CRA finds that sponsorship of a PSB’s staged production was not subject to GST/HST

ETA s. 135 deem a supply by a public sector body (PSB) of a service, or a licence of copyright, a trade-mark, trade-name or other similar property to a “sponsor” for exclusive use by the sponsor in publicizing the sponsor’s business, to not be a supply – except that this rule is stated not to apply where the consideration for this supply by the PSB to the sponsor is “primarily” for radio, TV, newspaper, or magazine advertising.

CRA dealt with a situation where, in order to ensure the success of an event mounted on a stage, a PSB enlisted the participation of sponsors. The agreements typically provided for consideration payable by that sponsor and for sponsorship rights, which included: acknowledgement as official sponsor of the event, logo visibility on event signage on a website, in newspapers, and in social media; the sponsor’s name being on a stage; a licence to use real property to promote its brand by offering samples; and VIP invitations to attend the event.

CRA found that notwithstanding the newspaper element, “the dominant element is the promotional services that the sponsor acquired” of the permitted character, so that the s. 135 no-supply rule applied.

Neal Armstrong. Summary of 10 August 2020 GST/HST Ruling 210848 under ETA s. 135.