CRA provides a new Memorandum on the specialized IPP place-of-supply rules

CRA has published a new GST/HST Memorandum on the specialized rules respecting the place of supply of intangible personal property (IPP).

It gives, as an example of IPP relating to tangible personal property, an option to acquire TPP.

Those rules turn on the ordinary location of the TPP. It notes that as per Schedule IX, Pt. I, s. 4, the mutual agreement of the supplier and recipient as to the ordinary location of the TPP is determinative even where the property is actually located at a different place.

It notes that given the expansive definition of real property as it relates to the common law provinces, when it comes to the rules governing the place of supply of IPP relating to real property, there will be very few examples of such IPP. One example given is supplies of a vacation club membership relating to a number of vacation resorts.

It indicates that where real property is both situated in Canada and outside Canada, the proportion of the supply of the IPP that relates to the real property that is situated in Canada is considered to be made in Canada, while the proportion of the supply of the IPP that relates to the real property that is situated outside Canada is considered to be made outside Canada. This adoption of a bifurcated approach to the place of supply of the IPP appears to reflect an acceptance of Intrawest.

Neal Armstrong. Summaries of GST/HST Memorandum 3-3-5-1 “Place of Supply in a Province Specific Rules for Intangible Personal Property” January 2025 under New Harmonized Value-added Tax System Regulations, s. 22(1), s. 22(2), s. 9, s. 10, Schedule IX, Pt. I, s. 4, ETA s. 142(2).