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 Numbers: 132884 and [...]
Business Number: [...]
Dear [Client]:
Subject:
GST/HST RULING
Eligibility to claim public service body (PSB) rebates as a university and the tax status of supplies of short-term accommodation and parking
Thank you for your letters of January 26, February 2 and 7, 2011, regarding the tax status of supplies of short-term accommodation and parking and whether [...] [(the Corporation)] is entitled to claim a public service body (PSB) rebate using the PSB rebate factors for a university.
This letter revokes and replaces our previous ruling letter, identified as case number [...], dated [mm/dd/yyyy] issued by the [...] Region, GST/HST Rulings Centre in [...] [City 1, Province X]. The ruling in case number [...] is replaced with the enclosed ruling, effective as of the date of this letter. We apologize for any inconvenience this may cause.
Harmonized Sales Tax (HST) applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. Goods and Services Tax (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 that
1. [The Corporation] was incorporated under the [...] Act in the legislature of the province of [Province X]. The [...] Act was assented to on [mm/dd/yyyy].
2. According to section [...] of the [...] Act [...]. [direct quote from legislation]
3. [The Corporation] is currently not affiliated with the University of [...].
4. Under section [...] of the [...] Act [...]. [direct quote from legislation]
5. Under section [...] of the [...] Act [...]. [direct quote from legislation]
6. [The Corporation] does not currently grant degrees to its students.
7. [The Corporation] is not a research body of a recognized degree-granting institution.
8. [The Corporation] is a registered charity within the meaning assigned to that expression by subsection 248(1) of the Income Tax Act. As such, it is a charity for GST/HST purposes.
9. [The Corporation] was claiming PSB rebates as a charity, and then in [mm/yyyy] it requested an adjustment to its PSB rebates for years [yyyy] to and including [yyyy] to allow the PSB rebate using the PSB rebate factor for a university instead of the rebate factor for charities. The request was denied.
10. [The Corporation's] [yyyy] and [yyyy] PSB rebate claims were filed using the PSB rebate factors for a university, but the PSB rebate claims were fully disallowed.
11. [The Corporation] has not filed an election under section 211 of the ETA in respect to any its real property.
12. [The Corporation] charged and collected GST/HST on its supplies of short-term accommodation and parking.
13. The Canada Revenue Agency issued a ruling dated [mm/dd/yyyy], case [...], regarding the tax status of [the Corporation's] supplies of short-term accommodation and parking. The ruling was that these supplies of short-term accommodation and parking were taxable and subject to the GST/HST. The explanation stated that [the Corporation] was "a university for GST/HST purposes".
14. In [mm/yyyy], after receiving the ruling in case [...], [the Corporation] requested and shortly thereafter received PSB rebates using the PSB rebate factors for a university for its claim periods of [yyyy] to [yyyy].
RULINGS REQUESTED
You would like to know if [the Corporation] is eligible to claim PSB rebates using the PSB rebate factors for a university.
You would also like to know the tax status of [the Corporation's] supplies of short-term accommodation and parking.
Rulings Given
Based on the facts set out above, we rule that [the Corporation] does not meet the definition of "university" in the ETA, and therefore it can not claim PSB rebates using the PSB rebate factors for a university, starting with the PSB rebate for the claim period ending [mm/dd/yyyy].
We also rule that [the Corporation's] supplies of short-term accommodation and parking are exempt of the GST/HST.
These rulings are subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by these rulings 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
Definition of university
In order to be eligible for the PSB rebate a person must be a charity, a qualifying non-profit organization or a selected PSB on the last day of the claim period or on the last day of the fiscal year that includes that claim period. "Selected PSB" is defined in subsection 259(1) to include a university that is established and operated otherwise than for profit.
The term "university" is defined in subsection 123(1) to mean a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution.
It is the Canada Revenue Agency's position that a "recognized degree granting institution" means an institution that grants degrees and meets the accreditation requirements for degree granting institutions in the country where it is based. Please note that the ability to grant degrees is insufficient to satisfy the definition in subsection 123(1) of the ETA. Rather, the institution must currently be offering programs for which degrees are granted upon completion of the program.
As [the Corporation] does not currently grant degrees to its students and it is not an organization that operates a college affiliated with, or a research body of, a recognized degree-granting institution, it does not meet the definition of "university" in subsection 123(1) and therefore would not be eligible to claim PSB rebates using the PSB rebate factors for a university.
The amount a person is entitled to claim as a PSB rebate is based on the type of PSB the person is on the last day of its claim period. We understand that [the Corporation] claim period for PSB rebates is its fiscal year. If the facts in this letter do not change, [the Corporation] will not meet the definition of university on the last day of its claim period ending [mm/dd/yyyy]. As a result it will not be entitled to claim any PSB rebates using the PSB rebate factors for a university for any GST/HST incurred throughout that and future claim periods. Therefore, for any GST/HST incurred by [the Corporation] between [mm/dd/yyyy] and [mm/dd/yyyy] it will only be eligible for a PSB rebate using the PSB rebate factors for a charity, provided that it is a charity on [mm/dd/yyyy].
Short-term accommodations and parking
Ruling [...] dealt with the tax status of [the Corporation's] supplies of short-term accommodation and parking. The tax status of these supplies was based on the Canada Revenue Agency's mistaken understanding that [the Corporation] met the definition of university and therefore was a public institution (as it was both a registered charity and a university). As explained in this ruling, [the Corporation] is not a university and thus not a public institution, and therefore the tax status of its supplies must be based solely on the fact that [the Corporation] is a charity.
Where a charity has not filed an election under section 211, its supplies of short-term accommodations or parking will be exempt.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4206. 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,
Carol A Gaudet
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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