3 March 2008 GST/HST Ruling 76810 - Transfers of farmland

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:

In XXXXX, your accountant, requested on your behalf, a ruling concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your supplies of services. We understand from our telephone conversation with you XXXXX that you no longer wish to receive a ruling from the Canada Revenue Agency (CRA) on particular supplies of your services.

As we discussed, in the future you may submit the necessary documentation if you wish to receive a written ruling. The following general information is provided to assist you in determining the tax status of your supplies of services.

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

Under subsections 165(1) and (2) every recipient of a "taxable supply" made in Canada must pay GST/HST at the rate of 5%, or 13% if made in a participating province, on the value of the consideration for the supply. Subsection 165(3) states that the tax rate for zero-rated supplies is 0%. Zero-rated supplies are listed in Schedule VI.

A taxable supply is defined in subsection 123(1) as a supply made in the course of a commercial activity. A commercial activity is defined in that same subsection to exclude exempt supplies. Exempt supply means a supply included in Schedule V.

Section 1 of Part VII of Schedule V exempts the supply of financial services that are not included in Part IX of Schedule VI.

For a supply of a service to be characterized as a supply of a financial service it must squarely fit within the definition of a financial service as defined in subsection 123(1). First, it is necessary to consider whether a service is included under paragraphs (a) to (m) of the definition, after which the exclusions in paragraphs (n) to (t) must be considered.

For further information on the definition of "financial service", please refer to GST/HST Memorandum 300-4-7, Financial Services, which may be downloaded from the CRA website.

The provision of advice or the provision of a consulting service is, generally, a taxable supply. When advice or a consulting service is provided by a GST/HST registrant to a Canadian resident entirely in a non-participating province such as Ontario, it is generally subject to GST, in accordance with subsection 165(1), calculated at the rate of 5%.

For information on the obligations and entitlements of a person registered for GST/HST purposes please refer to the guide, RC4022(E), General Information for GST/HST Registrant, which may be downloaded from the CRA website.

The foregoing comments represent our general views with respect to the subject matter of your request. 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. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.

If you require clarification with respect to any of the issues discussed in this letter, or wish to obtain a ruling, please call me directly at XXXXX. 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,

XXXXX
Rulings Officer
Financial Institutions Unit
Financial Institutions & Real Property Division
Excise and GST/HST Rulings Directorate

2008/02/15 — RITS 88883 — XXXXX First Nation XXXXX Goods and Services Tax Rebates for First Nations