25 July 2002 GST/HST Interpretation 41448 - Staff Retreat Held Off Reserve By A Band Or Band-empowered Entity

This is further to your e-mail of XXXXX, in which you requested our comments regarding the subject matter.

Under Technical Information Bulletin B-039R "GST Administrative Policy - Application of GST to Indians" (TIB-039R), Indian bands and band-empowered entities are required to pay GST/HST on their off-reserve purchases of transportation, short-term accommodation, meals and entertainment.

A band or band-empowered entity may recover, through the rebate mechanism, GST/HST paid on these off-reserve purchases when they are acquired for band management activities or for real property on reserve. This is done by filing a code 8 rebate claim pursuant to section 261 of the Excise Tax Act.

The benefit of a code 8 rebate to recover GST/HST on off-reserve purchases of transportation, short-term accommodation, meals and entertainment acquired for band management activities is available only where an Indian band or band-empowered entity, as defined in TIB-039R:

•   paid GST/HST on off-reserve purchases of transportation, short-term accommodation, meals and entertainment acquired in the course of conducting band management activities;

•   paid an allowance to a band official to cover their off-reserve purchases of transportation, short-term accommodation, meals and entertainment acquired in the course of conducting band management activities;

•   reimbursed a band official for their off-reserve purchases of transportation, short-term accommodation, meals and entertainment acquired in the course of conducting band management activities.

Administratively, the term "band official" has been defined as a person authorized to represent the Indian band or band-empowered entity in an official capacity. Generally, band officials are employees, officers, chiefs and members of the band council and authorized band members (which may include elders of the band). The term band official does not include contractors, consultants, or other self-employed persons who are providing services to a band or band-empowered entity.

TIB-039R defines the term "band management activities" as "activities or programs undertaken by a band or band-empowered entity that are not commercial activities for which they would otherwise be entitled to an input tax credit. In determining whether the acquisition of a supply is for band management, the output of the activity or program will be the determining factor, as opposed to the objectives of the activity or program ..."

Band management activities are those activities conducted by bands and band-empowered entities with regard to their normal administration, programs, services and activities that are designed and/or are delivered for the well-being or assistance of band members and are generally similar to those provided by other levels of government. These include, for example, activities related to business development, staff training, social assistance, education, and housing.

In the case at hand, it is our understanding that a code 8 rebate claim has been filed by a band or band-empowered entity to recover the GST/HST it paid on a staff retreat held at a health ranch. The invoice lists:

XXXXX You have asked whether the expenses incurred by the entity, as itemized above and in Dwaine Lewis' e-mail of XXXXX, to Trevor Ramsay qualifies for tax relief through the rebate mechanism. Dwaine and Trevor, who both work at the Summerside Tax Office, asked for your comments on this matter.

In our view, a staff retreat will qualify as a band management activity provided:

•   it is sponsored by an "Indian band" or "band-empowered entity", as defined in TIB-039R;

•   it is for consumption or enjoyment of staff members (i.e., band officials) of the band or band-empowered entity;

•   staff members attend the staff retreat in an official capacity;

•   it is open to all staff members (or is open to all staff members of an identifiable group, such as a unit, should the band or band-empowered entity have a large number of staff members) and is not restricted to selected staff members;

•   it is not simply a non-work related social event;

•   it is held at a business location;

•   the supplies in respect of the staff retreat are purchased by the band or band-empowered entity;

•   the expenses incurred by the band or band-empowered entity for each staff member in respect of the staff retreat are reasonable in the circumstances.

Accordingly, where a staff retreat held by a band or band-empowered entity meets the conditions described above, the band or band-empowered entity will be entitled to claim a code 8 rebate to recover the GST/HST it paid on its off-reserve purchases of short-term accommodation, meals, and entertainment associated with the staff retreat.

With respect to the case at issue, officials at the Summerside Tax Office may wish to confirm with the band or band-empowered entity in question that the conditions set out above are met. Note that the above conditions should not be treated as an all-encompassing checklist. Rather, they are suggested only as guidelines.

If it is found that the staff retreat meets the conditions described above and therefore qualifies as a band management activity, the rebate claim submitted by the band or band-empowered entity to recover the GST/HST paid on its off-reserve purchases of accommodation, a sleigh ride and activities or treatments acquired in the course of sponsoring a staff retreat at a health ranch may be processed.

We have taken the liberty of passing on these comments to Dwaine and Trevor at the Summerside Tax Office. Should you have any further questions or require clarification on the above matter, please call me at (613) 954-7957.