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: 142629
Business Number: [...]
March 14, 2012
Dear [Client]:
Subject:
GST/HST RULING
Application of GST/HST to the sale [...] of coins
Thank you for your faxes of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the sale [...] of coins.
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
Based on our conversation in [mm/yyyy], the information available on your website and the product information you provided by fax, we understand the following:
1. [...] (Coin Seller) is [...]
2. Coin Seller is registered for GST/HST purposes under Business Number [...].
3. Coin Seller understands that some coins are exempt from GST/HST if they meet a certain level of purity. Accordingly, some coins sold [...] are treated by Coin Seller as exempt supplies.
4. The following [coins] [...] will be sold by Coin Seller:
• [...][Coins A]
• [...][Coins B]
5. The [...] coins come in [...].
6. [...]. [Quantity to be sold described]
7. [...]. [Availability of some coins described]
Ruling Requested
You would like to know whether:
1. The sale made by the Coin Seller of [...][Coins A] is a taxable supply.
2. The sale made by the Coin Seller of [...][Coins B] is a taxable supply.
Ruling Given
Based on the facts set out above, we rule that:
1. The sale made by the Coin Seller of [Coins A] is a taxable supply.
2. The sale made by the Coin Seller of [Coins B] is a taxable supply.
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
Supplies of goods and services that are made in Canada are taxable supplies subject to the GST in the non-participating provinces and HST in the participating provinces, unless the supply is specifically identified as being an exempt supply or a zero-rated supply. "Zero-rated supplies" are taxable at the rate of 0% and are listed in Schedule VI. "Exempt supplies" are listed in Schedule V and are not subject to the GST/HST.
Supplies of financial services are exempt under Part VII of Schedule V unless they are specifically listed as zero-rated under Part IX of Schedule VI. A financial service generally involves a transaction relating to a financial instrument or money. For example, paragraph (a) of the definition of financial service in subsection 123(1) provides that the exchange, payment, issue, receipt or transfer of money is a financial service.
Money is defined in subsection 123(1) to include currency, whether Canadian or foreign however, it does not include currency with a fair market value that exceeds its stated value as legal tender in the country of issuance or currency that is supplied or held for its numismatic value. [Coins A] and [Coins B] are not considered money since each of these coins is currency with a fair market value that exceeds its stated value as legal tender in the country of issuance, and is currency supplied or held for their numismatic value.
Where the coin is not included in the definition of money as discussed above, the supply of a coin would generally be taxable unless the supply is a financial service under paragraph (d) of that definition. Paragraph (d) of the definition of financial service in subsection 123(1) includes the transfer of ownership of a financial instrument.
The definition of a financial instrument in subsection 123(1) includes a "precious metal". A precious metal is defined in that same subsection to mean "a bar, ingot, coin or wafer that is composed of gold, silver or platinum and is refined to a purity level of at least
(a) 99.5% in the case of gold and platinum, and
(b) 99.9% in the case of silver.
In this context, a bar, ingot or wafer at the required purity levels must be generally recognized and accepted for trading on Canadian financial markets. Typically, these products will bear markings that indicate the purity level of the metal and have an identification mark of the issuing financial institution or refinery. With respect to a "coin", only those metals at the required purity levels that have been issued by a government authority and that may be used as currency will qualify as a "precious metal". On its own, the sale of a coin that is a precious metal would be an exempt supply and the sale of a coin that is not money and not a precious metal would be a taxable supply.
[Coins A] and [Coins B] [...] contain elements that are precious metals. Specifically, [...] coins [...] meet the definition of precious metal. However, [...][coins] does not meet the purity level required to be considered a precious metal.
As [...][Coins A and Coins B] [contain] elements that would be taxable and others that would be exempt, it must first be determined whether a single supply or multiple supplies are being provided by the Coin Seller.
For GST/HST purposes, the determination of whether a transaction consisting of several elements is to be regarded as a single supply or multiple supplies is based on a determination of fact. GST/HST Policy Statement, P-77R2 - Single and Multiple Supplies, provides additional information on how to determine whether there is a single supply or there are multiple supplies.
When performing an analysis, it is important that the analysis be confined to the transaction at issue, rather than referring to other possible transactions containing the same or similar elements. This process should not involve artificially splitting something that commercially is a single supply.
[...]. None of [Coins A or Coins B] can be substituted for another and the intention of the consumer is to purchase [Coins A or Coins B] as a single product. [...][Coins A and Coins B are each] a single supply. Even if an element of [Coins A or Coins B] is a precious metal, the predominant element of the supply is a taxable supply of [Coins A or Coins B] and therefore, [Coins A and Coins B are] each [...] a single taxable supply.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9211. 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,
Hélène Bustamante
Financial Institutions Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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