8 August 1994 GST/HST Interpretation 11685-3(on) - Non-resident Employees Working in Canada on the Production of the Commercial

                                                                        Mr. D. Courneyea
Director
Audit
Excise/GST Operations

                                                                        File: 11685-3(on)

I refer to an E-Mail message of May 19, 1994, addressed to Mr. Owen Newell of my staff, from Ms. L. Leroux-Desforges of Audit Operations requesting an interpretation of section 252 of the Excise Tax Act (the Act). Ms. Leroux-Desforges advises that a General Application for Rebate of the Goods and Services Tax (form GST 189E) has been received from a non-resident. The non-resident was in Canada making a commercial for XXXXX, and has applied for a rebate of GST incurred on accommodations and all related expenses encountered by the non-resident for their employees when working in Canada on the production of the commercial.

Ms. Leroux-Desforges is seeking clarification on section 252 of the Act and Part V of Schedule VI to the Act regarding exports, and has asked several questions. I will reply to the questions in the order in which they were presented.

1. Question

Subsection 252(1) says that a rebate can be filed if a non-resident exports a supply of tangible personal property for use primarily outside Canada within 60 days. This subsection does not restrict rebates to a commercial exporter only. Where do we find this restriction since our guide (page 8) states "As well, the property for which you are claiming a rebate of tax must be primarily for use in commercial activities outside Canada"? Do we have a definition of commercial exporter?

1. Answer

The rebate provided to commercial exporters, although claimed on Form GST 189E instead of Form GST 176E, may be under the authority of subsections 252(1) or 252(2), depending upon what is being claimed.

There is no definition of commercial exporter in the Act.

Although in her question, concerns have been raised about the application of subsection 252(1), I would like to point out that subsection 252(2) is more relevant to the production of a commercial.

2. Question

What does "other work" in subsection 252(2) mean? Could this include the production of a commercial as in the claim we have on hand?

2. Answer

There is no definition of "other work".

The commercial being produced for XXXXX will qualify as other work as long as the conditions of subsection 252(2) have been met. The commercial must have copyright protection and must be exported by the non-resident. I would like to point out that the property or service acquired by the non-resident must be for consumption or use exclusively in the production of the commercial. Accommodation would not qualify under subsection 252(2).

3. Question

Does subsection 252(3) relate only to goods mentioned in subsection 252(2)?

3. Answer

Yes.

Should you have any questions, please contact Owen Newell at (613) 954-4280.

H.L. Jones
Director
General Tax Policy
Policy and Legislation

GTP:    XXXXX