File 11842-8
XXXXX June 26, 1995
Dear XXXXX
This letter concerns a request from XXXXX of your Directorate that we review a letter dated February 10, 1995, which you received from XXXXX , a colonel in the XXXXX Air Force, and XXXXX to the XXXXX XXXXX, with a view to providing information on Goods and Services tax (GST) relief to visiting forces units and their personnel which may assist you with your response to XXXXX
XXXXX suggests that "tax policy be reviewed and a method devised to exempt assigned personnel from paying the GST on goods and services" as these persons do not receive diplomatic privileges. He states that Canadians assigned to similar posts in the XXXXX have an advantage as there is no federal sales tax XXXXX
Ms. Joanne Hoople of my staff has discussed XXXXX suggestions with XXXXX of the XXXXX XXXXX office. She explained to him that it is the role of the Department of Finance rather than Revenue Canada to review tax policy pertaining to visiting forces units and visiting forces personnel with your department.
The application of the GST is very broad: under subsection 165(1) of the Excise Tax Act, every recipient of a taxable supply made in Canada is required to pay the GST in respect of a supply. Visiting forces units and their personnel are required to pay GST in respect to taxable supplies which are acquired in or imported into Canada unless a specific statutory exemption exists. Revenue Canada administers the provisions of such statutes, whether under the Excise Tax Act (ETA), the Financial Administration Act or other legislation, such as the Visiting Forces Act and related regulations.
Our department has administered GST relief since its introduction January 1, 1991, to visiting forces units and personnel in accordance with the following:
• Customs Tariff Item 9810.00, under the Customs Tariff Act, which provides duty and tax relief to visiting forces units on importation for official use (Part V, ss. 24(1) of the VFA);
• the Visiting Forces Personnel Remission Order, which provides duty and tax relief on temporary importation of visiting forces personnel and their dependants upon their arrival to Canada (Part V, ss. 24(2), s. 25 of the VFA);
The following Orders in Council, retroactive to January 1, 1991, were passed, or amended for GST, under section 23 of the FAA:
• the Visiting Forces Remission Order, which provides GST relief, by rebate, on purchases, in Canada, of goods and services for the official use of visiting forces units stationed in Canada;
• the Visiting Forces and Visiting Forces Personnel Alcoholic Beverages Remission Order, which provides duty and tax relief on the purchase of alcoholic beverages to visiting force units and to their personnel provided these are purchased from a provincial liquor authority outlet.
Remission orders which were not amended to include relief from GST include the following:
• The Visiting Forces - Automobiles Remission Order, under the FAA, which formerly provided customs duty, federal sales and excise tax relief under certain conditions to a member of a visiting force purchasing a motor vehicle for use while posted in Canada. Customs duty and excise tax relief are still provided.
• The NATO Common Infrastructure Remission Order, under the NATO Act, which provides the remission of customs duty and excise taxes on importation and domestic purchases in respect of certain goods used for the NATO common infrastructure project. GST relief to the three NATO sites located in Canada are provided under Customs Tariff Item 9810.00 and the Visiting Forces Remission Order.
We note that the XXXXX is one of the visiting forces units whose names are provided by your office to be eligible to claim a rebate of GST on official purchases in Canada under the Visiting Forces Remission Order. You may wish to inquire whether XXXXX official purchases are covered under this program, keeping in mind that the remission order is intended to provide relief to all visiting forces units in Canada, irrespective of size.
If you have any further questions, please contact Marilyn Viger, x Manager, Governmental Sectors and Federal/Provincial Relations, at 954-3551 or Joanne Hoople, Policy Officer, at 952-8533. XXXXX Yours truly,
J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations
Policy and Legislation
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