GST/HST Memorandum 3.3 "Place of Supply" April 2000

Meaning of the phrase "delivered or made available"..

7. For purposes of paragraphs 142(1)(a) and 142(2)(a) which deem supplies of tangible personal property by way of sale to be made in Canada or outside Canada, the phrase "delivered or made available" has the same meaning as that assigned to the concept of "delivery" under the law of the sale of goods, as follows:

• "Delivered" refers to those situations where delivery of the tangible personal property under the applicable law of the sale of goods is effected by actual delivery.
• "Made available" refers to those situations where delivery of the tangible personal property under the applicable law of the sale of goods is effected by constructive delivery (i.e., actual physical possession of the tangible personal property is not transferred to the recipient of the supply yet is recognized as having been intended by the parties and as sufficient in law). For example, situations arise where a person sells tangible personal property to another person and agrees to hold the property as bailee for the buyer.

The Sale of Goods Act and the Civil Code

10. In common law provinces, the law of the sale of goods is primarily contained in the appropriate Sale of Goods Act. ...

Contract governed by the Convention

11. In those cases where the contract between the parties is governed by the United Nations Convention on Contracts for the International Sale of Goods (Convention), the place where the tangible personal property is delivered or made available will have to be determined in accordance with the rules relating to delivery contained in the Convention rather than in accordance with the domestic law of any province.

Terms of the agreement

16. The place where possession or use of the tangible personal property is given or made available can be determined based on the location of the property at the time the supply is made (i.e., at the time the agreement is entered into). Generally, the location can be determined by reference to the terms of the agreement (e.g., lease or rental agreement). In those instances where there is no agreement or the terms of the agreement are not conclusive, it is necessary to look to the actions of the parties.

Lease etc. of property ss 136.1(1)

17. Where property is supplied by way of lease, licence or similar arrangement, and consideration is paid on a periodic basis (lease interval), a separate supply is deemed to occur in respect of each lease interval. The CCRA's position is that, for purposes of paragraphs 142(1)(b) and 142(2)(b), possession or use of the tangible personal property is given or made available only once under the lease agreement. This point in time is at the beginning of the lease.

19. The ... test of whether a supply of property by way of lease, licence or similar arrangement is made in or outside Canada continues to be a once-and-for-all test that is irrespective of the separate-supply rule [in s. 136.1(1)]. In the case of tangible personal property, the determination would generally be based on where legal delivery of the property was made to the recipient under the terms of the arrangement ... . This determination would govern whether all the deemed supplies made under the arrangement was considered to be made in or outside Canada, irrespective of whether the property was situated in Canada during some lease intervals and outside Canada during others.

Situs of supply of leased property determined by place of legal delivery

19. ... T]he deterination would generally be based on where legal delivery of the property was made to the recipient under the terms of the arrangement... .