6 May 1999 GST/HST Interpretation HQR0001176 - Trusts Providing Management Services

I refer to your memorandum of May 5, 1998 regarding the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the registration of trusts. Information relating to this issue was also provided in an email message from XXXXX[.] You advised that the issue regarding the registration of the XXXXX XXXXX was originally referred by the XXXXX office. Assistance was requested in determining the requirement to register pursuant to section 240 of the Excise Tax Act. Although the GST mainframe indicates that the XXXXX was in fact registered effective XXXXX you advised during our telephone conversation on April 15, 1999 that you still request our comments with respect to the issue of whether a trust can provide management services and who should register for purposes of the GST.

In your memorandum you indicated that although the risk of revenue loss for GST purposes appears minimal, the issue is significant for income tax purposes and, therefore, the Department may wish to have a consistent approach for both. Regarding the income tax issue, you provided information with respect to XXXXX. I understand that the facts of the XXXXX case are relevant to the issue of whether the XXXXX XXXXX should be registered. As we did not receive specific information with respect to the XXXXX other than the completed "Request For A Business Number (BN)" form RC1 E, my comments will be provided based upon the facts presented in the XXXXX XXXXX[.]

In your memorandum you indicated that, XXXXX, the trust is the entity providing management services and, therefore, for GST purposes the trust is the person engaged in a commercial activity. However, it is the Department's position that the trustee is the person providing the management services and, therefore, for GST purposes, the trustee is the person engaged in a commercial activity.

You have asked for our comments with respect to the following questions:

1. What advice should TIS officers provide to the Business Window in dealing with registration requests?

2. How should TIS officers respond to requests for rulings and interpretations regarding this issue?

The definition of "person" in subsection 123(1) of the Excise Tax Act includes a trust. The Department has registered trusts in circumstances where the trust is involved in a commercial activity. XXXXX. Therefore, it is possible to register the trust in situations where services are provided through the trust.

With respect to your questions, in order to provide advice to the Business Window or for responding to requests for rulings and interpretations, TIS officers must consider all relevant documents (e.g. the trust instrument and copies of contracts). It is necessary to consider these documents in order to determine who is providing the service. As indicated above, it is possible for a trust to be registered in specific circumstances where management services are provided.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 957-8222.