CRA releases a primer on the range of circumstances in which a public service body is subject to GST or HST

CRA has issued a new GST/HST Memorandum respecting the (partial) rebate under ETA s. 259 available to public service bodies (such as NPOs, charities, municipalities, hospitals and various schools) for GST/HST payable by them. Most of the Memorandum is a primer on the various circumstances in which a net amount of GST/HST can first become payable by a PSP (including on a self-assessment basis) rather than on the relatively mechanical calculation of the rebate itself.

Although the Memorandum provides 29 examples, they are drafted at such a level of bloodless abstraction that they shed minimal light on the interpretation of the provisions being illustrated. For example, Example 7 references a PSB that is charged at the Ontario rate of 13% on software programming services acquired by it for “use” 80% at its Ontario head office and 20% at one of its offices in PEI – and goes on to note that the PSB would be required to self-assess itself for the 2% higher PEI HST rate on the 20% portion for use in PEI, before then calculating its rebate. If the PSB had its IT department in PEI, executive(s) overseeing them in Ontario, its servers in Chicago and website users benefitting from the software across Canada and elsewhere, on what basis would the percentage split be determined? Example 47 in draft Notice 266, published over five years ago, is similar. Does the absence of any burgeoning published policy signify that CRA is not attempting to enforce this provision, so that it is not developing any experience with it (maybe kind of like the GST GAAR – see Brent Murray)?

Neal Armstrong. 15 summaries of GST/HST Memorandum 13.5 Non-creditable Tax Charged January 2017 including under ETA s. 220.08(1).