1 June 1996 GST/HST Interpretation 11820-3[2] - The Visitor's Rebate Program

                                                                        File # 11820-3(MB)
Doc # 2893G
Ref: Ss 252(1) & Ss 132(1)

Dear XXXXX

This is in response to your telephone conversations with a member of my staff and your letter of April 18, 1996, concerning the eligibility of XXXXX on permanent assignments in XXXXX to receive a GST Visitor's rebate on items purchased when they periodically return to Canada on leave or temporary duty.

The eligibility for a rebate of the GST on goods purchased in Canada is contingent upon the residency status of the person making the purchase and the other requirements set out in subsection 252(1) of Excise Tax Act (ETA). An individual must be a non-resident of Canada both at the time of purchase and at the time of filing a claim in order to qualify for a GST rebate under the Visitor's Rebate Program. Revenue Canada determines residency for GST purposes on a case-by-case basis by applying general legal principles.

The Courts have held that an individual is resident in Canada for tax purposes if Canada is the place where he, in the settled routine of his life, regularly, normally or customarily lives. Factors to be considered include: the permanence and purpose of the individual's stay abroad, the individual's residential ties within Canada, his residential ties elsewhere, and the regularity and length of visits to Canada.

Whether a person is resident in a particular place is a question of fact which can be decided only after all of these factors are considered and each is given its proper weight.

XXXXX XXXXX and their families are generally considered residents of Canada for GST purposes and therefore are not eligible to claim a tax refund for visitors.

A letter dated February 5, 1992 addressed to XXXXX and signed by XXXXX was subsequently clarified in a letter issued December 3, 1992 addressed to XXXXX. I am enclosing a copy at your request. In this letter it is stated that:" Guidelines to determine an individual's residence status are presently being developed and will be made available to XXXXX when completed. In the meantime, XXXXX posted outside Canada are not eligible for the Visitor Rebate Program since they are not considered to be non-residents."

As you are aware, a Notice of Ways and Means Motion was tabled in the House of Commons on April 23, 1996. Legislation has been proposed to clarify the definition of a Canadian resident for GST purposes. Effective April 24, 1996, individuals who are considered Canadian residents under the Income Tax Act are also considered residents of Canada for GST purposes pursuant to paragraph 132(1)(d) of the ETA as follows:

"(d) in the case of an individual, if the individual is deemed under any of paragraphs 250(1)(b) to (f) of the Income Tax Act to be resident in Canada at that time."

This proposed amendment supports the fact that XXXXX are not eligible to claim a GST Visitor's Rebate on items purchased when they periodically return to Canada on leave or temporary duty as they are considered residents of Canada.

For your information, I am enclosing a Fact Sheet in both English and French, on proposed GST amendments relating to the Visitor's Rebate.

If you require further information or would like to discuss this matter further, please contact Michèle Brûlé, Policy Officer, at (613) 952-9208.

Yours truly

J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations

enclosure