8 August 2007 GST/HST Interpretation 95605 - Foreign Convention and Tour Incentive Program

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.

Dear XXXXX:

As we have had correspondence with you relating to this subject matter in the past, we are writing to inform you of a recently released GST/HST Notice No. 221 entitled Questions and Answers on the Cancellation of the Visitor Rebate Program and the New Foreign Convention and Tour Incentive Program (the Notice).

On September 25, 2006, the Government of Canada announced amendments to the Excise Tax Act that eliminate the Visitor Rebate Program (VRP) effective April 1, 2007. Budget 2007 confirmed the elimination of the VRP and introduced the new Foreign Convention and Tour Incentive Program (FCTIP). The legislative amendments required to make these changes received Royal Assent on June 22, 2007.

The FCTIP is a new rebate program that continues to provide GST/HST relief to non-resident consumers and non-resident non-GST/HST registered businesses for:

•   all of the GST/HST paid on accommodation sold to non-resident tour operators who are not registered for the GST/HST and who include the accommodation in eligible tour packages for non-residents, and

•   generally 50% of the GST/HST paid on eligible tour packages that are sold to non-resident consumers and non-resident businesses who are not registered for the GST/HST, including tour operators.

It also continues to provide relief for certain properties and/or services used in the course of conventions held in Canada.

The questions and answers contained in the Notice provide an overview of the new FCTIP. The transitional rules for the cancellation of the VRP are addressed, as are the rules of the tour incentive program of the new FCTIP. Additional questions and answers on conventions will be added at a later date.

Under the transitional rules for the cancellation of the VRP, the VRP rebate will continue to apply to short-term and/or camping accommodation made after March 31, 2007 if the accommodation:

•   is part of a continuous accommodation at the same facility that started before April 2007; or

•   was sold to a non-resident under an agreement in writing entered into before September 25, 2006 and first made available before April 2009.

A description of what qualifies as an agreement in writing is provided in the Notice. It is important to note that the type of documentation that contains the necessary information may vary in different cases.

The Notice clarifies the definition of a tour package for the purposes of the new FCTIP and includes a number of examples of eligible and ineligible tour packages. In addition, information on qualifying for the rebate under the new FCTIP, calculating the amount of the rebate and obtaining the rebate is provided.

We have enclosed a copy of the Notice for your convenience.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-2488.

Yours truly,

Carla Schur-Ellison
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2007/08/08 — RITS 96423 — Foreign Convention and Tour Incentive Program