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: 198799
Business Number: […]
Attention: […]
February 2, 2021
Dear [Client]:
Subject: GST/HST RULING
[…] Request to be Determined a Band-Empowered Entity
Thank you for your fax of April 15, 2019, concerning the application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to […] ([…] [the Trust]). We apologize for the delay in our response.
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
Based on your correspondence, our telephone conversations, and […], we understand the facts as follows:
1. [The Trust] is a registered charity for income tax purposes and is also a charity for GST/HST purposes.
2. [The Trust] is registered for GST/HST purposes.
3. [The Trust] was established as a trust in [yyyy].
4. […].
5. […].
6. There are […] trustees on the board of trustees that […].
7. [The Trust]’s audited financial statements for the years ended [mm/dd/yyyy], to [mm/dd/yyyy], indicate that there were distributions to beneficiaries.
RULING REQUESTED
You would like to know if [the Trust] qualifies as a band-empowered entity.
RULING GIVEN
[The Trust] does not qualify as a band-empowered entity.
EXPLANATION
GST/HST Technical Information Bulletin B-039, GST Administrative Policy - Application of GST to Indians (TIB B-039), summarizes the Canada Revenue Agency’s policy concerning the treatment of supplies made to or by Indians, Indian bands and band-empowered entities.
The definition of a “band-empowered entity” for the purposes of TIB B-039 includes a corporation, board, council, association, society or other organization that is owned or controlled by a band, a tribal council or a group of bands other than a tribal council.
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). 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.
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 given in this letter provided that: none of the issues discussed in the ruling 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 1-343-573-6095. Should you have additional questions on the ruling and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Andrew Kaye
Government Sectors and Indigenous Affairs Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
Email this Content