The registrant enters into marketing agreements with various merchants to promote their businesses by selling vouchers on its website on their behalf, which are redeemable for goods or services offered by the merchants, and by promoting such goods and services on the website and through other channels. The vouchers are sold at a discount from their face amount - but with the merchants agreeing to honour them at their face amount. After finding that the registrant is not supplying financial services (so that the commissions earned by it from the merchants are not exempt), CRA remarks that:
Since the Agreement indicates that the merchants intend to supply the goods and services otherwise valued at the regular price for the promotional price paid for the voucher, the value of the consideration upon which GST/HST must be accounted for should be determined by reference to the [discounted] promotional price.
CRA also provides a definition of "gift certificate" (differing in some respects from that in Policy Statement P-202):
The term "gift certificate" is not defined in the ETA. Generally, the Canada Revenue Agency considers the following criteria in determining whether a particular device is a gift certificate. A gift certificate is a device (e.g. voucher, receipt, ticket)
- that usually has a monetary value or is for a particular supply of property or service
- that can be redeemed on the purchase of property or a service from a particular supplier; i.e. the supplier agrees to accept the device as consideration, or a part thereof, towards the purchase of property or a service,
- for which consideration was given, and
- that has no intrinsic value.