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
Case Number: 110305
Attention: XXXXX
February 13, 2009
Subject:
GST/HST INTERPRETATION
Foreign Convention
Dear XXXXX:
Thank you for XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of admissions to XXXXX (the Annual Congress) of XXXXX XXXXX (the Association).
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Based on your facsimiles and your telephone conversations with Chris Lewis of this office, our understanding is that:
The Association is an international organization XXXXX XXXXX. The headquarters of the Association is located in XXXXX. The Association advances its objectives through various means including annual congresses that are held in a different country each year.
An annual congress is held to study XXXXX.
You have stated that the principal purpose of the Annual Congress is not to provide amusement, entertainment, recreation, nor to transact the Association's business. Various bodies responsible for the management and operations of the Association will meet at the Annual Congress. However, you stated that the principal purpose of the Annual Congress is not to transact the Association's business, but to exchange knowledge and experience with respect to XXXXX.
The Association has a worldwide network of national branches XXXXX.
The Association has invited XXXXX (the Canadian Branch) to host the Annual Congress in XXXXX. When a national branch is asked by the Association to host an annual congress, it is incumbent upon the national branch, usually with the assistance of a professional conference organizer, to undertake the local logistics and planning associated with the social programs and physical facilities at which the annual congress will be held, nevertheless under the close supervision of the Association.
By virtue of its Articles of Association, the Association convenes the Annual Congress. You have stated that the Association also offers the admissions to the Annual Congress on the terms agreed to by the Canadian Branch, who will be hosting the event.
Neither the Association nor the Canadian Branch advertised or marketed admissions to the Annual Congress to the general public. Only members of the Association will be invited to attend the Annual Congress. XXXXX:
• XXXXX
• XXXXX.
As members of the Association, individuals are entitled in their own right to enrol for the annual congresses and to pay a reduced admission fee. If a person wants to register as a non-member (which is very rare), they have to go through the Association and provide information about themselves and pay a higher admission fee. The annual congresses are not advertised or marketed towards non-members.
The Canadian Branch has prepared its plans and budgets, including the amounts to be charged for admissions, on the basis that there will be about XXXXX members attending (not including accompanying persons) the Annual Congress. It is estimated that out of the XXXXX attendees, XXXXX of them will be Canadians. Consequently, the Canadian Branch reasonably expects that at least 75% of the admissions will be supplied to non-resident attendees.
Interpretation Requested
You would like to know whether the supplies of admissions to the Annual Congress are subject to GST.
Interpretation Given
Based on the information provided, the Annual Congress is a foreign convention. Consequently, the Association is not required to charge GST on its supplies of admissions to the Annual Congress.
Explanation
Whether an event is a foreign convention for GST/HST purposes is a question of fact, but it is based on whether the requirements in certain definitions are met.
Definition of "convention"
The term "convention" is defined in subsection 123(1) to mean 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:
(a) to provide any type of amusement, entertainment or recreation,
(b) to conduct contests or games of chance, or
(c) to transact the business of the convenor or attendees
(i) in the course of a trade show that is open to the general public, or
(ii) otherwise than in the course of a trade show.
Based on our understanding of the facts, the Annual Congress is a formal meeting that is not open to the general public, and none of the exclusions in the definition of "convention" apply. Therefore, the Annual Congress is a convention as defined in subsection 123(1).
Definition of "sponsor"
The term "sponsor", in respect of a convention, is defined in subsection 123(1), to mean the person who convenes the convention and supplies admissions to it.
Based on our understanding of the facts, the Association convenes the Annual Congress and supplies the admissions to it. Therefore, the Association is the sponsor of the convention as defined in subsection 123(1).
Definition of "foreign convention"
The term "foreign convention" is defined in subsection 123(1) to mean a convention where:
(a) at least 75% of the admissions to which are, at the time the sponsor of the convention determines the amount to be charged as consideration therefore, reasonably expected to be supplied to non-resident persons, and
(b) the sponsor of which is an organization whose head office is situated outside Canada or, where the organization has no head office, the member, or majority of members, of which having management and control of the organization is or are non-resident.
Since the Annual Congress is a "convention", and the sponsor's (i.e., the Association's) head office is situated outside Canada, and at least 75% of the admissions are reasonably expected to be supplied to non-resident persons, the Annual Congress is a "foreign convention" as defined in subsection 123(1).
Admissions to foreign conventions
Section 189.2 states, in part, that where a sponsor of a foreign convention makes a supply of an admission to the convention, the supply shall be deemed to have been made otherwise than in the course of a commercial activity of the sponsor. This applies to admissions supplied to both residents of Canada and non-resident persons. Since these supplies are made otherwise than in the course of a commercial activity, the supplies are not taxable supplies for GST/HST purposes. Therefore, the Association is not required to register for and charge GST/HST on the supplies of admissions to the Annual Congress.
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 613-954-9700. 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,
Michèle Routhier
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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