Dear XXXXX:
You have enquired as to the rules relating to paragraph 25(f) of Part VI of Schedule V to the Excise Tax Act.
Rentals of real property by a "public service body" (including municipalities and non-profit organizations) are generally exempt from the application of the Goods and Services Tax (GST) unless a specific exclusion applies to make the rental taxable. For example, prior to September 15, 1992, all leases and licences of real property by public service bodies for a period of at least one month were exempt from GST. The legislation was amended, however, such that licences entered into after September 14, 1992, are subject to GST regardless of the length of the licence, while a lease continues to be exempt if made for a term of at least one month. As a result, a licence provided by a public service body of the right to moor a boat is subject to GST after September 14, 1992, and only exempt from GST for agreements entered into prior to that date if the period of the license was for at least one month.
Effectively, the treatment of such licences is the same for both commercial enterprises and public service bodies as of September 15, 1992.
Whether a particular rental is made by way of lease or license is a question of fact and depends on a number of factors including the actual terms of the arrangement between the parties. A seasonal use of property in which the owner retains control and access to the whole of the premises is generally considered a supply made by way of license. Accordingly, an agreement or right to moor a boat would normally be considered a licence which is taxable, except for agreements provided by public service bodies entered into before September 15, 1992, in which the period of the licence must be less than one month to be taxable. I have enclosed copies of the applicable legislation and explanatory notes for your reference. The due date for the remittance of net GST revenue of a business generally depends on whether the business is a GST registrant. (A GST registrant includes any business that earns more than $30,000 annual revenues from taxable supplies or voluntarily elects to register). Depending on the level of the registrant's annual taxable supplies, the reporting period may be monthly (taxable revenues greater than $6 million), quarterly (taxable revenues less than $6 million) or annually (taxable revenues less than $500,000 and an election is filed). Monthly and quarterly filers must generally file their return and remit the net GST within one month after the end of their respective reporting period. Annual filers are required to file a return and remit the net GST within three months following the end of the reporting period. For example, an annual filer with a year end of December 31 would be required to file their return and remit the net GST by the end of March of the following year. Quarterly instalment payments may be required to be remitted by annual filers.
For further information as to the reporting period that may apply to a particular situation, you may contact your local Excise/GST District Office. I hope this information will be of assistance to you. Should you have any questions pertaining to this letter, you may contact the undersigned at (613) 954-3772.
S. Farber
Manager - Real Property
Tax Policy - Special Sectors
Policy and Legislation
Excise/GST
Attach.
c.c.: Stan Farber
All Regional I & S Managers
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