Place of Supply in a Province Specific Rules for Intangible Personal Property

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Place of Supply in a Province Specific Rules for Intangible Personal Property

GST/HST Memorandum 3-3-5-1
January 2025

This memorandum cancels and replaces, in part, Draft GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of supply rules for determining whether a supply is made in a province.

This memorandum explains the specific place of supply rules included in Schedule IX of the Excise Tax Act (ETA), and in the New Harmonized Value-added Tax System Regulations that determine whether a supply of certain types of intangible personal property that relate to passenger transportation services, tangible personal property, and real property made in Canada is made in a participating province and consequently subject to the provincial part of the HST in addition to the federal part of the HST.

This memorandum does not provide detailed information about the new digital economy measures applicable to digital economy businesses including businesses that are registered or required to be registered under the simplified GST/HST registration regime of Subdivision E of Division II of Part IX of the ETA, and to platform operators and non-resident digital economy businesses that are registered or required to be registered under the regular GST/HST registration regime. For more information, you may visit GST/HST for digital economy businesses: Overview or call the Canada Revenue Agency (CRA) at 1‑833‑585‑1463 (from Canada and the U.S.) or 1‑613‑221‑3154 (from elsewhere – collect calls are accepted).

The following memoranda in this series describe in detail the provincial place of supply rules for specific taxable supplies:

NOTE: This series of memoranda is being published in stages. Please continue to refer to GST/HST Technical Information Bulletin B-103 for additional information until the new memorandum that replaces the corresponding rules is published.

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Tax Act (ETA), and all references to the Regulations are to the New Harmonized Value-added Tax System Regulations. The information in this publication does not replace the law found in the ETA and its regulations.

If this information does not completely address your particular situation, you may wish to refer to the ETA or relevant regulation, or call GST/HST Rulings at 1‑800‑959‑8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.

If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1‑800‑567‑4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.

For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1‑855‑666‑5166.

GST/HST rates

Reference in this publication is made to supplies that are subject to the GST or the HST. 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%.

Table of Contents

General

1. Taxable supplies of property or services that are made in Canada are generally subject to the GST (the federal part of the HST) under subsection 165(1) at a rate of 5%. In addition, taxable supplies that are made in a participating province are subject to the provincial part of the HST under subsection 165(2) at the provincial rate for the province, which results in the application of the HST at the relevant harmonized rate.

2. In the case of a taxable supply that is made in Canada, it is necessary to determine the province where the supply is made in order to apply the applicable tax and rate. Provincial place of supply rules therefore exist for GST/HST purposes to determine the province in which a supply is deemed to be made.

3. Generally, the place of supply rules described in Chapter 3 of the GST/HST Memoranda Series are also used to determine if the First Nations goods and services tax (FNGST) applies to supplies where a First Nation or an Indigenous government has imposed the FNGST. For more information, refer to paragraphs 35 to 41 of this memorandum.

4. For further information regarding the legislative framework as well as the issues to consider before applying the provincial place of supply rules, refer to GST/HST Memorandum 3-3-2, Place of Supply in a Province – Overview. For further information regarding the general place of supply rules for intangible personal property, refer to GST/HST Memorandum 3-3-5, Place of Supply in a Province – General Rules for Intangible Personal Property.

5. Unless otherwise indicated, all references in this memorandum to supplies are to taxable (other than zero-rated) supplies made in Canada.

6. References in this memorandum to terms, concepts and examples are made in the context of the provincial place of supply rules for persons registered under Subdivision D of Division V of Part IX of the ETA (the regular GST/HST regime).

7. The rules explained in this memorandum do not apply to supplies of digital property or services made or facilitated by persons registered under the digital economy provisions of Subdivision E of Division II of Part IX of the ETA (simplified GST/HST registration). Subdivision E contains separate registration and place of supply rules for distribution platform operators and non-resident suppliers of digital property and services. For additional information on the digital economy provisions, go to GST/HST for digital economy businesses: Overview.

8. The Canada Revenue Agency (CRA) generally does not administer provincial taxes, duties or fees imposed by provincial legislation, other than the QST for persons that are selected listed financial institutions (SLFIs) for GST/HST or QST purposes or both. To determine whether any provincial taxes, duties or fees are applicable in respect of a supply (for example, the QST in Quebec for persons that are not SLFIs), contact the appropriate provincial taxation authority.

Applying the place of supply rules for intangible personal property

9. The general place of supply rules for intangible personal property are subject to specific place of supply rules that may apply to certain supplies of intangible personal property. In particular, there are specific place of supply rules for intangible personal property that relates to passenger transportation services, tangible personal property and real property, which are discussed in this memorandum. In addition, specific place of supply rules for intangible personal property to which the telecommunication service or postage rules apply may be found in GST/HST Memorandum 3-3-6-1, Place of Supply in a Province – Specific Rules for Services and GST/HST Memorandum 3-3-7, Place of Supply in a Province - Transportation respectively.

10. Where the specific place of supply rules do not determine the place of supply of a particular type of intangible personal property because the conditions for the application of those rules are not met, it is the general place of supply rules for intangible personal property that will determine the place of supply of the intangible personal property. The general rules are discussed in GST/HST Memorandum 3-3-5.

11. The following flowchart illustrates how the specific place of supply rules for intangible personal property apply:


Specific Rules for Intangible Personal Property – Applying the rules


Flow chart – Text version

Does the intangible personal property (IPP) (other than IPP to which the postage or telecommunication services rules apply) relate to either passenger transportation services (Section 22 of the Regulations), tangible personal property (Section 10 of the Regulations) or real property (Section 9 of the Regulations).

  • If the answer is No, the supply is made in the province determined by the General rules for IPP.
  • If the answer is Yes, proceed to the next step

Are the conditions for the place of supply rules for that IPP met?

  • If the answer is No, the supply is made in the province determined by the General rules for IPP.
  • If the answer is Yes, the supply is made in the province determined by that rule.

Intangible personal property that relates to passenger transportation services

12. Special rules apply for a supply of intangible personal property that is, or is similar to, a passenger transportation pass. Generally, a transportation pass entitles a person to receive either a fixed number of passenger transportation services to be provided at a later unspecified date, or to an unlimited number of passenger transportation services within a particular period. For further information on passenger transportation services, refer to GST/HST Memorandum 28-3, Passenger Transportation Services.

13. These rules apply if the supplier can determine where each passenger transportation service covered by the passenger transportation pass will originate and terminate. Specifically, section 22 of the Regulations will apply to a supply of intangible personal property that is, or is similar to, a passenger transportation pass entitling an individual to one or more passenger transportation services, in either case:

  • if, at the time the supply is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass could only begin in the same participating province and would terminate in Canada, the supply is made in that participating province
  • if, at the time the supply is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass could only begin in a non-participating province or would terminate outside Canada, the supply is made in a non-participating province

14. If these rules do not determine the place of supply of the transportation pass (for example, where the passenger transportation services covered by the passenger transportation pass may not always begin in the same participating province), the place of supply is determined under the general place of supply rules for intangible personal property. For further information, refer to GST/HST Memorandum 3-3-5.


Example 1 – Always begins in same participating province, terminates in Canada


An individual purchases a rail pass at a rail station in Ontario. The pass entitles the individual to ten one‑way trips from Ottawa, Ontario to Toronto, Ontario. When the individual wishes to travel, the individual will use the pass to obtain a rail ticket which specifies that the origin of the trip is Ottawa.

When the supply of the rail pass is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass would always begin in the same participating province (Ontario) and terminate in Canada.

The supply of the intangible personal property is therefore made in Ontario and is subject to the HST at a rate of 13%.


Example 2 – Always begins in same participating province, terminates in Canada


An individual purchases a rail pass at a rail station in Ontario that entitles the individual to ten one-way trips from Ottawa, Ontario to Montreal, Quebec. When the individual wishes to travel, the individual will use the pass to obtain a rail ticket which specifies that the origin of the trip is Ottawa.

When the supply of the rail pass is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass would always begin in the same participating province (Ontario) and terminate in Canada.

The supply of the intangible personal property is therefore made in Ontario and is subject to the HST at a rate of 13%.


Example 3 – Always begins in same participating province, terminates in Canada


An individual purchases a bus pass in Ontario. The pass entitles the individual to unlimited bus travel for one month anywhere in Newfoundland and Labrador.

When the supply of the bus pass is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass would always begin in the same participating province (Newfoundland and Labrador) and terminate in Canada.

The supply of the intangible personal property is therefore made in Newfoundland and Labrador and is subject to the HST at a rate of 15%.


Example 4 – Always begins in same participating province, terminates in Canada


At an Ontario rail station, an individual purchases a rail pass containing vouchers that entitles the individual to five one‑way trips in either direction between Ottawa, Ontario and Toronto, Ontario. The vouchers do not specify the origin of each trip since the trips will begin in either Ottawa or Toronto. When the individual wishes to travel, the individual will use one of the vouchers.

When the supply of the rail pass is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass would always begin in the same participating province (Ontario) and terminate in Canada.

The supply of the intangible personal property is therefore made in Ontario and is subject to the HST at a rate of 13%.


Example 5 – Always begins in non-participating province


An individual purchases a rail pass at a rail station in Quebec. The pass entitles the individual to ten one‑way trips from Montreal, Quebec to Ottawa, Ontario. When the individual wishes to travel, the individual will use the pass to obtain a rail ticket which specifies that the origin of that trip is Montreal.

When the supply of the rail pass is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass would always begin in a non-participating province (Quebec).

The supply of the intangible personal property is therefore made in a non‑participating province and is subject to the GST at a rate of 5%.


Example 6 – Always begins in non-participating province


An individual in Alberta purchases an air transportation pass that entitles the individual to five return trips from Calgary, Alberta to Ottawa, Ontario. When the individual wishes to travel, the individual will use the pass to obtain a return ticket which specifies that the origin of that trip is Calgary.

When the supply of the air transportation pass is made, the supplier can determine that each passenger transportation service covered by the passenger transportation pass would always begin in a non‑participating province (Alberta).

The supply of the intangible personal property is therefore made in a non‑participating province and is subject to the GST at a rate of 5%.


Example 7 – Terminates outside Canada


An individual purchases a rail pass at a rail station in Toronto, Ontario. The pass entitles the individual to a one‑way trip from Toronto to New York City, USA. When the individual wishes to travel, the individual will use the pass to obtain a rail ticket which specifies that the origin of that trip is Toronto.

When the supply of the rail pass is made, the supplier can determine that the passenger transportation service covered by the passenger transportation pass would terminate outside Canada.

The supply of the intangible personal property is therefore made in a non‑participating province and is subject to the GST at a rate of 5%.


Example 8 – No restrictions on where travel can begin or terminate


A business in Ontario purchases an air transportation pass for 10 one-way trips on any of a particular airline's routes in Canada and the USA, for use by its employees across Canada. The airline operates in all provinces in Canada and several states in the USA. When the business wishes to arrange travel, it uses the pass to obtain a plane ticket on one of the airline's routes.

When the supply of the transportation pass is made, the supplier cannot determine where each passenger transportation service will begin or whether the termination will be in or outside of Canada. Therefore, the special rules regarding intangible personal property that relates to passenger transportation services do not apply.

The place of supply is therefore determined under the general rules for the supply of intangible personal property. Based on the facts presented, refer to General Rule 3 in GST/HST Memorandum 3-3-5 for further information.

Intangible personal property that relates to tangible personal property

15. The general place of supply rules for supplies of intangible personal property do not apply to supplies of intangible personal property that relates to tangible personal property such as an option to purchase tangible personal property. These types of supplies are subject to specific place of supply rules in section 10 of the Regulations.

16. Generally, a supply of intangible personal property is considered to relate to tangible personal property if the intangible personal property relates to specific tangible personal property. It excludes a supply of a right to use tangible personal property by way of lease, licence or similar arrangement, since such a supply is deemed by subsection 136(1) to be a supply of the tangible personal property that is subject to different place of supply rules, as explained in GST/HST Memorandum 3-3-3, Place of Supply in a Province – Tangible Personal Property.

Ordinary location of property

17. The place of supply rules for intangible personal property that relate to tangible personal property rely on the ordinary location of that tangible personal property.

18. For purposes of the place of supply rules, the ordinary location of property is deemed by section 4 of Part I of Schedule IX to be the location where the supplier and the recipient mutually agree that the ordinary location of the property is to be at a particular time.

19. In other words, the mutual agreement of the supplier and recipient is determinative even where the property is actually located at a different place at the relevant time from what had been agreed upon.

20. The mutual agreement of the parties may change from time to time. As a result, even if the original written agreement for a supply of property specified that the property would be located in a particular province, the parties may mutually agree subsequent to the signing of the contract that the property is to be moved at a particular time to a location in another province. In this case, the latter location would be the ordinary location of the property at that particular time.

Rule 1 – Intangible personal property that relates to tangible personal property that is not ordinarily located primarily in participating provinces

21. Under paragraph 10(b) of the Regulations, a supply of intangible personal property that relates to tangible personal property that is ordinarily located in Canada is made in a non-participating province if the tangible personal property that is ordinarily located in Canada is not ordinarily located primarily in participating provinces. The expression not ordinarily located primarily means ordinarily located 50% or less.


Example 9 – Ordinarily located in a non-participating province


An Ontario company supplies another Ontario company with intangible personal property that relates to tangible personal property. Of the total tangible personal property, 40% is ordinarily located in Ontario and 60% in Quebec.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is not ordinarily located primarily in the participating provinces.

Therefore, the supply of the intangible personal property that relates to tangible personal property is made in a non‑participating province and is subject to the GST at a rate of 5%.

Rule 2 – Intangible personal property that relates to tangible personal property ordinarily located primarily in participating provinces

22. Under subparagraph 10(a)(i) of the Regulations, a supply of intangible personal property that relates to tangible personal property is made in a participating province if both:

  • the tangible personal property that is ordinarily located in Canada is ordinarily located primarily (more than 50%) in participating provinces
  • an equal or greater proportion of the tangible personal property is not ordinarily located in another participating province

Example 10 – Ordinarily located in a participating province


An Ontario company supplies to a Quebec company intangible personal property that relates to tangible personal property that is ordinarily located in Nova Scotia.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces and the greatest proportion of the tangible personal property that is ordinarily located in the participating provinces is ordinarily located in Nova Scotia.

The supply of the intangible personal property is therefore made in Nova Scotia and is subject to the HST at a rate of 15%.


Example 11 – Ordinarily located in Canada and outside Canada


An Ontario company supplies another Ontario company with intangible personal property that relates to tangible personal property that is located in Canada and outside Canada. Of the total tangible personal property, 20% is ordinarily located in Ontario and 80% in the USA.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces and the greatest proportion of the tangible personal property that is ordinarily located in the participating provinces is ordinarily located in Ontario.

The supply of the intangible personal property is therefore made in Ontario and is subject to the HST at a rate of 13%.


Example 12 – Ordinarily located in Canada and outside Canada


A Quebec company supplies an Ontario company with intangible personal property that relates to tangible personal property. Of the total tangible personal property, 30% is ordinarily located in Prince Edward Island, 10% in Ontario and 60% in the USA.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces (that is, 100% of the tangible personal property in Canada is ordinarily located in Ontario and Prince Edward Island), and the greatest proportion of the tangible personal property that is ordinarily located in the participating provinces is ordinarily located in Prince Edward Island.

The supply of the intangible personal property is therefore made in Prince Edward Island and is subject to the HST at a rate of 15%.


Example 13 – Ordinarily located in Canada and outside Canada


A Nova Scotia company supplies another Nova Scotia company with intangible personal property that relates to tangible personal property. Of the total tangible personal property, 5% is ordinarily located in Nova Scotia and 95% in the USA.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces and the greatest proportion of the tangible personal property that is ordinarily located in the participating provinces is ordinarily located in Nova Scotia.

The supply of the intangible personal property is therefore made in Nova Scotia and is subject to the HST at a rate of 15%.


Example 14 – Ordinarily located in Canada and outside Canada


A non‑resident company, registered under the regular GST/HST regime, supplies an Ontario company with intangible personal property that relates to tangible personal property. Of the total tangible personal property, 5% is ordinarily located in Ontario and 95% in the USA.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces and the greatest proportion of the tangible personal property that is ordinarily located in the participating provinces is ordinarily located in Ontario.

The supply of the intangible personal property is therefore made in Ontario and is subject to the HST at a rate of 13%.

Rule 3 – Highest tax rate where tangible personal property is located in participating provinces

23. If Rule 2 does not result in a supply of intangible personal property that relates to tangible personal property being made in a province because the tangible personal property is ordinarily located in equal proportions in two or more participating provinces, subparagraph 10(a)(ii) of the Regulations deems the intangible personal property to be supplied in the participating province among those provinces for which the tax rate is the highest.


Example 15 – Ordinarily located equally in two participating provinces


An Ontario company supplies another Ontario company with intangible personal property that relates to tangible personal property. Of the total tangible personal property, 50% is ordinarily located in Ontario and 50% is ordinarily located in New Brunswick.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces and in equal proportions in the participating provinces of New Brunswick and Ontario. The supply of the intangible personal property is made in the participating province among these two participating provinces that has the highest tax rate, which in this case is New Brunswick.

The supply is therefore made in New Brunswick and is subject to the HST at a rate of 15%.

Rule 4 – Participating provinces with the same highest tax rate

24. If a supply of intangible personal property cannot be determined under Rule 3 to be made in a single participating province because the highest tax rates for two or more participating provinces (each of which is referred to as a specified province) are the same, section 11 of the Regulations provides that the supply is made in the specified province based on the business address of the supplier that is most closely connected with the supply. If that address is:

  • located in a specified province, the supply is made in that province
  • not located in a specified province, the supply is made in the specified province that is closest in proximity, determined in any reasonable manner, to that address.

Example 16 – Ordinarily located equally in participating provinces with the same highest tax rate


A New Brunswick company supplies a Nova Scotia company with intangible personal property that relates to tangible personal property. Of the total tangible personal property, 50% is ordinarily located in New Brunswick and 50% in Newfoundland and Labrador.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces and in equal proportions in the participating provinces of New Brunswick and Newfoundland and Labrador. New Brunswick and Newfoundland and Labrador have the same highest HST rate of 15% among the two participating provinces (specified provinces) in which the tangible personal property is ordinarily located. As a result, the supply is made in the specified province among these two provinces where the business address of the supplier that is most closely connected with the supply is located, which in this case is New Brunswick.

The supply is therefore made in New Brunswick and is subject to the HST at a rate of 15%.


Example 17 – Ordinarily located equally in participating provinces with same highest tax rate


A company in Alberta supplies a New Brunswick company with intangible personal property that relates to tangible personal property. Of the total tangible personal property, 50% is situated in New Brunswick and 50% in Nova Scotia.

The tangible personal property that is ordinarily located in Canada to which the intangible personal property relates is ordinarily located primarily in the participating provinces and in equal proportions in the participating provinces of New Brunswick and Nova Scotia. New Brunswick and Nova Scotia have the same highest HST rate of 15% among the two participating provinces (specified provinces) in which the tangible personal property is ordinarily located.

The business address of the supplier is not located in a specified province. As a result, the supply is made in the specified province that is closest in proximity to the supplier's business address, which the supplier determines, using a reasonable manner, to be New Brunswick.

The supply is therefore made in New Brunswick and is subject to the HST at a rate of 15%.

Intangible personal property that relates to real property

25. Supplies of intangible personal property that relates to real property are subject to specific place of supply rules under section 9 of the Regulations.

26. Under subsection 123(1), real property "includes

(a) in respect of property in the Province of Quebec, immovable property and every lease thereof,

(b) in respect of property in any other place in Canada, messuages, lands and tenements of every nature and description and every estate or interest in real property, whether legal or equitable, and

(c) a mobile home, a floating home and any leasehold or proprietary interest therein".

27. Based on this definition, except for property in Quebec, there are very few supplies of intangible personal property relating to real property that would not be deemed to be a supply of real property. As a result, the place of supply rules explained in this section would only apply in limited circumstances, such as a supply of a vacation club membership relating to a number of vacation resorts.

28. The place of supply rules for supplies of intangible personal property that relates to real property require a determination of the proportion of real property that is situated in a province. The determination of the relevant proportion of the real property that is situated in a province is based on the physical size of the entire real property (for example, based on square footage, square yards or acres) pursuant to its legal description. The value of the real property or the number of properties (unless they are of equal size) is not relevant to this determination.

Intangible personal property that relates to real property in Canada and outside Canada

29. A supply of intangible personal property that relates to real property is deemed by subsection 142(1) to be made in Canada if the real property is situated in Canada and is deemed by subsection 142(2) to be made outside Canada if the real property is situated outside Canada. As a result, where the real property is both situated in Canada and outside Canada, the proportion of the supply of the intangible personal property 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 intangible personal property that relates to the real property that is situated outside Canada is considered to be made outside Canada.

30. It is therefore only the proportion of the supply of the intangible personal property that relates to real property that is situated in Canada that may be deemed to be made in a participating province and subject to the HST.

Rule 1 – Intangible personal property that relates to real property that is not situated primarily in participating provinces

31. Under paragraph 9(b) of the Regulations, a supply of intangible personal property that relates to real property is made in a non-participating province if the real property that is situated in Canada is not situated primarily in participating provinces. The expression not situated primarily means situated 50% or less.


Example 18 – Real property situated primarily in non-participating province


A New Brunswick company supplies a vacation club membership to a customer in Quebec. The vacation club membership entitles members to make a reservation at one of the company's vacation resorts located in New Brunswick and Quebec. Of the total real property available to members, 40% is situated in New Brunswick and 60% is situated in Quebec.

The supply of the vacation club membership is a supply of intangible personal property, while the vacation resorts are real property. The real property that is situated in Canada and to which the intangible personal property relates is not situated primarily in the participating provinces.

The supply of the intangible personal property is therefore made in a non-participating province and is subject to the GST at a rate of 5%.

Rule 2 – Intangible personal property that relates to real property situated primarily in participating provinces

32. Under subparagraph 9(a)(i) of the Regulations, a supply of intangible personal property that relates to real property is made in a participating province if both of the following apply:

  • the real property that is situated in Canada is situated primarily (more than 50%) in participating provinces
  • an equal or greater proportion of the real property is not situated in another participating province

Example 19 – Real property situated primarily in participating province


A New Brunswick company supplies a Quebec company with intangible personal property that relates to commercial real property that is situated entirely in New Brunswick.

The real property that is situated in Canada to which the intangible personal property relates is situated primarily in the participating provinces and the participating province in which the greatest proportion of the real property is situated is New Brunswick.

The supply of the intangible personal property is therefore made in New Brunswick and is subject to the HST at a rate of 15%.


Example 20 – Real property situated in Canada and outside Canada


A Newfoundland and Labrador company supplies intangible personal property that relates to real property to another company in Newfoundland and Labrador. Of the total real property, 20% is situated in Newfoundland and Labrador and 80% is situated in the USA.

The real property that is situated in Canada to which the intangible personal property relates is situated primarily in the participating provinces and the participating province in which the greatest proportion of the real property is situated is Newfoundland and Labrador.

The proportion of the supply of the intangible personal property that relates to the real property that is situated in Canada is therefore made in Newfoundland and Labrador and is subject to the HST at a rate of 15%. The proportion of the supply of the intangible personal property that relates to the real property that is situated outside Canada is deemed to be made outside Canada and is not subject to the GST/HST.


Example 21 – Real property situated in Canada and outside Canada


An Ontario company supplies an RV camping membership to an individual in New Brunswick that entitles the individual to reserve a camping site at one of the company's parks in Ontario, New Brunswick and the USA. Of the total real property available to members, 30% is situated in Ontario, 10% is situated in New Brunswick and 60% is situated in the USA.

The supply of the camping membership is a supply of intangible personal property, while the camping sites are real property. The real property that is situated in Canada to which the intangible personal property relates is situated primarily in the participating provinces (that is, in Ontario and New Brunswick) and the greatest proportion of the real property is situated in Ontario.

The proportion of the supply of the intangible personal property that relates to the real property that is situated in Canada is therefore made in Ontario and is subject to the HST at a rate of 13%. The proportion of the supply of the intangible personal property that relates to the real property that is situated outside Canada is deemed to be made outside Canada and is not subject to the GST/HST.


Example 22 – Real property situated in Canada and outside Canada


A New Brunswick company supplies intangible personal property that relates to real property to another New Brunswick company. Of the total real property, 5% is situated in New Brunswick and 95% in the USA.

The real property that is situated in Canada to which the intangible personal property relates is situated primarily in the participating provinces and the greatest proportion of the real property that is situated in the participating provinces is situated in New Brunswick.

The proportion of the supply of the intangible personal property that relates to the real property that is situated in Canada is therefore made in New Brunswick and is subject to the HST at a rate of 15%. The proportion of the supply of the intangible personal property that relates to the real property that is situated outside Canada is deemed to be made outside Canada and is not subject to the GST/HST.

Rule 3 – Highest tax rate where real property is located equally in participating provinces

33. If Rule 2 does not result in the supply being made in a province because the real property is ordinarily located in equal proportions in two or more participating provinces, subparagraph 9(a)(ii) of the Regulations deems the intangible personal property to be supplied in the participating province among those provinces for which the tax rate is the highest.


Example 23 – Real property situated equally in participating provinces


A Quebec company supplies intangible personal property that relates to real property to a company in Ontario. Of the total real property, 50% is situated in Ontario and 50% in Nova Scotia.

The real property that is situated in Canada to which the intangible personal property relates is situated primarily in the participating provinces and in equal proportions in the participating provinces of Nova Scotia and Ontario. The supply of the intangible personal property is made in the participating province among these two provinces that has the highest tax rate, which in this case is Nova Scotia.

The supply is therefore made in Nova Scotia and is subject to the HST at a rate of 15%.

Rule 4 – Participating provinces with the same highest tax rate

34. If a supply of intangible personal property cannot be determined under Rule 3 to be made in a single participating province because the highest tax rates for two or more participating provinces (each of which is referred to as a specified province) are the same, section 11 of the Regulations provides that the supply is made in the specified province based on the business address of the supplier that is most closely connected with the supply. If that address is:

  • located in a specified province, the supply is made in that province
  • not located in a specified province, the supply is made in the specified province that is closest in proximity, determined in any reasonable manner, to that address

Example 24 – Real property situated equally in participating provinces with same highest tax rate


A company in Nova Scotia supplies intangible personal property that relates to real property to a New Brunswick company. Of the total real property, one third is situated in Ontario, one third is situated in New Brunswick and one third is situated in Nova Scotia.

The real property that is situated in Canada to which the intangible personal property relates is situated primarily in the participating provinces and in equal proportions in the participating provinces of Ontario, New Brunswick and Nova Scotia. Nova Scotia and New Brunswick have the same highest tax rate among the three participating provinces in which the real property is situated. As a result, the supply is made in the province among these two provinces (specified provinces) where the business address of the supplier that is most closely connected with the supply is located, which in this case is Nova Scotia.

The supply is therefore made in Nova Scotia and is subject to the HST at a rate of 15%.


Example 25 – Real property situated equally in participating provinces with same highest tax rate


A company in Toronto, Ontario supplies intangible personal property that relates to real property to a company in Nova Scotia. Of the total real property, 50% is situated in Nova Scotia and 50% in Newfoundland and Labrador.

The real property that is situated in Canada to which the intangible personal property relates is situated primarily in the participating provinces and in equal proportions in the participating provinces of Nova Scotia and Newfoundland and Labrador. Nova Scotia and Newfoundland and Labrador have the same highest HST rate of 15% among the two participating provinces (specified provinces) in which the real property is situated.

The business address of the supplier is not located in a specified province. As a result, the supply is made in the specified province that is closest in proximity to the supplier's business address, which the supplier determines, using a reasonable manner, to be Nova Scotia.

The supply is therefore made in Nova Scotia and is subject to the HST at the rate of 15%.

First Nations goods and services tax – place of supply

35. The FNGST is a tax that may be imposed by a band council, other governing body of a First Nation or an Indigenous government on the lands that it governs. The FNGST at the rate of 5% applies to most supplies of property and services made on these lands.

36. Everyone has to pay the FNGST on the supply of property and services made on lands where the FNGST applies including Indians, Indian bands, or band-empowered entities. However, certain provincial and territorial governments do not pay the FNGST. The CRA uses the term Indian in this memorandum because it has legal meaning under the Indian Act.

37. For more information on the FNGST and the First Nations and Indigenous governments that impose the FNGST, go to First Nations Goods and Services Tax. You may also refer to GST/HST Technical Information Bulletin B-102, First Nations Goods and Services Tax – Place of Supply.

Supply is deemed to be made on FNGST lands in a non-participating province

38. The FNGST replaces the GST where the provincial place of supply rules deem the supply to be made on the lands where an FNGST is imposed and where those lands are located in a non-participating province. The supply is subject to the FNGST at the rate of 5%.

Supply is deemed to be made on FNGST lands in a participating province

39. The FNGST replaces the federal part of the HST where the provincial place of supply rules deem the supply to be made on the lands where an FNGST is imposed and where those lands are located in a participating province. The supply would be subject to the FNGST at the rate of 5%.

40. Provided the purchaser meets the criteria set out in GST/HST Technical Information Bulletin B-039, GST/HST Administrative Policy – Application of the GST/HST to Indians, the provincial part of the HST would be relieved. Where the purchaser does not qualify for relief of the provincial part of the HST under Technical Information Bulletin B-039, registered vendors are required to collect the provincial part of the HST in participating provinces unless relief of that part is provided by some other legislation or policy.

Supply is deemed to be made in Canada, but not on FNGST lands

41. Where the provincial place of supply rules deem the supply to not have been made on FNGST lands, and the supply is made in Canada, then either the GST or the HST will apply depending on whether or not the supply is deemed to be made in a participating province.

Further infomation

All GST/HST technical publications are available at GST/HST technical information.

To make a GST/HST enquiry by telephone:

  • for GST/HST general enquiries, call Business Enquiries at 1‑800‑959‑5525
  • for GST/HST technical enquiries, call GST/HST Rulings at 1‑800‑959‑8287

If you are located in Quebec, call Revenu Québec at 1‑800‑567‑4692 or visit their website at revenuquebec.ca.

If you are a selected listed financial institution (whether or not you are located in Quebec) and require information on the GST/HST or the QST, go to GST/HST and QST information for financial institutions, including selected listed financial institutions or:

  • for general GST/HST or QST enquiries, call Business Enquiries at 1‑800‑959‑5525
  • for technical GST/HST or QST enquiries, call GST/HST Rulings SLFI at 1‑855‑666‑5166


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Date modified:
2025-01-06