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 : 119306
Business Number : XXXXX
Attention: XXXXX XXXXX
December 8, 2009
Subject:
GST/HST INTERPRETATION
PROPOSED LAW/REGULATION
Application of the transitional rules for the HST in Ontario to
supplies of memberships for the 2010 golf season
Dear XXXXX:
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of memberships for the 2010 golf season.
As announced in the 2009 Ontario Budget, the Government of Canada and the Government of Ontario have signed a Memorandum of Agreement that provides the framework for the imposition of the HST in Ontario. The HST is proposed to come into effect in Ontario on July 1, 2010, at a rate of 13%, consisting of a 5% federal part (equivalent to the existing GST) and an 8% provincial part. The HST will use the same tax base and structure as the GST, with some exceptions.
The draft legislation regarding the HST in Ontario has not yet been released. However, the Ontario Ministry of Revenue has announced general transitional rules. The following interpretation is based on the transitional rules as announced in Information Notice No. 3, General Transitional Rules for Ontario HST, released by the Government of Ontario on October 14, 2009. This Notice can be found at www.rev.gov.on.ca/en/notices/hst/03.html. This interpretation should not be taken as a statement by the Canada Revenue Agency that the transitional rules for the HST in Ontario will be enacted in their current form.
We understand that XXXXX.
Interpretation Requested
You would like to confirm that under the transitional rules for the HST in Ontario, the HST will only apply to membership sales for the 2010 golf season made and outstanding accounts for memberships paid on or after May 1, 2010.
Interpretation Given
Based on the information provided, we confirm that under the transitional rules for the HST in Ontario, the HST will only apply to consideration paid for memberships for the 2010 golf season supplied on or after May 1, 2010, to the extent that the consideration relates to the part of the membership period that occurs on and after July 1, 2010.
If the consideration for the membership for the 2010 golf season becomes due, or is paid without having become due, before May 2010, the Company will only need to charge GST on the consideration.
For any outstanding amounts due on a membership that is sold before May 1, 2010, the day that the consideration becomes due determines how the transitional rules would apply. Therefore, if an amount becomes due before May 1, 2010, but has not been paid by that date, the late payment of that amount would also only be subject to GST under the transitional rules, regardless of when it is paid.
For memberships that are sold on or after May 1, 2010 and before July 2010, the Company would need to prorate the consideration based on the membership period (for example, the 2010 golf season) and charge HST for the portion of the membership period that occurs on and after July 1, 2010.
For any memberships that are sold on or after July 1, 2010, the Company would charge HST on the consideration for the membership if it is for the remainder of the 2010 golf season. If a membership that is sold on or after July 1, 2010 relates to the part of the membership period that occurs before July 2010, the Company would need to prorate the consideration based on the membership period and charge HST for the portion of the membership period that occurs on and after July 1, 2010.
The foregoing comments represent our general views with respect to the transitional rules for the HST in Ontario as announced in Information Notice No. 3, General Transitional Rules for Ontario HST, released by the Ontario Ministry of Revenue on October 14, 2009, as they relate to the subject matter of your request. Any change to the wording of the transitional rules or any future proposed legislation regarding the HST in Ontario, if enacted, could have an effect on the interpretation provided herein. 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.
For your convenience, find enclosed a copy of GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service.
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
UNCLASSIFIED
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