CRA rules that a gift certificate need not have a stated monetary value

By virtue of ETA s. 181.2, the use of a gift certificate to pay for a supply is treated in the same manner as a money payment, and issuances and sales of gift certificates are deemed not to be supplies. In CIBC, the majority pointedly declined to comment on the finding in the Tax Court below “that in order to qualify as a gift certificate, the property must have attributes similar to money.”

Before concluding that, for example, a gift card available in digital form and without a stated cash value, that could be applied for an online time-limited subscription to use software, qualified as a gift certificate, CRA ruled:

• A gift certificate can be in physical or digital format (e.g., a digital code) to qualify
• The CIBC decision has not affected CRA’s current policy in P-202.
• “The CRA will continue to accept that a stated monetary value is not required on a gift certificate where it can be easily determined by the parties involved in the transaction or where the gift certificate is for a supply of a specified product or service identified on the certificate as per P-202.” – which is a question of fact.
• A gift card that entitles a person to redeem the card for a particular product or service, or that is redeemable for a time-limited (e.g., 6 months) subscription service will still qualify as a gift certificate where all the attributes listed in P-202 are met.

Neal Armstrong. Summary of 11 August 2022 GST/HST Ruling 210068r under ETA s. 181.2.