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.
GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 217927
Business Number: […]
Dear [Client]:
Subject: GST/HST INTERPRETATION
Services provided to contractors who may be Indians, Indian bands or band-empowered entities
Thank you for your fax of December 1, 2020, concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to the supply of services provided by the […][Organization] to contractors who may be Indians, Indian band or band-empowered entities. We apologize for the delay in responding.
The Canada Revenue Agency (CRA) recognizes that many First Nations people in Canada prefer not to be described as Indians. However, the term Indian is used in this letter because it has a legal meaning in the Indian Act (Footnote 1) .
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand the facts as follows, based on the information you provided and a review of [...]:
1. […][Information about the Organization].
2. […][Information on services provided by the Organization].
3. The […][services] are done by […] employees of the [Organization].
4. The [Organization]’s customer is an […] contractor who may be a sole proprietorship, partnership or corporation. Only contractors are liable to pay for the […] fees billed by the [Organization].
5. The [service] can be done […][where the service is provided]. The fees for [the services] are included in the […].
6. […][Information about the Organization].
INTERPRETATION REQUESTED
You would like to know if the following supplies are relieved of the GST/HST under Technical Information Bulletin B-039, GST/HST Administrative Policy - Application of the GST/HST to Indians (B-039):
1. The supply of a service […] provided to a contractor that is a sole proprietorship owned by an Indian where the service is performed at a location on a reserve.
2. The supply of a service […] provided to a contractor that is a sole proprietorship owned by an Indian where the service is performed at a location off a reserve.
3. The supply of a service […] provided to a contractor that is a partnership where one or all the partners are Indians, Indian bands or band-empowered entities and the service is performed at a location on a reserve.
4. The supply of a service […] provided to a contractor that is a partnership where one or all the partners are Indians, Indian bands or band-empowered entities and the service is performed at a location off a reserve.
5. The supply of a service […] provided to a contractor that is a corporation owned by one or more Indians, Indian bands or band-empowered entities where the service is performed at a location on a reserve.
6. The supply of a service […] provided to a contractor that is a corporation owned by one or more Indians, Indian bands or band-empowered entities where the service is performed at a location off a reserve.
Where a supply is relieved of tax, you would like to know what specific information is required to be provided by the Indian, Indian band or band-empowered entity.
We acknowledge your request for rulings on the above matters. However, as noted in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, a ruling provides CRA’s position on specific provisions of the legislation as these relate to a clearly defined fact situation of a particular person. As the circumstances are such that all of the pertinent facts cannot be established at this time, we are unable to rule. Rather, we are providing general information which we trust will be of assistance.
INTERPRETATION GIVEN
The terms band-empowered entity, Indian, Indian band, real property and reserve are defined in B-039.
Please note that the following information applies where the [Organization]’s customer (that is, […][a] contractor) is entitled to relief under B-039. If the [Organization]’s customer is not an Indian, Indian band or band-empowered entity, relief is not available even if the customer of the […] contractor is an Indian, Indian band or band-empowered entity.
Relief on services
Services supplied to an Indian are relieved of tax under B-039 where the service is performed totally on a reserve for property which is situated on a reserve at the time the service is performed and all other conditions described in B-039 are met.
Services supplied to a band or band-empowered entity would be relieved of the GST/HST where the services are for band management activities or for real property on a reserve and all other conditions described in B-039 are met. The CRA’s position is that the expression “for band management activities or for real property on a reserve” be read as a single inclusive term. That is, services supplied to a band or band-empowered entity for real property off a reserve are subject to the normal GST/HST rules, even if acquired by the band or the band-empowered entity for band management activities. As well, all services supplied to a band or band-empowered entity that are not for band management activities on a reserve are subject to the GST/HST.
Band management activities are defined in B-039 as activities or programs undertaken by a band or band-empowered entity that are not commercial activities for which they would otherwise be entitled to an input tax credit. Therefore, services acquired in the course of commercial activities (like that of […][a] contractor) are not relieved of GST/HST unless the services are for real property on a reserve.
If the contractor is a sole proprietorship owned by an Indian and the property for which the service is provided is situated on a reserve, the supply of the service to the contractor will be relieved of GST/HST provided that the individual provides proof of registration under the Indian Act.
If the contractor is a partnership whose partners include an Indian and the property for which the service is provided is situated on a reserve, the supply of the service to the contractor will be relieved of GST/HST provided that the Indian that is a partner provides proof of registration under the Indian Act.
If the contractor is a partnership whose partners include an Indian band or band-empowered entity and the service is for real property on a reserve, the supply of the service to the contractor will be relieved of GST/HST provided that the Indian band or band-empowered entity provides a certificate as described in the section “Documentation requirements” further in this letter.
If the contractor is a corporation that is a band-empowered entity and the services are for real property on a reserve, the supply of the service to the contractor will be relieved of GST/HST provided that the corporation provides a certificate as described in the section “Documentation requirements” further in this letter.
If the contractor is a corporation that is not a band-empowered entity, the supply of the service will be subject to GST/HST even if it supplied on a reserve.
In all cases, where the service is provided off a reserve, relief is not available and the service is subject to the GST/HST.
Ontario First Nations point-of-sale relief
The Government of Ontario provides point-of-sale relief equal to the provincial part of the HST for qualifying off-reserve supplies of property or services to eligible Ontario First Nations purchasers where tax relief as described in the previous section is not available.
Information on the 8% point-of-sale rebate can be found in the GST/HST Info Sheet GI-106, Ontario First Nations Point-of-Sale Relief - Reporting Requirements for GST/HST Registrant Suppliers.
For further information on the point-of-sale rebate, you may call the Government of Ontario at 1-866-668-8297, or refer to the “Ontario First Nations Harmonized Sales Tax (HST) rebate” web page (Footnote 2) .
Documentation requirements
The [Organization] must keep a record of the address where the services were performed to show that the property was located on a reserve.
Indians
When the contractor is an Indian, they must present proof of registration under the Indian Act to the [Organization] in order to acquire services on a reserve without paying the GST/HST. They must show the [Organization] their status card (Footnote 3) or original Temporary Confirmation of Registration Document (Footnote 4) . The [Organization] must keep, as evidence, a notation on the invoice or other sales document of the 10-digit registration number or the band name and family number (commonly referred to as the band or treaty number) from the status card, or the registration number and the expiration date of a Temporary Confirmation of Registration Document. A photocopy or an altered version of the Temporary Confirmation of Registration Document provided by an Indian is not valid.
Indian bands and band-empowered entities
When the contractor is an incorporated band-empowered entity or a partnership that includes an Indian band or band-empowered entity as a partner, a certificate must be provided to, and retained by, the [Organization] to show:
- that the service is being acquired by an Indian band or a band-empowered entity; and
- that the service is being acquired for real property on a reserve.
An example of the certificate is available in B-039 under “Documentary evidence to be retained by vendors”.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, the interpretations given in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretations or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 343-573-0977. 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,
Desneiges Arbour
Government Sectors and Indigenous Affairs Unit
Public Service Bodies and Governments Division
GST/HST Rulings Directorate
FOOTNOTES
1 R.S.C., 1985, c. I-5, as amended.
2 https://www.ontario.ca/page/ontario-first-nations-harmonized-sales-tax-hst-rebate
3 A status card may either be a Certificate of Indian Status or a Secure Certificate of Indian Status. For more information on these cards, please refer to the “Is your status card still valid” web page on Indigenous Services Canada’s website (https://www.sac-isc.gc.ca/eng/1100100032424/1572461852643)
4 Information about the Temporary Confirmation of Registration Document can be found on Indigenous Services Canada’s website (https://www.sac-isc.gc.ca/eng/1551364517335/1572460866709)
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