12 June 2007 General Information Letter 94176 - PROPOSED LAW/REGULATION Eligibility for Accommodation Rebate

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:

Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of short-term accommodation by your client, XXXXX (the Hotel).

All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified.

We understand that XXXXX (the Company) has entered into an arrangement with the Hotel to provide instant GST rebates to non-resident attendees of a convention being held at the Hotel. XXXXX (the Convention) will be held in XXXXX.

You have provided a copy of XXXXX (the Agreement) between the Hotel and XXXXX (the Sponsor). The Hotel and the Sponsor entered into the Agreement XXXXX.

Under the Agreement, the Hotel agreed to hold a block of XXXXX guestroom nights for use by attendees of the Conference and their guests XXXXX. Pursuant to the Agreement, the room rates for each type of room are confirmed and are applicable for the Convention. The rates are subject to the applicable taxes including the GST.

The Hotel agrees to hold the full block of guestrooms until XXXXX. At that date, all rooms not utilized will be returned to the Hotel's general inventory. The Hotel will continue to accept reservations from attendees, however, after this date, rooms will be subject to XXXXX.

The attendees and their guests will pay their own room, tax, and incidentals incurred by them at the Hotel. The Hotel will identify attendees of the Convention and their guests by the group folio designation of XXXXX in the hotel folio.

XXXXX.

XXXXX the Company will act as agent for the non-resident individuals in filing their rebate claims with the Canada Revenue Agency (the CRA).

Interpretation Requested

You would like to know whether the accommodation available to the non-resident attendees is eligible for the rebate under the GST/HST Visitor Rebate Program (VRP).

Interpretation Given

Under the VRP, a non-resident person is eligible for a rebate of the GST/HST paid in respect of short-term accommodation where the person meets the conditions for the rebate including:

(a) the non-resident person is the recipient of a supply made by a registrant of short-term accommodation;

(b) the short-term accommodation is acquired by the person otherwise than for supply in the ordinary course of a business of the person of making such supplies; and

(c) the short-term accommodation is made available to a non-resident individual.

On September 25, 2006, the Government of Canada announced that the VRP would be cancelled effective April 1, 2007, as part of a package of spending restraint measures. On March 19, 2007, Budget 2007 confirmed the cancellation of the VRP, and announced the introduction of the Foreign Convention and Tour Incentive Program (FCTIP). The proposed FCTIP will provide GST/HST relief in respect of certain property and services used in the course of conventions held in Canada and the accommodation portion of tour packages for non-residents.

Generally, under the proposed FCTIP, a non-resident person that acquires short-term accommodation under the above conditions will not be eligible for a rebate of the GST/HST if the accommodation is first made available after March 2007. However, special grandfathering rules provide that the GST/HST rebate under the VRP continues to apply if the short-term accommodation is purchased under a written agreement entered into before September 25, 2006, and if the first night of continuous accommodation at the same facility starts before April 1, 2009.

The Sponsor entered into a written agreement with the Hotel before September 25, 2006, to hold a block of XXXXX rooms for use by certain persons attending the Convention held from XXXXX. The rooms are available at the convention group rate from XXXXX. Pursuant to the grandfathering rules, the GST rebate under the VRP will continue to be available in respect of the short-term accommodation that the Hotel supplies under the agreement to non-resident persons attending the Convention and their guests. As a result, non-resident individuals may receive a GST rebate for accommodation supplied by the Hotel at the Convention group rate XXXXX. The Hotel will identify attendees of the Convention and their guests by the group folio designation XXXXX in the hotel folio. Rooms that are reserved by convention attendees and their guests after the cut-off date XXXXX, are considered to be supplied under the Agreement if they are also identified by the group folio designation XXXXX in the hotel folio. Of course, all other eligibility requirements for obtaining the rebate must still be met.

Where the Company files a rebate application with the CRA on behalf of the non-resident person in respect of the GST paid on the supply of short-term accommodation, the Company must provide a Power of Attorney signed by the non-resident person. A Power of Attorney is an authorization given by one person to another to act on their behalf. As indicated on the CRA's web site at http://www.cra-arc.gc.ca/tax/nonresidents/visitors/becoming-e.html, the following mandatory information must be clearly stated on your Power of Attorney:

•   that you are a private company and are not affiliated with the Government of Canada or the CRA;

•   complete upfront disclosure of your fee structure (i.e. the cost to the claimant for using your services);

•   that it is for a refund of the GST;

•   the client's first name and last name, address, telephone number, email address (if applicable) and signature; and

•   the client service mailing address, telephone and fax numbers, and email address of your company.

The Power of Attorney must not include any sentence that would allow for any sub-contracting of the non-resident visitor's claim.

Also, where the Company files a rebate application with the CRA on behalf of the non-resident person in respect of the GST paid on the supply of short-term accommodation, the Company must provide a copy of the attached letter, or the agreement between the Sponsor and the Hotel, as proof that the rebate is grandfathered under the VRP. In addition, the Company must provide all the documents of the non-resident person as set out in the attached letter.

The foregoing comments represent our general views with respect to the proposed amendments to the ETA as they relate to the subject matter of your request. Any change to the wording of these proposed amendments or any future proposed amendments to the ETA, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the CRA with respect to a particular situation.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-9700.

Yours truly,

Michèle Routhier
GST/HST Rulings Officer
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

APPENDIX

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

XXXXX
XXXXX
XXXXX
XXXXX

Case Number: 94176

June 12, 2007

XXXXX
XXXXX

This confirms that the supply of short-term accommodation made available to non-resident individuals at XXXXX (the Hotel) between XXXXX, (the Period) is supplied under an agreement in writing entered into before September 25, 2006, and is grandfathered under the GST/HST Visitor Rebate Program, as amended by Budget 2007.

XXXXX (the Company) may file form GST176, Application for Visitor Tax Refund, with the Canada Revenue Agency (the CRA) on behalf of qualifying non-residents to obtain a rebate of the GST paid on the short-term accommodation acquired from the Hotel during the Period provided that all applicable conditions and restrictions are met pursuant to the Excise Tax Act. The Company must also provide a Power of Attorney acceptable to the CRA for each non-resident individual, authorizing it to act on the individual's behalf in completing the rebate application.

Qualifying non-residents must provide sufficient documentary evidence to establish their entitlement to the rebate, such as original invoices, hotel folio, receipts or other documents that show:

•   the amount of GST charged by the Hotel and paid by the non-resident;

•   the number of nights of accommodation made available to a non-resident individual in a particular room at the Hotel during a Period; and

•   the Hotel group folio designation XXXXX.

Also, a copy of this letter should be sent with the rebate application.

Yours truly,

Michèle Routhier
GST/HST Rulings Officer
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2007/05/25 — RITS 59376 — Application of the GST/HST to the Sale of Books by an Online High School