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: 121400
February 23, 2010
Dear XXXXX:
Subject:
GST/HST RULING
Non-resident Registration
Thank you for your XXXXX of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to consulting services supplied in Canada by you, a non-resident sole proprietor.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
Based on the information in the letter we understand the following:
1. You are a non-resident XXXXX service consultant operating primarily in XXXXX.
2. In XXXXX of 2009 you entered into an agreement with a Canadian company, XXXXX, to provide services to a client of the company (XXXXX) located in XXXXX, XXXXX.
3. The contract for the supply of the service was signed by you in XXXXX.
4. The consulting service was provided from XXXXX 2009 to XXXXX 2009; a period of less than 183 days.
5. A large portion of the service was performed at the office of XXXXX in XXXXX, where you were granted space to perform the work and where you were given access to XXXXX computer network and from where you could take part in meetings for a specific project. In addition, some work was performed at your temporary accommodations in Canada and some work was performed in XXXXX, where you were required to travel as part of the service provided to XXXXX.
Ruling Requested
You would like to know whether you were required to register for purposes of the GST/HST and to collect and remit tax on the supply of your service.
Ruling Given
Based on the facts set out above, we rule that you were carrying on business in Canada for GST/HST purposes as a result of entering the contract for the service. Therefore, you were required to register for purposes of the GST/HST and as a registrant, you were required to collect and remit tax on the supply of the service made in Canada.
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 paragraph 142(1)(g), a supply of a service is deemed to be made in Canada if "the service is, or is to be, performed in whole or in part in Canada." A supply of a service that is made in Canada by a non-resident person is deemed to be made outside of Canada pursuant to subsection 143(1) unless the non-resident person is registered for purposes of the GST/HST or is supplying the service in the course of a business carried on in Canada.
Whether a non-resident person is carrying on business in Canada for GST/HST purposes is a question of fact that requires consideration of all relevant facts. GST/HST Policy Statement P-051R2: Carrying on Business in Canada (available on the CRA website: (http://www.cra-arc.gc.ca/E/pub/gl/p-051r2) identifies various factors that are considered when determining whether a non-resident person is carrying on business in Canada for GST/HST purposes in a particular situation.
The importance or relevance of a given factor in a specific case depends upon the nature of the business activity under review and the particular facts and circumstances of each case. With respect to the supply of a service, factors that are of particular relevance are whether the service is performed in Canada, and whether the service is being performed by the supplier in Canada including through agents or employees of the supplier. Based on the application of the relevant factors set out in the policy to the facts, you were considered to be carrying on business in Canada for GST/HST purposes as a result of the service that you performed in Canada as described in the facts.
Pursuant to subsection 240(1), every person who makes a taxable supply in Canada in the course of a commercial activity engaged in by the person in Canada (such as the service you supplied) is required to be registered for the GST/HST.
As a GST/HST registrant, you were required to collect and remit the GST in respect of the supply of the service at a rate of 5%. Pursuant to subsection 169(1), as a registrant, you may claim input tax credits to recover the tax paid or payable by you on property or services acquired or imported for consumption, use or supply in the course of your commercial activities based on the extent of the consumption, use or supply of the property or services in the course of those activities. For more information on the application of GST/HST to non-residents please consult CRA publication RC4027 Doing Business in Canada - GST/HST Information for Non-Resident which is accessible on the CRA website - http://www.cra-arc.gc.ca/E/pub/gp/rc4027.
In order to register you should contact the XXXXX Tax Services Office at the following address:
XXXXX
You may also contact that office by telephone at: XXXXX.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 957-7841 XXXXX.
Yours truly,
Dwayne Moore
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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