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Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th Floor
320 Queen Street
Ottawa, ON K1A 0L5XXXXX
XXXXX
XXXXX
XXXXXXXXXX
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Case: 25383January 16, 2001
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Subject:
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GST/HST INTERPRETATION
XXXXX Football Association
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Dear XXXXX:
Thank you for your letters of September 8, 1999 and February 4, 2000, with attachments, concerning the application of the Goods and Services Tax (GST) to the sale of tickets to high school football championship games and the GST registration of the XXXXX Football Association (the "Association"). Your letters were subsequently forwarded to this office for reply. We regret the delay in our response.
It is our policy not to issue an application ruling letter where a determination is one that rests on a question of fact, and the circumstances are such that all the pertinent facts cannot be established. In this situation, as noted below, there is a pertinent yet unresolved issue as to whether an agency relationship exists between Association and the XXXXX Corporation (the "Corporation") with respect to the ticket sales in question. For this reason, our reply is in the format of an interpretation letter rather than a ruling. However, we trust that our reply will sufficiently address your queries since, as we will explain, the issue of agency affects only who makes the supply in question, but not its tax status.
Based on the facts that you have provided, we understand that the Association is a non-profit organization that operates high school football in the Province XXXXX. The Association organizes provincial football playoffs, with the championship game for each division being held in XXXXX. The Corporation, which operates the stadium, and the Association entered into a Licence Agreement for the rental of the XXXXX for the 1998 playoff games. The XXXXX Ltd.) has an exclusive contract with the Corporation to act as ticket agent for the Corporation for the sale of tickets for all public events held in the stadium. In the present case, XXXXX sold tickets to the 1998 championship games and remitted the proceeds, including GST, to the Association. The Association is not registered for GST purposes.
Interpretation Requested
Are the ticket sales for the high school football championship games subject to GST?
If so, should the Association register for GST purposes?
Interpretation Given
It is apparent from the facts that you have provided that XXXXX is acting as an agent of the Corporation. However, it is unclear as to whether or not the Corporation is acting as an agent of the Association with respect to the supplies of admissions. If it is not acting as agent, then the Corporation would be viewed as the supplier of the tickets since it is making the ticket sales through XXXXX[.] On the other hand, if the Corporation is acting as an agent of the Association with respect to the ticket sales, then the Association itself would be regarded as the supplier of the tickets.
In any case, regardless of who the actual supplier is, we are of the view that the sales of tickets to the high school football championship games are exempt pursuant to section 11 of Part VI of Schedule V of the Excise Tax Act (the "ETA"). This provision sets out the following exemption:
A supply of a right to be a spectator at a performance, athletic event or competitive event, where all or substantially all of the performers, athletes or competitors taking part in the performance or event do not receive, directly or indirectly, remuneration for doing so (other than a reasonable amount as prizes, gifts or compensation for travel or other expenses incidental to the performers', athletes' or competitors' participation in the performance or event, or grants paid by a government or a municipality to the performers, athletes or competitors), and no advertisement or representation in respect of the performance or event features participants who are so remunerated, but does not include a supply of a right to be a spectator at a competitive event in which cash prizes are awarded and in which any competitor is a professional participant in any competitive event.
Although most of the exemptions set out under Part VI of the ETA apply only to public service bodies (such as the Association), the "amateur performance exemption," as set out above, applies to all persons, including both for-profit and not-for -profit organizations. It appears, then, that this exemption will apply, whether the supplier is the Corporation or the Association, assuming that all of the conditions set out in the exemption (above) are met. If so, then no GST should
have been charged on the ticket sales in question, regardless of whether the supplier is the Corporation or the Association. The fact that XXXXX handled the ticket sales would not change this outcome, since XXXXX was acing as an agent of the Corporation in making the sales.
With respect to the Association registering for GST purposes, it appears that there is no need for the Association to do so. Based on the facts that you have provided, the Association does not make taxable supplies, but only exempt supplies of ticket sales to amateur athletic events. Pursuant to subsection 240(1) of the ETA, every person who makes a taxable supply in the course of a commercial activity is required to be registered for GST purposes, unless it is a small supplier. Pursuant to subsection 148(1) of the ETA, a person that is a public service body is a small supplier if its revenues from taxable supplies do not exceed $50,000 over four consecutive calendar quarters. Although a small supplier is not required to register for GST purposes in that case, it may choose to do so if it is making taxable supplies in the course of a commercial activity.
Therefore, if the Association was a small supplier; that is, making taxable supplies in the course of a commercial activity and earning under $50,000 in revenues over four consecutive calendar quarters, it could choose to register. However, as pointed out above, the Association does not appear to be making any taxable supplies and so there is no requirement that it register for GST purposes. In fact, if its only supplies are exempt supplies, it could not even choose to register.
Finally, we note from the facts provided that XXXXX sold tickets to the 1998 championship games and remitted the proceeds, including GST, to the Association. It should be emphasized that, pursuant to subsection 225(1), amounts collected "as or on account of tax" are required to be remitted to the Canada Customs and Revenue Agency ("CCRA"). Accordingly, even if these supplies were exempt, the amounts you described that were collected "as or on account of tax" were required to be remitted to the CCRA.
The foregoing comments represent our general views with respect to the subject matter of your letters. 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 CCRA 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) 954-7936.
Yours truly,
J. Michael Place
Charities, NPOs, and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
XXXXX
| Legislative References: |
section 11 of Part VI of Schedule V of the ETA. |
| NCS Subject Code(s): |
I |
[i] (1) to be reported for GST by applicable party
[ii] (1) to be reported for GST by applicable party
[iii] (1) to be reported for GST by applicable party
[iv] (1) to be reported for GST by applicable party
[v] (1) to be reported for GST by applicable party
[vi] (1) to be reported for GST by applicable party
[vii] (1) to be reported for GST by applicable party
[viii] (1) to be reported for GST by applicable party
[ix] 1 A person who is registered or is required to be registered for GST/HST
[x] 2 Subsection 221(1) of the Excise Tax Act (ETA)
[xi] 3 Subsection 168(1) of the ETA
[xii] 4 Subsection 152(1) of the ETA
[xiii] 5 Section 225 of the ETA
[xiv] 6 Subsection 225(1) of the ETA
[xv] 7 Subsection 222(1) of the ETA
[xvi] 8 Section 223 of the ETA
[xvii] 9 Subsection 169(4) of the ETA and the Input Tax Credit Information (GST/HST) Regulations
[xxi] 13 Section 223 of the ETA
[xxii] 14 Subsection 223(2) of the ETA
[xxv] 17 Section 165 of the Excise Tax Act (ETA)
[xxvi] 18 Section 142 of the ETA for whether a supply is made in Canada and section 144.1 of the ETA and section 2 of Part V of Schedule IX to the ETA for whether a supply is made in a participating province
[xxvii] 19 Under section 1 of Part V of Schedule IX to the ETA, "Canadian element" means the portion of the service that is performed in Canada.
[xxviii] 20 Paragraph 2(b) of Part V of Schedule IX to the ETA
[xxix] 21 Subject to the rules explained in this paragraph, if the Canadian element of a service is performed primarily in the participating provinces, the supply of the service is regarded as made in the participating province in which the greatest proportion of the Canadian element is performed. This does not apply, however, if the place of negotiation for the supply of the service is outside Canada and all or substantially all of the service is not peformed in Canada.
[xxxi] 23 Section 5.1 of Part VII of Schedule VI to the ETA
[xxxii] 24 Section 4 of Part VII of Schedule VI to the ETA
[xxxiii] 25 Section 5 of Part VII of Schedule VI to the ETA
[xxxiv] 26 Section 5.1 of Part VII of Schedule VI to the ETA
[xxxv] 27 Section 5.1 of Part VII of Schedule VI to the ETA does not zero-rate a service of acting as an agent in making a supply of the non-taxable portion of a tour package to which section 1 of Part VI of Schedule VI applies.
[xxxvi] 28 Subsection 163(3) of the ETA
[xxxvii] 29 Per subsection 132(1) of the ETA, a person is considered to be a resident for GST/HST purposes and therefore does not qualify as a non-resident if, in the case of a corporation, the corporation is incorporated or continued in Canada and not continued elsewhere. This is also the case if, in the case of a partnership or unincorporated body if the member, or a majority of the members, having management and control are resident in Canada.
[xxxviii] 30 Section 5 of Part V of Schedule VI to the ETA - Also zero-rated under this provision is an agent's service of acting as an agent for a non-resident person if it is in respect of a supply to the non-resident person that is a zero-rated export.
[xxxix] 31 Section 143 of the ETA - Also precluding the supply to be deemed made outside Canada under this provision would be if the supply by the non-resident is an admission to a place of amusement, a seminar, an activity or an event where the non-resident did not acquire the admission from another person.
[xli] 33 Per subsection 123(1) of the ETA, a permanent establishment of a particular person generally means a fixed place of business of the person including a place of management, a branch or an office through which the person makes supplies or of another person (other than a broker, general commission agent or other independent agent) who acts in Canada on behalf of the person and through whom the particular person makes supplies in the ordinary course of a business.
[xlii] 34 Paragraph 142(1)(b) of the ETA
[xliii] 35 Section 2 of Part V of Schedule IX to the ETA
[xliv] 36 Paragraph 3(c) of Part VII of Schedule VI to the ETA
[xlv] 37 Section 1 of Part VI and sections 1, 2, and 3 of Part VII of Schedule VI to the ETA
[xlvii] 39 Section 4 of Part VI of Schedule IX to the ETA
[xlviii] 40 Section 4.1 of Part VI of Schedule IX to the ETA
[xlix] 41 Une personne qui est inscrite à la TPS/TVH ou qui est tenue de l'être
[l] 42 Paragraphe 221(1) de la Loi sur la taxe d'accise (LTA)
[li] 43 Paragraphe 168(1) de la LTA
[lii] 44 Paragraphe 152(1) de la LTA
[liii] 45 Article 225 de la LTA
[liv] 46 Paragraphe 225(1) de la LTA
[lv] 47 Paragraphe 222(1) de la LTA
[lvi] 48 Article 223 de la LTA
[lvii] 49 Paragraphe 169(4) de la LTA et le Règlement sur les renseignements nécessaires à une demande de crédit de taxe sur les intrants
[lxi] 53 Article 223 de la LTA
[lxii] 54 Paragraphe 223(2) de la LTA
[lxv] 57 Article 165 de la LTA
[lxvi] 58 Article 142 de la LTA pour si la fourniture est effectuée au Canada et article 144.1 de la LTA et article 2 de la partie V de l'annexe IX de la LTA pour si la fourniture est effectuée dans une province participante
[lxvii] 59 Aux termes de l'article 1 de la partie V de l'annexe IX de la LTA, l'" élément canadien " d'un service est la partie de celui-ci qui est exécutée au Canada.
[lxviii] 60 Alinéa 2b) de la partie V de l'annexe IX de la LTA
[lxix] 61 Sous réserve des règles expliquées dans ce paragraphe, si l'élément canadien d'un service est exécuté principalement dans les provinces participantes, la fourniture du service est considérée comme effectuée dans la province participante où la plus grande proportion de l'élément canadien est exécutée. Ceci ne s'applique pas, toutefois, si le lieu de négociation de la fourniture du service est à l'étranger et si la totalité, ou presque, du service n'est pas exécuté au Canada.
[lxxi] 63 Article 5.1 de la partie VII de l'annexe VI de la LTA
[lxxii] 64 Article 4 de la partie VII de l'annexe VI de la LTA
[lxxiii] 65 Article 5 de la partie VII de l'annexe VI de la LTA
[lxxiv] 66 Article 5.1 de la partie VII de l'annexe VI de la LTA
[lxxv] 67 L'article 5.1 de la partie VII de l'annexe VI de la LTA n'a pas pour effet de détaxer un service qui consiste à effectuer, à titre de mandataire, la fourniture de la partie non taxable d'un voyage organisé à laquelle s'applique l'article 1 de la partie VI de l'annexe VI.
[lxxvi] 68 Paragraphe 163(3) de la LTA
[lxxvii] 69 Conformément au paragraphe 132(1) de la LTA, une personne est réputée résider au Canada aux fins de la TPS/TVH et n'est donc pas admissible à titre de non-résident si, dans le cas d'une personne morale, elle est constituée ou prorogée exclusivement au Canada. Cela est également le cas si, dans le cas d'une société de personnes ou d'une société non dotée de la personnalité morale, le membre ou la majorité des membres la contrôlant et la gérant résident au Canada.
[lxxviii] 70 Article 5 de la partie V de la LTA - Cette disposition a également pour effet de détaxer le service de mandataire fourni par l'agent de voyage à une personne non résidente s'il se rapporte à une fourniture à la personne non résidente qui est une exportation détaxée.
[lxxix] 71 Article 143 de la LTA - De plus, la fourniture n'est pas réputée effectuée à l'étranger aux termes de cette disposition si la fourniture effectuée par le non-résident est un droit d'entrée à un lieu de divertissement, un colloque, une activité ou un événement si le non-résident n'a pas acquis le droit d'entrée d'une autre personne.
[lxxxi] 73 Aux termes du paragraphe 123(1) de la LTA, l'établissement stable d'une personne donnée désigne généralement une installation fixe de la personne par l'entremise de laquelle elle effectue des fournitures, y compris le siège de direction, la succursale ou le bureau, ou l'installation fixe d'une autre personne (à l'exclusion d'un courtier, d'un commissaire général et d'un autre mandataire indépendant) qui est au Canada mandataire de la personne donnée et par l'intermédiaire de laquelle celle-ci effectue des fournitures dans le cours normal d'une entreprise.
[lxxxiii] 75 Article 2 de la partie II de l'annexe IX de la LTA
[lxxxiv] 76 Alinéa 3c) de la partie VII de l'annexe VI de la LTA
[lxxxv] 77 Article 1 de la partie VI et articles 1, 2 et 3 de la partie VII de l'annexe VI de la LTA
[lxxxvii] 79 Article 4 de la partie VI de l'annexe IX de la LTA
[lxxxviii] 80 Article 4.1 de la partie VI de l'annexe IX de la LTA
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