28 October 1998 GST/HST Interpretation HQR0000555 - Tax Treatment of Second Language Instruction

This is in reply to an inquiry, dated March 1, 1996, from XXXXX of your office, on the above-noted subject. (We enclose a copy of XXXXX letter for your convenience.)

Specifically, the question was whether an individual providing second language instruction in either English or French can be an "organization that is established and operated primarily to provide instruction in languages". We have clarified the Department's position on the word "organization" in section 11 of Part III of Schedule V of the ETA ("section 11"). Accordingly, a sole proprietorship operated by an individual would qualify as an "organization" for the purposes of section 11.

Please note that there is no requirement that individuals operating as sole proprietorships register with provincial ministries to qualify as an "organization". This was the advice sent to XXXXX, in a letter dated November 22,1993, (a copy is enclosed). However, this is no longer the Department's position and we ask that you disregard this aspect of the letter to XXXXX[.]

We enclose a copy of a ruling on this subject sent to XXXXX and direct you to page 3 for an explanation of our position regarding "established and operated primarily to provide instruction in languages".

I hope you find this information helpful. If you have any questions or comments, please contact me at 954-5125.