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, 10th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 202041
Dear [Client]:
Subject: [GST/HST INTERPRETATION]
[…] Taxation of First Nation Trust […]
Thank you for your letter of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to professional services supplied to a trust established by […] [a First Nation] […]. We apologize for the delay in this response.
You asked that the Canada Revenue Agency (CRA) include a trust in the definition of “band-empowered entity” found in GST/HST Technical Information Bulletin B-039, Administrative Policy – Application of the GST/HST to Indians (TIB B-039).
We have carefully considered your submissions. However, our position remains that a trust does not qualify as a band-empowered entity under TIB B-039. The Department of Finance Canada (Finance) has been consulted and is aware of our position.
As you noted in your letter, TIB B-039 was developed to reflect Finance’s intent expressed in its December 13, 1990 press release titled “Guidelines Announced on Indian Purchases and the GST”. The guidelines were not intended to extend the administrative definition of a band-empowered entity to include a trust. This position is consistent with jurisprudence and the treatment of trusts for income tax purposes.
The CRA takes the following position concerning First Nations’ trusts. At common law, a trust is a legal relationship as opposed to a legal entity. A trust does not have shareholders or members. Therefore, a trust cannot qualify as a band-empowered entity as it does not meet the “owned” or “controlled” criteria of the definition outlined in TIB B-039. In addition, for GST/HST purposes, a trust is defined as a person under subsection 123(1) of the ETA. As such, a trust is considered a separate person from its trustees and beneficiaries. Therefore, a trust cannot be an Indian or an Indian band even if all of the trustees and beneficiaries are Indians. Accordingly, a trust is not entitled to tax relief under TIB B-039.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-670-7943. 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,
Desneiges Arbour
Government Sectors and Indigenous Affairs Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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