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.
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Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5XXXXX
XXXXX
XXXXX
XXXXX
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Case Number: 65482March 23, 2006
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Subject:
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GST/HST RULING
XXXXX
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Dear XXXXX:
Thank you for your letter XXXXX wherein you asked whether the XXXXX (the Organization) meets the definition of non-profit organization (NPO) as that term is defined in subsection 123(1) of the Excise Tax Act (ETA).
All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.
Statement of Facts
We understand that
1. The Organization was created upon Royal Assent of the XXXXX the XXXXX Act on XXXXX.
2. XXXXX the XXXXX Act establishes the Organization as a corporation.
3. The Organization is not a trust at law.
4. XXXXX the XXXXX Act states that the Organization is not an agent of the Government XXXXX.
5. The Organization's mission statement is XXXXX.
6. XXXXX:
a) XXXXX
b) XXXXX
c) XXXXX
d) XXXXX
7. XXXXX
a) XXXXX
(i) XXXXX
(ii) XXXXX
b) XXXXX
c) XXXXX
d) XXXXX
8. XXXXX
e) XXXXX
(i) XXXXX
(ii) XXXXX
f) XXXXX
g) XXXXX
9. The Organization has no shareholders and consists of thirteen individual directors appointed as follows:
a) XXXXX
b) XXXXX
10. The first directors of the Organization are
a) XXXXX
(i) XXXXX
(ii) XXXXX
(iii) XXXXX
(iv) XXXXX
b) XXXXX
11. XXXXX
12. XXXXX
a) XXXXX
b) XXXXX
c) XXXXX
d) XXXXX
e) XXXXX
f) XXXXX
13. XXXXX
a) XXXXX
b) XXXXX
c) XXXXX
d) XXXXX
e) XXXXX
f) XXXXX
g) XXXXX
h) XXXXX
i) XXXXX
j) XXXXX
14. XXXXX
15. XXXXX
16. XXXXX
17. XXXXX
a) XXXXX
(i) XXXXX
(ii) XXXXX
b) XXXXX
c) XXXXX
18. A director of the Organization must not accept remuneration from that corporation other than for reasonable travelling and out of pocket expenses necessarily incurred by the director in discharging his or her duties.
Ruling Requested
You would like to know if the Organization meets the definition of non-profit organization as defined in subsection 123(1).
Ruling Given
Based on the facts set out above, we rule that the Organization is considered to be a person organized solely for a purpose other than profit, with no part of its income payable to or otherwise available for the personal benefit of any member, and if it in fact operates for a purpose other than profit, it would qualify as an NPO under subsection 123(1) of the ETA.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is 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
It is our view that the Organization is organized for a purpose other than profit and would be considered to be operated solely for a purpose other than profit provided it operates in compliance with the XXXXX Act, its by-laws, mission statement and purpose provided. Whether an organization operates solely for a purpose other than profit is a question of fact which must be determined on an ongoing basis.
Although the regional advisory committees have members, these are not considered members of the Organization. As the XXXXX Act also does not provide for the Organization to have any proprietors or shareholders, we do not find that any income will be payable to any member, shareholder, or proprietor of the Organization.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is 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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-4206.
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
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