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, 15th floor
20 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 158060
Dear [Client]:
Subject: GST/HST RULING
Supply of professional membership to a non-resident
Thank you for your facsimile received February 17, 2014, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to a supply of a membership in […] ([…][XYZ]).
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Government of New Brunswick has proposed to increase the rate of the HST in that province from 13% to 15%, effective July 1, 2016. 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 from your […][correspondence], the following:
* You have been a non-resident of Canada since [yyyy] and are not registered for GST/HST purposes.
* You carry on business, pay taxes and have been a resident of […][Country X] since [yyyy].
* [XYZ] is responsible for […][Province 1] lawyers and paralegals. […].
* You have been a member of [XYZ] since [yyyy] but you do not currently practice law in [Province 1] or elsewhere in Canada. Further, you do not provide [Province 1] law advice anywhere inside or outside of Canada.
* You have maintained your membership in [XYZ] since [yyyy] as a “not in [Province 1]” member under class […].
* A professional membership in [XYZ] is required to practice law in [Province 1]. [XYZ] considers practising law in [Province 1] to mean performing professional services for others as a barrister or solicitor with respect to, or relying on the laws of [Province 1] or the laws of Canada applicable to [Province 1]; or giving legal advice with respect to the laws of [Province 1] or the laws of Canada applicable to [Province 1]. This means an individual can be practising law in [Province 1] whether or not they are physically in [Province 1]. If one gives legal advice with respect to the laws of [Province 1] on the telephone, by e-mail, or through correspondence from a place outside of [Province 1], that individual would be considered to be practising law in [Province 1].
* As a member of [XYZ], you are provided with access to: […][educational programs].
* You have been located outside of Canada each time a supply of the membership is made to you.
RULING REQUESTED
You would like to know if the fee for your membership in [XYZ] is taxable for GST/HST purposes.
RULING GIVEN
Based on the facts set out above, we rule that the membership in [XYZ] supplied by [XYZ] to you is zero-rated (taxed at 0%) pursuant to section 10.1 of Part V of Schedule VI to the ETA.
EXPLANATION
Section 10.1 of Part V of Schedule VI to the ETA zero-rates:
“A supply of intangible personal property made to a non-resident person who is not registered under Subdivision d of Division V of part IX of the Act at the time the supply is made, but not including
(a) a supply made to an individual unless the individual is outside Canada at that time;
(b) a supply of intangible persons property that relates to
(i) real property situated in Canada,
(ii) tangible personal property ordinarily situated in Canada, or
(iii) a service the supply of which is made in Canada and is not a zero-rated supply described by any section of this Part of Part VII or IX;
(c) a supply that is the making available of a telecommunications facility that is intangible personal property for use in providing a service described in paragraph (a) of the definition “telecommunication service” in subsection 123(1) of the Act;
(d) a supply of intangible personal property that may only be used in Canada; or
(e) A prescribed supply.”
In this case, none of the exclusions identified in section 10.1 of Part V of Schedule VI to the ETA apply. As the supply of the membership is made to a non-resident person who is not registered for GST/HST purposes and is outside of Canada at the time of the supply, and because there are no restrictions placed on the membership so it may be used inside and outside of Canada, the supply of the membership is not specifically excluded from these zero-rating provisions and is therefore zero-rated (taxed at 0%) for GST/HST purposes.
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 613-957-8220. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 902-426-5150 (Non-Resident Security and Registration Office, Nova Scotia).
Yours truly,
Doris Rist
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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