Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
XXXXX
Case Number: 105881
Attention: XXXXX
XXXXX
June 3, 2009
Subject:
GST/HST INTERPRETATION
FCTIP - Exhibitor's Rebates
Dear XXXXX:
Thank you for your XXXXX of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to rebate claims under the Foreign Convention and Tour Incentive Program (FCTIP) filed by XXXXX (the Company) on behalf of non-resident exhibitors.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
You have provided examples of several claims by exhibitors that include accommodation and summarized the facts that are common in these situations:
1. Non-resident exhibiting companies (exhibitors) often have many delegates from different geographic regions attend a convention.
2. The exhibitors often require that the delegates make their own travel arrangements.
3. The delegates pay their travel expenses, including the hotel accommodation, and are reimbursed for these expenses by the exhibitor.
4. The hotel invoices will indicate the name of the delegate, and usually the convention, but do not indicate the name of the exhibitor.
5. Example 1: XXXXX (Exhibitor 1) was an exhibitor at the XXXXX (the Conference), which took place XXXXX, in XXXXX. XXXXX attended the Conference as the delegate of Exhibitor 1. Exhibitor 1 asked the Company to file a rebate claim on its behalf for the GST that XXXXX paid on the hotel accommodation he purchased in connection with his stay. You provided us with a copy of the completed rebate application and supporting documents, including a copy of the hotel invoice for XXXXX for the dates XXXXX, showing the amount including GST paid.
6. Example 2: XXXXX (Exhibitor 2) was also an exhibitor at the Conference. The XXXXX of Exhibitor 2, XXXXX, was its delegate.
7. Example 3: XXXXX (Exhibitor 3) was also an exhibitor at the Conference. One of the owners of Exhibitor 3, XXXXX, was its delegate at the Conference.
8. Example 4: XXXXX (Exhibitor 4) was also an exhibitor at the Conference and sent XXXXX delegates: XXXXX. Each person paid for their own accommodation. The Company has filed a rebate claim on behalf of Exhibitor 4.
Interpretation Requested
You would like to know what documentation you would have to provide to support a rebate claim for an exhibitor in these situations.
Interpretation Given
A rebate is available to non-registered non-resident exhibitors under section 252.3 for the GST/HST paid on a supply of exhibition space at a convention and the GST/HST paid in respect of related convention supplies. The exhibitor must have acquired the exhibition space exclusively for use as a site for the promotion, at a convention, of property or services supplied by, or a business of, the exhibitor.
For GST/HST purposes, a "convention" means a formal meeting or assembly that is not open to the general public, but does not include a meeting or assembly the principal purpose of which is
• to provide any type of amusement, entertainment or recreation,
• to conduct contests or games of chance, or
• to transact the business of the convenor or attendees in the course of a trade show that is open to the general public, or otherwise than in the course of a trade show.
When referring to supplies made to exhibitors, "related convention supplies|" means property or services acquired, imported or brought into a participating province by the exhibitor exclusively for consumption, use or supply by the exhibitor in connection with a convention, but does not include
• transportation services, other than a chartered service acquired by the person solely for the purpose of transporting attendees of the convention between any of the convention facilities, places of lodging of the attendees or transportation terminals,
• entertainment, or
• property or services that are food or beverages or are supplied to the person under a contract for catering.
Generally, short-term accommodation supplied by a hotel to an exhibitor would be regarded as a related convention supply where the exhibitor acquired the accommodation and used it exclusively in connection with a convention. This would include when the exhibitor used the accommodation as a place of lodging while promoting the business of the exhibitor, or property or services supplied by the exhibitor, at the convention. The nights spent before and after the convention would also qualify as related convention supplies if the exhibitor acquired the accommodation so that it could assemble and disassemble its booths and displays at the convention on the days before and after the convention.
In situations where an exhibitor has not paid the tax directly, but reimburses its delegates for their expenses, there are rules in the ETA that may apply to allow the exhibitor to claim the rebate for the tax it has reimbursed to delegates who are employees of the exhibitor.
Under subsection 175(1), where an employee of an employer acquires property or a service for consumption or use in relation to activities of the employer, the employee paid the tax payable in respect of that acquisition, and the employer pays an amount to the employee as a reimbursement in respect of the property or service, for GST/HST purposes,
• the employer is considered to have received a supply of the property or service;
• any consumption or use of the property or service by the employee in relation to activities of the employer is considered to be consumption or use by the employer; and
• the employer is considered to have paid, at the time the reimbursement is paid, tax in respect of the supply.
The amount of tax the employer is considered to have paid depends on the amount of the reimbursement. The full amount of the GST/HST paid by the employee is considered to have been paid by the employer if the full cost of the expense, including GST/HST, is reimbursed to the employee, and the property or service acquired was used exclusively in relation to the employer's activities. Otherwise, the tax is limited to either the percentage reimbursed or the extent, expressed as a percentage, to which the property or service was used in relation to the employer's activities, whichever is lower.
GST/HST Policy Statement P-075R, Allowances and Reimbursements, states that a reimbursement is a payment made by one person to repay another person for amounts spent. An amount constitutes a reimbursement where the amount is fully accounted for by the person receiving the payment (i.e., evidenced by supporting vouchers or records).
An employer that reimburses an employee for expenses incurred in connection with the employer's activities may claim an input tax credit or a rebate with respect to the GST/HST that it is considered under subsection 175(1) to have paid. Therefore, a non-registered non-resident exhibitor may be able to claim a rebate under section 252.3 with respect to GST/HST paid by an employee of the exhibitor on related convention supplies if the exhibitor reimbursed the employee and the other conditions of subsection 175(1) are met.
To qualify for the rebate, an exhibitor must have acquired an exhibition site exclusively for use as a site for the promotion, at a convention, of property or services supplied by, or a business of, the exhibitor. If the exhibitor sends employees to the convention as its delegates, and the hotel accommodation acquired by the employees is a related convention supply (i.e., it is exclusively for use or consumption in connection with the convention and is not an excluded supply), it will also be an expense incurred for consumption or use in relation to activities of the exhibitor if it meets the rules in subsection 175(1).
If the employee is fully reimbursed for the cost of the accommodation, including the GST/HST, then the exhibitor may include the total amount of the GST/HST paid in its rebate claim. However, if the employee is only partially reimbursed for the cost of the accommodation, then the amount of GST/HST included in the rebate claim would be limited to the percentage of the total amount that was reimbursed.
Please note that the exhibitor is considered to have paid the tax at the time the reimbursement is paid to the employee. The exhibitor does not meet the requirements for claiming a rebate with respect to the GST/HST paid by the employee until that time. Therefore, if the exhibitor only reimburses the employees for the cost of the accommodation after they return home from the convention, the deeming rules have not yet been met when the employee pays the tax in Canada (i.e., at the end of the convention).
A rebate claim that includes an amount paid by an employee, who attended a convention as a delegate of the exhibitor and was reimbursed by the exhibitor, would have to include evidence that:
• the delegate is an employee of the exhibitor;
• the amounts paid by the employee were for supplies used exclusively in connection with a convention; and
• the exhibitor has reimbursed the employee for all or part of the amounts paid by the employee including the GST/HST.
This evidence would indicate that the exhibitor had met the conditions of subsection 175(1). As such, the exhibitor is considered to have paid the tax incurred by the employee at the time that the exhibitor reimbursed the employee.
To support a rebate claim from an exhibitor where an employee is reimbursed for expenses incurred in attending a convention as a delegate of the exhibitor, a letter such as the one provided in the Appendix to this letter should be included with the rebate claim. The letter should be signed by the delegate who is the employee of the exhibitor as well as an authorized person of the exhibitor, such as a manager or controller, who has the authority to sign on behalf of the exhibitor and can verify the information in the letter.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-7909. 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,
Jacqueline Russell, CGA
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
APPENDIX
To support a rebate claim from an exhibitor for amounts paid by an employee, and reimbursed by the exhibitor, a letter such as the following should be provided with the rebate claim:
Name of exhibitor: ______________________________________________________
Street address: _________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Name of Convention: ____________________________________________________
City: _________________________________________________________________
Date(s) of Convention: ___________________________________________________
Name of delegate attending convention: ______________________________________
We certify that we have met all of the following conditions necessary under subsection 175(1) of the Excise Tax Act so that the exhibitor is considered to have paid the GST/HST incurred by the delegate:
• The delegate is an employee of the exhibitor.
• The employee incurred expenses, including GST/HST, in attending the convention as the delegate of the exhibitor.
• The exhibitor reimbursed the employee on _________________________ (date) for ____________ (percentage) of the expenses incurred by the employee.
• The reimbursed expenses were used exclusively in connection with the convention.
We will provide any additional information required to verify the above.
Signature of employee: ____________________________________________________
Signature of authorized person * of exhibitor: ___________________________________
Name of authorized person: ________________________________________________
Title of authorized person: _______________________________________________
* An authorized person of the exhibitor is generally an employee who has authority to sign such declarations on behalf of the exhibitor, such as a manager or controller.
UNCLASSIFIED
Email this Content