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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 129347
Business Number: [...]
March 27, 2012
Dear [Client]:
Subject:
GST/HST RULING
Place of Supply of Services
Thank you for your fax of October 5, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of services made in Canada by [...] [(the Supplier)].
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
We understand the following based on the information in your letter:
1. [...] [The Supplier] is [...] company that is incorporated in Canada and is registered for purposes of the GST/HST (BN# [...]).
2. The Supplier has contracted with [...] [ABC] to provide administrative services in respect of [...] ("[...] [Plan A]"), [...] and [...] ("[...][Plan B]"), [...].
3. The Supplier is responsible for the following: [...].
4. The following are the roles of the [...] representatives as identified in [Plan A] Contract and [Plan B] Contract:
The Contracting Authority is responsible for [...]
The Contracting Authority is identified as [...] ("[...] [the Contracting Authority]"), [...]. [The Contracting Authority] is located in [...] [City 1], Quebec. An address for [the Contracting Authority] in [City 1], Quebec is provided in the contract.
The Project Authority is the representative of [...]
The [Project Authority] is identified as [...] ("[...] [the Project Authority]") and is located in [...] [City 2]. An address for [the Project Authority] in [...] [City 2, Ontario] is provided in the contract.
5. The role of the [...]
6. The following are specifics of the contract for [Plan A]:
The contract identifies [the Project Authority] as the client. [...]
7. The following are contract specifics for [Plan B]: [...]
Ruling Requested
You would like us to confirm the following:
1. The supply of the service made in Canada by [the Supplier] to [ABC] under the [Plan A] Contract is made in Ontario pursuant to subsection 13(1) of the New Harmonized Value-Added Tax System Regulations (the Regulations).
2. The supply of the service made in Canada by [the Supplier] to [ABC] under the [Plan B] Contract is made in Ontario pursuant to subsection 13(1) of the Regulations.
Ruling Given
Based on the facts set out above, we provide the following rulings:
1. The supply of the service made in Canada by [the Supplier] to [ABC] under the [Plan A] Contract is made in Quebec pursuant to subsection 13(1) of the Regulations and subject to GST at a rate of 5%.
2. That the supply of the service made in Canada by [the Supplier] to [ABC] under the [Plan B] Contract is made in Quebec pursuant to subsection 13(1) of the Regulations and subject to GST at a rate of 5%.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
Pursuant to subsection 165(1) every recipient of a taxable supply made in Canada shall pay tax in respect of the supply calculated at the rate of 5% on the value of the consideration for the supply. Pursuant to subsection 165(2), every recipient of a taxable supply made in a participating province shall pay in addition to the tax imposed by subsection 165(1), tax in respect of the supply calculated at the rate of tax for that province on the value of the consideration for the supply.
A supply of a general service that is made in Canada is made in a province under subsection 13(1) of the Regulations if, in the ordinary course of business of the supplier, the supplier obtains an address in the province that is
(A) if the supplier obtains only one address that is a home or a business address in Canada of the recipient, the home or business address in Canada obtained by the supplier,
(B) if the supplier obtains more than one address described in paragraph (A), the address described in that paragraph that is most closely connected with the supply, or
(C) in any other case, the address in Canada of the recipient that is most closely connected with the supply.
The business address of the recipient from which the supplier is hired pursuant to the agreement for the supply (the "contracting address") is generally the address that is most closely connected with the supply. This address will therefore determine the province in which the supply of the service is made where it is in Canada and is obtained by the supplier in the ordinary course of its business. The determination of the place of supply can therefore be made with certainty at the time the supply is first made where the contracting address is identified in the agreement for the supply or, if it is not identified in the agreement, has otherwise been obtained by the supplier in the ordinary course of its business.
Based on the information provided, in the ordinary course of its business the Supplier has obtained multiple business addresses of the recipient under both [Plan A] Contract and [Plan B] Contract. In both instances, of the business addresses obtained by the Supplier, the business address of the recipient that is most closely connected with each supply is the address in the relevant contract that is identified as the address of the Contracting Authority. The address of the Contracting Authority for both contracts is in [City 1], Quebec. The supply of the service made under the [Plan A] Contract is therefore made in Quebec pursuant to subsection 13(1) of the Regulations and subject to GST at a rate of 5%. The supply of the service made under the [Plan B] Contract is made in Quebec pursuant to subsection 13(1) of the Regulations and subject to GST at a rate of 5%.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 957-7841. 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,
Dwayne Moore
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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