3 April 2000 GST/HST Interpretation 25507 - Errors in Publications and Information in EARL

This memo is to advise that there are errors in the following publications and information in EARL:

•   RC2 The Business Number and Your Revenue Canada Accounts; and

•   Ernst and Young Commentary on EARL Paragraph 12,065 Membership Fees.

These errors have been brought to our attention by the South Western Ontario TIS Centre and we would request that they be amended with the next review/update.

RC2 The Business Number and Your Revenue Canada Accounts

Please replace the entire section (i.e., three paragraphs, inclusive) entitled Public Service Bodies Conducting GST/HST Taxable Activities found on page 12 of the publication (see enclosure) with the following two paragraphs:

The term "public service body" includes charities, non-profit organizations, municipalities, public colleges, universities, school boards, and hospitals. If your organization falls within this definition and your annual worldwide sales from taxable supplies of goods and services are more than $50,000, you have to register. However, charities are not required to register if their gross revenue in either of their two preceding fiscal years is $250,000 or less, even if their annual worldwide taxable sales are more than $50,000.

If you are a public service body who registered for the GST/HST because your worldwide taxable sales were more than $50,000, you may apply for your branches that fall under the $50,000 threshold (in taxable supplies) to be "designated small supplier divisions." This would relieve such branches of the requirement to collect tax on their taxable sales. For more information, contact your tax services office.

Ernst and Young Commentary on EARL Paragraph 12,065 Membership Fees

The final section in Paragraph 12,065 entitled "Membership Fees" (see enclosure) includes the following paragraph:

"Revenue Canada has indicated that significant will be interpreted to mean 30% or less. Therefore, if the value of discounts received by a member is in excess of 30% of the value of the membership fee, the discounts will be significant in relation to the consideration for the membership."

The above paragraph should be replaced with the following:

"CCRA has indicated that "insignificant" will be interpreted to mean "less than 30%". Therefore, if the value of discounts received by a member is 30% or greater than the membership fee, the discounts will be significant in relation to the consideration for the membership."

Thank you for your assistance with this matter. If you have any questions regarding the above, please contact Lorrie Grannary at 952-0420.