19 August 1994 GST/HST Interpretation 11680-7(glr)[1] - The "Place of Supply" of the Advertising Service Supplied by

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Fax: (613) 990-1233

I refer to your letter of July 20, 1994, addressed to Mr. Garry Ryhorchuk of my staff, regarding a letter dated April 25, 1994 (File: XXXXX), written by XXXXX Interpretations & Services, XXXXX Excise/GST Office, to the above-referenced registered non-resident. You have requested a review of this letter, particularly concerning the "place of supply" of the advertising service supplied by XXXXX[.]

I understand that XXXXX published an XXXXX for distribution in Canada and the United States. The publication is a XXXXX[.] The directory contains (i.e., lists) XXXXX companies that do business in XXXXX Canada. XXXXX sold advertisements in the directory to companies in the XXXXX industry. The advertisers in the Canadian edition came from XXXXX Canada and the United States. XXXXX was enquiring if it should charge the GST at 7% when billing its Canadian customers.

XXXXX advised XXXXX that as the advertisements will appear in a publication to be distributed in the United States and Canada, XXXXX is providing the advertising service in part in Canada [i.e., paragraph 142(1)(g) of the Excise Tax Act (Act)]. Therefore, the supply of the advertising service by XXXXX to its Canadian customers is subject to the GST at 7%.

As indicated in paragraph 108 of GST Memorandum 300-3-5 (Exports), a service directly related to the communication of an advertising message, such as space in a publication, is considered to be an advertising service. In this case, XXXXX is located in the United States and the directory was published in the United States. As the advertising service provided by XXXXX (i.e., supplying space in the directory) was performed wholly in the United States, paragraph 142(2)(g) of the Act deems the supply to be made outside Canada and, as a result, not subject to the GST. The fact that some of the directories will be distributed in Canada is not relevant when determining the place of the supply of the advertising service.

XXXXX letter should be amended to advise XXXXX that the tax does not apply to the advertising service supplied to its Canadian customers.

If you require any additional information, please contact Mr. Ryhorchuk at (613) 952-6743.

H.L. Jones
Director
General Tax Policy
Excise/GST
Policy and Legislation