CRA applies Zomaron to find that fees for marketing credit/debit card processing services to merchants likely were GST/HST exempt

In finding that the “Contractor” (a sales agent) very well might be generating GST/HST exempt “arranging for” fees from the “Company” (a member of a payments network) for marketing the services of the Company to prospective merchants for the processing of credit and debit cards of the merchants’ customers, and completing the merchants’ applications online for submission to the Company for electronic approval, CRA stated:

There is indication that the Contractor has direct involvement and effort in the provision of the Company’s supplies of financial services made to merchants under the merchant agreement. The Contractor has some autonomy to recommend fees and rates to the Company with respect to the merchant agreements. There appears to be a significant degree of reliance by both the Company and the merchant on the Contractor in concluding the merchant agreement and the information substantiates the Contractor’s intention of effecting a supply of a financial service.

This interpretation is similar to 15 June 2021 GST/HST Ruling 196187, and both are based on an acceptance of Zomaron.

Neal Armstrong. Summary of 17 August 2021 GST/HST Interpretation 207227 under ETA s. 123(1) - financial service – para. (l).