CRA clarifies the application of the zero-rating and place-of-supply rules to charter flights

Points made by CRA in its new Info Sheet on charter flights include:

• A "stopover," a concept which bears on when flights are zero-rated, e.g., for "continuous journeys" whose origin or termination is outside Canada or the continental U.S., as well as on the place-of-supply rules for provincial HST purposes, is considered by CRA not to include a stop of less than 24 hours between two legs of a journey.
• The concept of a "continuous journey," whose definition requires that all related "tickets or vouchers’’ be issued by one supplier or agent, also is expanded by a CRA view that "a document that contains all the information commonly found on a ticket" should be treated as a ticket.
• CRA considers that most charter flights are supplies of a "passenger transportation service," although a mere leasing or licensing of an aircraft does not so qualify.
• The usual single-supply doctrine applies so that, for example, a charge for ferrying a plane from another city to the embarkation point for the charter flight and various airport charges which the carrier has no choice but to incur will be part of the consideration for the passenger transportation service provided by the carrier.

Summaries of GST/HST Info Sheet GI-170 "Charter Flights Supplied to Third-Party Charterers" under Sched. VI, Pt. VII, s. 1(1) – stopover, s. 1(1) – continuous journey, s. 3 and s. 4.