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.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 169786
Dear [Client]:
Subject: GST/HST RULING
[…][Public service bodies' rebate of the provincial part of the HST – whether resident in a province]
Thank you for your letter of April 17, 2015, concerning […][the Association’s] entitlement to claim a public service bodies’ (PSB) rebate. We apologize for our delay in responding.
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 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.
STATEMENT OF FACTS
We understand
1. […] (the Association) is an unincorporated association comprised of members drawn from various areas of the […][sector] in […][Province 1], […][Province 2], […][Province 3], and […][Province 4] ([…][Provinces]).
2. You have stated that the Association is a qualifying non-profit organization.
3. The Association receives contributions from the [Provinces] to […][carry out its activities in the Provinces].
4. The Association is not registered for GST/HST purposes.
5. The Association is not a selected public service body.
6. You provided us with a document titled […] (the Terms of Reference). The Terms of Reference were approved [mm/dd/yyyy].
7. The Terms of Reference describe the […][purpose] of the Association as follows: […]
8. The […][membership of the Association] is set out in the Terms of Reference as follows:
[…][Describes how the Association’s membership is comprised of equal representation from each of the Provinces]
9. The Terms of Reference state the following regarding Support Members: […]
10. In a telephone conversation on [mm/dd/yyyy], you clarified that the members of the Association representing […][Corporation A] are there to provide […][services] pursuant to the services agreement between [Corporation A] and the Association. They do not have any decision making authority.
11. The Terms of Reference state the following regarding meetings:
[…][Describes how meetings are held by electronic means]
12. In our [mm/dd/yyyy], phone conversation, you explained that the role of the co-chairs is to chair meetings and set the agenda. The co-chairs have been delegated the authority to sign documents on behalf of the Association, but they do not have any independent power.
13. The Terms of Reference state the following regarding decision making: […]
14. The Terms of Reference state the following regarding reporting: […]
15. The Association has no fixed place of activities.
16. The Association does not own any real property.
17. The Terms of Reference do not specify a head office of the Association.
18. The Association’s main activity is […][the conference], which is held every two years. The location of the [conference] varies.
19. You provided us with an agreement (the Agreement) between the Association and [Corporation A] dated [mm/dd/yyyy]. [Corporation A] was contracted to perform the services and work set out in Schedule A to the Agreement.
20. Schedule A to the Agreement states:
[…][Description of the services to be performed by Corporation A]
21. [Corporation A’s] headquarters is in […][Province 5].
22. The Association and [Corporation A] are separate entities.
23. Article […] of the Agreement states “The parties hereby agree and acknowledge that [Corporation A] is engaged as an independent contractor and is not nor shall it be deemed to be an agent of the [Association].”
RULING REQUESTED
You would like to know
1. In which province(s) is the Association resident? In particular, is the Association resident in all of the [Provinces], or none of them?
2. Is the Association entitled to claim a PSB rebate of the provincial part of the HST?
RULING GIVEN
Based on the facts set out above, we rule that
1. The Association is resident in [Province 1], [Province 2], [Province 3], and [Province 4].
2. The Association can claim a partial rebate of the provincial part of the HST based on the extent it intended to consume, use or supply the property or service in the course of its activities in each participating province in which it is resident.
EXPLANATION
Resident in a province
A PSB that is resident in a participating province may be eligible to claim a PSB rebate of the provincial part of HST paid or payable on eligible purchases and expenses using the applicable provincial rebate rate for that province.
A PSB is resident in every province in which it has a permanent establishment. Normally, a permanent establishment is a fixed place of activities. However, in addition to having a fixed place of activities, there are other circumstances where a PSB may have, or be deemed to have, a “permanent establishment” in a province.
As the Association does not have any fixed place of activities, it has a permanent establishment at the principal place where its activities are conducted.
Based on the facts provided, the principal places where the Association’s activities are conducted are [Province 1], [Province 2], [Province 3], and [Province 4]. Therefore, the Association has a permanent establishment in each of these provinces. As such, the Association is resident in [Province 1], [Province 2], [Province 3], and [Province 4] for purposes of the PSB rebate.
For more information, see GST/HST Info Sheet GI-121, Determining Whether a Public Service Body is Resident in a Province for Purposes of the Public Service Bodies' Rebate.
PSB rebate
Certain PSBs are eligible to claim a PSB rebate of a percentage of the GST and the federal part of the HST paid or payable on eligible purchases and expenses. A PSB is eligible for a PSB rebate if it is a charity, a qualifying non-profit organization or a selected public service body on the last day of a claim period or on the last day of the fiscal year that includes that claim period.
A “qualifying non-profit organization” is a non-profit organization whose percentage of government funding is at least 40% of its total revenue.
A “non-profit organization” is a person (other than an individual, an estate, a trust, a charity, a public institution, a municipality or a government) that was organized and is operated solely for a purpose other than profit, no part of the income of which is payable to, or otherwise available for the personal benefit of, any proprietor, member or shareholder thereof unless the proprietor, member or shareholder is a club, a society or an association the primary purpose and function of which is the promotion of amateur athletics in Canada.
As a qualifying non-profit organization, the Association is entitled to claim a 50% PSB rebate of the GST and the federal part of the HST paid on eligible purchases and expenses. Whether a person meets the definition of qualifying non-profit organization is a question of fact that must be determined for each fiscal year. For further information, see “Claiming a rebate as a qualifying non-profit organization” in Guide RC4034, GST/HST Public Service Bodies’ Rebate.
A qualifying non-profit organization that is not a selected public service body (Footnote 1) and is resident in one or more participating provinces is also eligible for a partial rebate of the provincial part of the HST. The participating provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, but do not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities, as defined in subsection 123(1), are carried on in that area. Per the above ruling, the Association is resident in […][more than one] participating province […].
A qualifying non-profit organization that is not a selected public service body and that is resident in two or more provinces, at least one of which is a participating province, must calculate its rebate of the provincial part of the HST based on the extent it intended to consume, use or supply the property or service in the course of its activities in each participating province in which it is resident.
For information on how to calculate the Association’s PSB rebate, see GST/HST Info Sheet GI-187, Public Service Bodies’ Rebate for Qualifying Non-profit Organizations Resident in Two or More Provinces, at Least One of Which Is a Participating Province.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-670-7942. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Heather Reardon
Charities and Non-Profit Organizations Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
FOOTNOTES
1 “Selected public service body” means a school authority, a university, or a public college that is established and operated other than for profit; a hospital authority; a municipality; a facility operator; or an external supplier.
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