2 August 2001 GST/HST Interpretation 32257 - VAT Refunds -

Dear XXXXX:

Thank you for your letter of May 8, 2000, which was addressed to our Summerside Tax Processing Centre, concerning the processing of VAT refunds in Canada. For clarification purposes, Canada has a Goods and Services Tax (GST), which is similar to VAT taxes in other countries.

I have been asked to respond to some of your questions. I apologize for the lateness of this response.

Interpretation Requested

I understand that Mr. Henry Richard of our GST/HST Returns Processing and Visitor Rebate Program has already responded to several or your questions, except in respect of the following issues:

4) Is there any reciprocal legislation between Canada and XXXXX, and other XXXXX, concerning GST refunds?

5) Is the eligibility to claim GST refunds by non-European companies or individuals related to a tax liability for VAT in the country in which the person or the company is domiciled?

9) Are there any reciprocal conditions applicable between Canada and XXXXX in regard to GST refunds/rebates?

Interpretation Given

Based on the information provided, I am pleased to provide you with the following interpretation.

Concerning issue number 4, Canada has no reciprocal legislation/agreements with XXXXX or any other country, concerning refunds or rebates of GST. Canada does have reciprocal agreements with other countries that may or may not be a VAT country. These agreements, conventions or tax treaties generally are in connection with income taxes, as opposed to the GST.

In regards to issue number 5, the eligibility to claim a GST refund/rebate in Canada does not depend on whether VAT applies in the country of residence of the claimant. So long as the conditions in respect of the refund/rebate eligibility are met, an eligible non-resident of Canada, regardless of the country of residence, may claim a refund/rebate of the Canadian GST. For example, non-resident individuals visiting Canada are entitled to claim a rebate of the GST paid on goods purchased by them while in Canada, provided they take the goods with them when they leave the country. So long as the goods are exported within 60 days after the goods are delivered to the visitor and an application for the rebate is filed with the Canada Customs and Revenue Agency (the CCRA) within one year from the date the goods are exported from Canada, the non-resident visitor would be entitled to a GST rebate.

Also, the GST legislation also provides for rebates of the tax paid on hotel, motel or other short-term accommodation provided to non-resident visitors to Canada. Visitors generally will claim their rebates either by mailing their claims directly to the CCRA or, if it is more convenient, claiming a cash rebate at participating duty-free shops when they leave the country.

With respect to issue number 9, the only relevant conditions for a refund/rebate of the GST are those contained in the applicable provision of the Excise Tax Act.

The foregoing comments represent our general views with respect to the subject matter of your particular questions. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Canada Customs and Revenue Agency with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 957-8220.

Yours truly,

Daniel E.B. Chamaillard
Senior Technical Analyst
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate