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: 247942
Business Number: […]
Dear [Client]:
Subject: GST/HST interpretation
Supply 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 supply 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.
Based on the information provided in your letter of [mm/dd/yyyy], we understand the following:
1. You are a sole proprietor operating a vacation rental property titled […].
2. You are currently registered for GST/HST purposes effective [mm/dd/yyyy] under the above noted business number.
3. You are making supplies of short-term accommodation of your vacation rental property located in […][a non-participating province A].
4. The supplies of short-term accommodation are all facilitated through […][the Company’s Platform] and you are a host and user of [the Company’s Platform].
5. According to the conversations between you and […][the Company], […], [the Company] notified that as of [mm/dd/yyyy], it will start to collect and remit the GST/HST on bookings made on its platform, on behalf of hosts that did not provide their GST/HST registration number. You explained that, based on your understanding at the time, [the Company] would collect and remit the GST to the Canada Revenue Agency (CRA).
6. You indicated in your letter that you received a call from CRA requesting you to file your GST/HST returns. However, you are uncertain about how to address the GST charged by [the Company] on the supplies of short-term accommodation made through its platform.
7. Pursuant to the information you provided from your discussions with [the Company] , [the Company] advised that as you have not provided your GST/HST registration number, they are collecting and remitting the GST on your behalf to your local authority (the CRA).
8. You explained in your letter that [the Company] advised that GST is included in the […][taxes] collected on each booking.
9. You have indicated that, from your review of the information on the CRA website relevant to your circumstances, you understand that [the Company], as a platform operator, is required to charge and collect the GST on the supplies of short-term accommodation it facilitated.
RULING REQUESTED
You would like to know your tax collection and remittance obligations on the supply of short-term accommodation made through an accommodation platform.
As noted in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, a ruling provides the CRA’s position on specific provisions of the legislation as these relate to a clearly defined fact situation of a particular person, and where all of the relevant facts and supporting documentation have been presented in writing. As we are not in possession of all of the pertinent facts, we are unable to provide a ruling. However, we are pleased to provide an interpretation of the relevant ETA provisions for your assistance.
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 1), registered for GST/HST under the simplified regime (Footnote 2), facilitates the making of supplies of short-term accommodation (Footnote 3) located in Canada through its accommodation platform (Footnote 4), 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
It is important to note that despite these provisions, an accommodation platform operator and a supplier may together agree on a method to collect and remit the GST/HST. Whether those arrangements can be used under the ETA depends on specific facts. Also, these arrangements are private business decisions made by the supplier (host) and the other person (platform).
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 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 905-706-8742.
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.
Sincerely,
Teresa Lau
Senior Rulings Officer
Digital Economy Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
FOOTNOTES
1 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.
2 […][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
3 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.
4 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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