Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 245851
Business Number: […]
Dear [Client]:
Subject: GST/HST interpretation
Collection and remittance of tax on supplies of short-term accommodation through an accommodation platform
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to the collection and remittance obligations of GST/HST on supplies of short-term accommodation through an accommodation platform.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand the following from your correspondence submitted and our telephone conversations on [mm/dd/yyyy] and [mm/dd/yyyy]:
1. You, […], are registered for GST/HST purposes, as a sole proprietor, under subdivision D of Division V (regular GST/HST registration regime) with a GST/HST registration number of […].
2. You make supplies of short-term accommodation over […][the Company’s Platform]. The property which is utilized for these supplies is located in [Canada]
3. […][The Company] is registered for GST/HST purposes under the simplified GST/HST registration regime under the Business Number […](footnote 1) effective [mm/dd/yyyy].
4. Prior to [mm/yyyy], you charged, collected and remitted the GST/HST on such supplies of short-term accommodation made over [the Company’s Platform].
5. In [mm/yyyy], you were notified by [the Company] of a platform change in regard to the charging, collection and remittance of the GST/HST on such supplies of short-term accommodation through [the Company’s Platform]. You state you were given the following options by [the Company]:
“Option 1 - […][direct quote from incoming letter].”
(tax inclusive)
“Option 2 - […][direct quote from incoming letter]
(tax extra)
6. You noted “I chose to go with Option 2 […][direct quote from incoming letter]”. You also consulted your accountant at that time and was told that both options were viable therefore you should not be concerned.
7. You then changed your accountant in [yyyy] and was advised by your new accountant that you should be the one collecting and remitting the GST/HST as you are a GST/HST registrant.
8. You reached out to [the Company] to confirm that they were charging, collecting and remitting GST/HST on your behalf and received an email stating: […][direct quote from incoming letter] However, [the Company] was not able to provide any reports which confirmed this.
9. Upon advisory of your new accountant, you calculated your GST/HST liability for the period of [mm/yyyy] to [mm/yyyy], of approximately $[…], and “double paid” this amount to the Canada Revenue Agency (CRA) through your GST/HST return for your annual reporting period ending [mm/dd/yyyy] for your supplies of short-term accommodation made through [the Company’s Platform] . You believe this has resulted in both parties, [the Company] and yourself, remitting GST/HST on your taxable supplies for the period of [mm/yyyy] to [mm/yyyy].
10. From [mm/dd/yyyy]through [mm/dd/yyyy], you state that [the Company] continued to charge, collect and remit the GST/HST (footnote 2) on your supplies of short-term accommodation over [the Company’s Platform]. Effective [mm/dd/yyyy], you have been the only party charging, collecting and remitting GST/HST on your supplies over [the Company’s Platform].
INTERPRETATION REQUESTED
You would like confirmation as to what your obligations are in terms of charging, collecting and remitting the GST/HST on your supplies of short-term accommodations over [the Company’s Platform] as well as guidance in regard to how you may receive a refund for the amounts of GST/HST you “double paid” during the period of [mm/yyyy] to [mm/yyyy].
INTERPRETATION GIVEN
Supply of short-term accommodation made through an accommodation platform
The CRA is responsible for administering the ETA, which governs the application of the GST/HST. The ETA generally requires every registrant making a taxable supply in Canada to collect the GST/HST from the purchaser and remit it to the CRA. The ETA was amended, effective July 1, 2021, to include new GST/HST provisions that generally apply to non-resident suppliers, distribution platform operators and accommodation platform operators that participate in the digital economy.
Registered supplier of short-term accommodation
Under the new digital economy provisions and more specifically pursuant to subsection 211.13(3), where an accommodation platform operator (footnote 3), registered for GST/HST under the simplified regime (footnote 4), facilitates the making of supplies of short-term accommodation (footnote 5) located in Canada through its accommodation platform (footnote 6), on behalf of non-registered suppliers (i.e. hosts), and where the recipients (i.e. guests) of short-term accommodation did not provide evidence satisfactory to the Minister that they are registered under the regular GST/HST regime, the accommodation platform operator is considered to be the supplier of the short-term accommodation. In such circumstances, the accommodation platform operator registered under the simplified regime is required to charge, collect and remit the GST/HST on those supplies it facilitated.
However, registered suppliers that are making taxable supplies of short-term accommodation located in Canada through an accommodation platform continue to be responsible for charging, collecting and remitting the GST/HST on those supplies. Also, registered suppliers should ensure that they have communicated their GST/HST registration number to the accommodation platform operator and ensure appropriate collection and remittance of GST/HST on their supplies of short-term accommodation.
For more information on the new digital economy rules, please visit our website at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-economy.html
Collection and remittance of Tax
Under Policy Statement P-131R, Remittance of tax collected by a person other than the supplier in limited circumstances, the CRA confirmed that it does not intend to collect tax twice on the same supply, and where the supplier and another person are both required to account for the tax, the liability to account for the tax of the supplier or the other person will be discharged where one of them accounts for the tax in its net tax calculation and remits the tax to the CRA.
Policy Statement P-131R is subject to certain exceptions and its application is at audit's discretion at the time of an audit and based on the facts of the case at hand.
For more information on this subject, please see GST/HST Policy Statement P-131R, Remittance of tax collected by a person other than the supplier in limited circumstances, which you can find at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p-131r
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 873-355-5326.Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287 or by fax to 1-418-566-0319.
Sincerely,
David Agbetiafa
Rulings Officer
Digital Economy Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
FOOTNOTES
1 As validated on the simplified GST/HST registry and available for consultation by the general public
2 As per our telephone conversation of [mm/dd/yyyy], you indicated that you were in the process of filing your GST/HST return for the reporting period ending [mm/dd/yyyy] and were considering “double paying” the GST/HST for the supplies made over [the Company’s Platform] from [mm/dd/yyyy] through [mm/dd/yyyy]. You also indicated that before proceeding to do so, you considered awaiting further potential information within the letter to be received from GST/HST Rulings Directorate.
3 Under subsection 211.1(1), an “Accommodation Platform Operator” is defined as a person (other than the supplier of the short-term accommodation) that controls or sets the essential elements of the transaction between a supplier of short-term accommodation and the recipient, or if no such person exists, it would be a person that is involved, directly or through arrangements with third parties, in collecting, receiving or charging the consideration for the supply of short-term accommodation and transmitting that consideration to said supplier.
4 [the Company] is registered under the simplified regime. For more information, please consult the registry for simplified registered suppliers at : https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-economy-gsthst/confirming-simplified-gst-hst-account-number.html
5 Under subsection 123(1), a “Short-term accommodation” is defined as a residential complex or a residential unit that is supplied to a recipient by way of lease, licence or similar arrangement for the purpose of its occupancy by an individual as a place of residence or lodging, if the period throughout which the individual is given continuous occupancy of the complex or unit is less than one month.
6 Pursuant to subsection 211.1(1), an “Accommodation Platform” is defined as a digital platform through which a person facilitates the making of supplies of short-term accommodation situated in Canada by another person that is not registered under the regular GST/HST.
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