of Supply in a Province - General Rules for Intangible Personal Property.
Accordingly, [Seller’s] supplies of admission for events within Canada made to buyers are subject to the GST/HST at the applicable rate of the province where the event takes place, […].
ADDITIONAL INFORMATION
Disclosure of the tax payable
Subsection 223(1) requires the supplier to disclose the tax payable for the supply: where it is tax-extra, to indicate the amount of tax, and where it is tax-included, to indicate that the price includes GST/HST. In both cases the disclosure must be overt and not presumed.
For further information, you may refer to GST/HST Policy Statements P-116, Collection of GST, by a supplier, where the invoice is silent on the tax payable, and P-118R, Assessments on a Tax-Extra or a Tax-Included Basis.
Digital Economy Businesses
The ETA was amended, effective July 1, 2021, to include GST/HST provisions that generally apply to non-resident vendors and distribution platform operators that participate in the digital economy. These provisions are found under Subdivision E of Division II of the ETA.
Subsection 211.12(2), in combination with paragraph 211.12(1)(a), requires non-resident vendors who are not registered(footnote 5) and are not carrying on business in Canada (“specified non-resident supplier”) who make supplies of intangible personal property (IPP) or service (“specified supply”) to recipients in Canada that did not provide the supplier with a proof of their GST/HST registration (“specified Canadian recipient”) to register(footnote 6) under the simplified GST/HST registration regime, and to collect the GST/HST on these supplies.
The requirement for specified non-resident vendors to register is based on whether their threshold amounts, determined under subsection 211.12(1), exceed $30,000. The threshold amount is generally the sales of specified supplies to specified Canadian recipients by the specified non-resident suppliers(footnote 7).
A “specified non-resident supplier” is defined in subsection 211.1(1) to mean, a non-resident person that does not make supplies in the course of carrying on a business in Canada and that is not registered under Subdivision D of Division V of Part IX of the ETA (i.e., the regular GST/HST registration(footnote 8)).
A “specified supply” is defined in subsection 211.1(1), in part, as a taxable supply of intangible personal property or a service.
Furthermore and pursuant to subsection 211.1(1), a “specified Canadian recipient” means a recipient of a supply where the recipient has not provided to the supplier evidence satisfactory to the Minister of National Revenue of being registered for the GST/HST under Subdivision D of Division V of Part IX of the ETA (i.e., the regular GST/HST registration) and the usual place of residence of the recipient is situated in Canada.
In applying the definitions above to the case at hand, as [Seller] is a resident of Canada and is currently registered under Subdivision D of Division V of Part IX, [Seller] would not satisfy the definition of a “specified non-resident supplier” pursuant to subsection 211.1(1). Since [Seller] is not a specified non-resident supplier, subsection 211.12(2) – required registration and subsection 211.12(1) – threshold amount would not be applicable. Hence the digital economy provisions found under Subdivision E of Division II of the ETA would not apply.
For further information regarding the digital economy businesses, more specifically the section on cross-border digital products, go to “GST/HST for digital economy business” at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-economy-gsthst/find-out-need-register/cross-border-threshold-amounts.html.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-706-8742.
Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Sincerely,
Teresa Lau
Senior Rulings Officer
Digital Economy Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
FOOTNOTES
1. […]
2. For example - [Company]
3. For example - [Seller]
4. Section 2 of the Regulations defines a “Canadian right” in respect of IPP, as that part of the property that can be used in Canada.
5. Under the regular GST/HST registration regime.
6. Under the simplified GST/HST registration regime
7. Paragraph 211.12(1)(a)
8. Also referred to in our CRA webpages as “normal GST/HST registration”.
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