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
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 167824
Business Number: […]
Dear [Client]:
Subject: GST/HST INTERPRETATION
Certifications and Examinations
Thank you for your fax of February 2, 2015, concerning the application of the Goods and Services Tax (“GST”)/Harmonized Sales Tax (“HST”) to a supply of a certificate authorizing an eligible person to use a professional designation and a service of administering an examination. We apologize for the delay in providing this response.
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 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.
The following information was provided […]:
* […][The Association] is a non-profit professional association formed by volunteer practitioners in [yyyy];
* [The Association] has [#] members across Canada. The membership is comprised of […][list of the types of memberships available];
* [The Association] has developed a set of courses which are offered by certain authorized post-secondary institutions across Canada. […];
* The courses are generally offered as continuing education courses;
* The courses are offered as credit courses at […][certain post-secondary institutions];
* [The Association] does not deliver any of the courses but authorizes the instructors for the courses;
* When an individual completes a series of courses (or some equivalent) they may apply to [the Association] to be authorized to use the professional designation […]([…][Designation X]) […];
* […];
* [The Association] recently began offering […]([…][Exam Y]) that is a product of […][BCo];
* [The Association] charges a fee for administering [Exam Y] which is in excess of the minimum cost of administering the exam;
* [Exam Y] is not recognized by any regulatory body;
* Individuals who pass [Exam Y] are issued a […][Certificate Y].
RULINGS REQUESTED
You have asked the following questions:
1. Is [the Association] a professional or trade association?
2. If [the Association] charges a fee for the certification of an individual [for the purposes of] [Designation X], would the supply be exempt under section 6 of Part III of Schedule V?
3. Is the service of providing the [Exam Y] an exempt supply under section 6 of Part III of Schedule V?
4. If either of the above supplies is exempt, is [the Association] eligible to file Form GST29, Educational Services: Election and Revocation of the Election to Make Certain Supplies Taxable?
INTERPRETATION GIVEN
As explained in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, a ruling is a written statement the Canada Revenue Agency (CRA) provides to a person that sets out the CRA's position on specific provisions of the legislation as these relate to a clearly defined fact situation of that person. The CRA will issue a ruling only when the person requesting the ruling has provided all the relevant facts of a transaction or series of transactions and all supporting documents.
We are unable to issue a ruling with regard to your enquiry as we have not received sufficient information to do so. […]. Given the preceding, we are providing the following interpretation on the subject matter based on our understanding of the information […][provided] and […].
Generally, supplies of property and services made in Canada are subject to the GST/HST, unless they are specifically exempt under Schedule V or zero-rated (taxed at 0%) under Schedule VI. In order for a supply of property or a service to be exempt from GST/HST, a specific exempting provision included in Schedule V must apply to that particular supply. Part III of Schedule V exempts certain educational services.
Section 6 of Part III of Schedule V exempts “a supply of:
(a) a service of instructing individuals in courses leading to, or for the purpose of maintaining or upgrading, a professional or trade accreditation or designation recognized by a regulatory body, or
(b) a certificate, or a service of administering an examination, in respect of a course, or in respect of an accreditation or designation described in paragraph (a),
where the supply is made by a professional or trade association, government, vocational school, university or public college or by the regulatory body, except where the supplier has made an election under this section in prescribed form containing prescribed information.”
A “regulatory body” is defined in section 1 of Part III of Schedule V to mean “a body that is constituted or empowered by an Act of Parliament or of the legislature of a province to regulate the practice of a profession or trade by setting standards of knowledge and proficiency for practitioners of the profession or trade”.
In order to be regarded as a regulatory body, a person must be constituted or empowered under a particular statute of the legislature of a province for the express purposes of acting as a regulatory body for a particular profession or trade. In other words, an organization which has not been empowered by a legislative statute to regulate a particular profession or trade will not be considered to be a regulatory body for the purposes of section 6 of Part III.
As there is no federal or provincial statute that constitutes or empowers [the Association] to regulate a particular profession or trade, and [the Association] is not empowered to bestow a particular professional or trade accreditation or designation, [the Association] is not a “regulatory body” as defined in section 1 of Part III of Schedule V.
In order for a supply of a certificate or an examination to be exempt under section 6 of Part III of Schedule V, the supply must be made by a professional or trade association, government, vocational school, university, public college or a regulatory body, and it must be in respect of a course, or in respect of an accreditation or designation that leads to or maintains or upgrades a professional or trade accreditation or designation recognized by a regulatory body.
Therefore, section 6 of Part III of Schedule V will only apply to exempt the supplies made by [the Association] if [the Association] is a professional or trade association, a government, a university, a public college or a vocational school as defined in the ETA and the supply of [Designation X] certificate or the service of administering the [Exam Y] is in respect of an accreditation or designation that leads to or maintains or upgrades a professional or trade accreditation or designation recognized by a regulatory body. As there is no evidence that [the Association] is a government, a university, public college or vocational school, section 6 of Part III of Schedule V could only apply to [the Association] if [the Association] is a professional or trade association.
Whether or not [the Association] is a professional or trade association is a question of fact. Based on the information provided, we are unable to determine whether [the Association] is a professional or trade association.
However, even if [the Association] were a professional or trade association, according to the facts supplied […] neither the [Designation X] certification nor the […][Certification Y] is recognized by any regulatory body. Therefore, section 6 of Part III of Schedule V would not apply to the service of supplying a certificate authorizing the use of [Designation X] or administering the [Certificate Y] examination. As such, both of these services provided by [the Association] will be subject to the GST/HST, unless exempt under some other provision of the ETA.
As neither of the above supplies is exempt when made by [the Association], it is not necessary for [the Association] to file Form GST29, Educational Services: Election and Revocation of the Election to Make Certain Supplies Taxable.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you would like to provide additional information to this office on this matter, please send your request, referencing case number 167824, to the above noted address or fax it to 613-990-7584 and we would be pleased to advise you in this regard.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4280. Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
K. Bennett
Aboriginal Affairs and Educational Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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