CRA finds that licence fees received from a registrant for worldwide rights to use copyright were fully subject to GST/HST

A registered resident individual who carried on a business of producing videos entered into an agreement with a Canadian “Web Publisher” under which the individual granted the Web Publisher the worldwide right to distribute and reproduce the videos in consideration for a percentage of the revenues generated. The Web Publisher posted the videos on a platform and was paid a percentage of the resulting advertising revenues.

In finding that all the consideration paid by Web Publisher to the individual was subject to GST/HST pursuant to ETA s. 142(1)(c), which deems a supply of intangible personal property to be made in Canada if it may be used in whole or in part in Canada, CRA stated:

[T]he rights are granted on a worldwide basis, without any restrictions on where they may be used, from which we conclude that they may be used in Canada.

Thus, by licensing to Web Publisher, the individual’s supply was subjected to GST/HST, whereas if the individual had dealt directly with the platform and it was a non-resident which was not registered under the regular registration provisions, the individual’s supplies would have been zero-rated.

Neal Armstrong. Summary of 26 June 2024 GST/HST Ruling 179543 under s. 142(1)(g).