File 11830-1(EB)
XXXXX Leg. Ref. 2/VI/V
XXXXX March 6, 1995
Dear XXXXX
I am writing in response to your letter of October 23, 1994, concerning the application of the GST to membership fees and conference fees charged by the XXXXX I regret the delay in our response.
This interpretation is based upon our current understanding of the Excise Tax Act (ETA) and Regulations thereunder in their present form and does not take into account the effects of any proposed or future amendments thereto or future changes in interpretation.
While we trust that these comments will be of assistance to you, they do not constitute a GST ruling and are therefore not binding upon the Department in respect of any particular fact situation.
From the information provided in your letter and in your telephone conversation of January 23, 1995 with Elaine Bonnah of this office, our understanding of the facts is as follows:
Statement of Facts
1) The XXXXX is a registered charity and therefore, a charity for the purposes of the GST.
2) One of the principal purposes of the XXXXX is to provide continuing education to its members in emergency medical procedures.
3) Members of the XXXXX are entitled to attend an annual multi-day educational conference and to participate in continuing educational sessions on emergency medicine presented by the XXXXX at various times and locations throughout Canada. By virtue of their membership fee, the members are also entitled to receive newsletters from the XXXXX and discounts on admission prices to conferences put on by this organization.
4) The XXXXX multi-day conference comprises a series of speeches and workshops delivered by XXXXX practitioners. The majority of the persons attending are members of the XXXXX Other attendees will include non-member physicians, members of related occupational groups (e.g., nurses, radiology technicians, etc.).
5) Fees to attend the 1995 multi-day conference are expected to be about XXXXX . The registration fee is consideration for the right to attend the conference. The XXXXX does not supply meals or accommodation to participants.
6) Members of the XXXXX are entitled to a discount on the annual conference fee (in the order of XXXXX .
7) The annual conference is a major source of funds for the XXXXX . Registration fees are higher than amounts required for cost recovery and various companies (e.g., pharmaceutical companies) provide sponsorships to cover some of the expenses relating to this activity.
8) Funds raised from the annual conference are used to defray other costs incurred by the XXXXX , including the continuing education sessions.
Questions
You have asked for confirmation of the following statements:
1) Membership fees in the XXXXX are exempt from GST, having a regard to provisions of section 2 of Part VI to Schedule V of the ETA.
2) The registration fees for the annual conference of the XXXXX are similarly exempt.
Conclusion
1) Memberships supplied by the XXXXX are exempt of the GST pursuant to section 2 of Part VI to Schedule V of the ETA.
2) Registration fees for the annual conference supplied by the XXXXX are also exempted by section 2 of Part VI to Schedule V.
Analysis
Generally speaking, memberships supplied by a charity will be exempt from the GST by virtue of section 2 of Part VI to Schedule V of the ETA. There are however, certain supplies of memberships that are specifically excluded from this general exemption.
For instance, pursuant to subsection 2(j) of Part VI, memberships that entitle individuals to free or discounted admissions to museums, theatres, recreational complexes or other "places of amusement" as defined in subsection 123(1) of the ETA will be taxable. Similarly, memberships that entitle individuals to use the facilities of a place of amusement or to participate in recreational or athletic activities will be taxable. However, these memberships might still be exempt if the value of these benefits is insignificant (i.e., less than 30%) in relation to the value of the membership fee.
In addition, subsection 2(j) of Part VI provides that memberships supplied by a charity that entitle a person to supervision or instruction in any recreational or athletic activity are also taxable.
As there is no indication that members of the XXXXX receive any benefits of this nature, the memberships supplied by this organization will be exempted by section 2 of Part VI to Schedule V.
Admissions supplied by a charity to attend a seminar, conference or similar event are also exempted by section 2 of Part VI to Schedule V unless the admission is supplied by a charity that is a university or public college. As the XXXXX is neither a university or a public college, it will not be required to charge GST in respect of registration fees to attend its annual multi-day conference or its continuing educational seminars.
I hope that this information will be of assistance. If you have any further questions on these matters, please do not hesitate to contact Elaine Bonnah at 952-6761 x
Yours truly,
J.A. Venne
Director
Tax Policy - Special Sectors
GST Policy and Legislation
| c.c.: |
J. Houlahan
E. Bonnah XXXXX |
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