Unless otherwise stated, all legislative references are to the Excise Tax Act or, where appropriate, the GST/HST Regulations.

The CRA uses the term "Indian" as it has legal meaning under the Indian Act.

This page uses plain language to explain the most common tax situations. It is provided for information only and does not replace the law.

Table of contents

• Is this page for you?
  • GST/HST and Quebec
• What's New?
• Definitions
• What is the GST/HST?
• How does the GST/HST work?
  • Who charges the GST/HST?
  • Who pays the GST/HST?
• Taxable supplies
  • Taxable supplies (other than zero-rated)
  • Zero-rated supplies
• Exempt supplies
• Should you register?
  • Voluntary registration
  • Reporting the GST/HST
• Accommodation and hospitality supplies
  • Accommodation
    • Are long-term stays at my hotel taxable?
  • Accommodation – related supplies
  • Parking
  • Food and beverages
  • Banquet and catering services
  • Gratuities
• Deposits
• Coupons, gift certificates, and discounts
  • Reimbursable coupons
  • Non-reimbursable coupons
  • Other coupons
  • Gift certificates
  • Discounts
  • Third-party transactions
• Passenger transportation services
  • Terms used in this section
    • Passenger transportation service
    • Continuous journey
    • Taxation area
  • Domestic passenger transportation services
    • Which tax rate applies – GST or HST?
    • Sales of domestic passenger transportation services to travel providers
  • International passenger transportation services
    • Continuous journey that includes air travel
    • Continuous journey that does not include air travel
  • Other services provided with a transportation service
  • Sales of taxable property and services on board conveyances in Canada
  • Sales of goods and services on board conveyances in international travel
• Travel agencies
  • What is a travel provider?
  • When do I charge tax on commissions?
    • When are my services zero‑rated?
    • Which rate of tax applies – GST or HST?
  • Collecting and reporting the GST/HST
• Tour packages
  • What is a tour package?
    • What qualifies as short‑term or camping accommodation?
    • What is an all‑inclusive price?
    • Examples of tour packages
    • Examples of packages that are not tour packages for GST/HST purposes
  • How does the GST/HST apply to tour packages?
    • Domestic tour packages
    • Tour packages combining supplies that are taxable, exempt, and made outside of Canada
    • Foreign tour packages
• Conventions
  • What is a related convention supply?
• Domestic conventions
  • Is GST/HST registration required?
    • Sponsors
    • Organizers
    • Exhibitors
  • Charging tax for domestic conventions
    • Convention facilities
    • Admissions
    • Related convention supplies
    • Exhibition space
• Foreign conventions
  • Is GST/HST registration required?
    • Sponsors
    • Organizers
    • Exhibitors
  • Charging tax for foreign conventions
    • Convention facilities
    • Admissions
    • Related convention supplies
    • Exhibition space
  • Rebate for foreign conventions
    • Who can claim a rebate?
    • What expenses are eligible for the rebate?
    • Can I pay or credit a rebate amount?
    • How to pay or credit a rebate amount
• Rebate for non-resident exhibitors

Find out if this page is for you

This page gives information on how to charge the goods and services tax/harmonized sales tax (GST/HST) on
accommodation, tour packages, passenger transportation services, conventions, meeting facilities, and related convention supplies. It explains what is and is not considered to be a tour package for GST/HST purposes. It also explains rebates for foreign conventions and non-resident exhibitors and includes information on how Canadian suppliers can pay or credit certain rebate amounts to eligible persons.

Digital economy businesses

This page does not provide detailed information for 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 the digital economy provisions of Subdivision E of Division II of the Excise Tax Act (ETA) and to platform operators and non resident digital economy businesses that are registered or required to be registered under the normal GST/HST registration regime. You can refer to "GST/HST for digital economy businesses: Overview", or contact us at 1-833-585-1463 (from Canada and the U.S.) or 1-613-221-3154 (from elsewhere – collect calls are accepted) for more information.

GST/HST and Quebec

In Quebec, Revenu Québec generally administers the GST/HST. If the physical location of your business is in Quebec, you have to file your returns with Revenu Québec using its forms, unless you are a person that is a selected listed financial institution (SLFI) for GST/HST or Quebec sales tax (QST) purposes or both. For more information, see the Revenu Québec publication IN‑203‑V, General Information Concerning the QST and the GST/HST. If you are an SLFI, go to GST/HST and QST – Financial institutions, including selected listed financial institutions.

Definitions

Commercial activity means any business or adventure or concern in the nature of trade carried on by a person, but does not include:

• the making of exempt supplies
• any business or adventure or concern in the nature of trade carried on without a reasonable expectation of profit by an individual, a personal trust, or a partnership where all of the members are individuals

Commercial activity also includes a supply of real property, other than an exempt supply, made by any person, whether or not there is a reasonable expectation of profit, and anything done in the course of making the supply or in connection with the making of the supply.

Consumer means a particular individual who acquires or imports property or services for personal consumption, use, or enjoyment or the personal consumption, use, or enjoyment by another individual at the particular individual's expense. It does not include individuals who acquire or import property or services for their commercial activitiy or to make an exempt supply.

Coupon includes a voucher, receipt, ticket or other device that can be redeemed for a product or service or can be used to buy a product or service, but does not include a gift certificate or a barter unit.

Exempt supplies means supplies of property and services that are not subject to the GST/HST. GST/HST registrants generally cannot claim input tax credits to recover the GST/HST paid or payable on property and services acquired to make exempt supplies.

Input tax credit (ITC) means a credit that GST/HST registrants can claim to recover the GST/HST paid or payable for property or services they acquired, imported into Canada, or brought into a participating province for use, consumption, or supply in the course of their commercial activities.

Participating province means a province that has harmonized its provincial sales tax with the GST to implement the harmonized sales tax (HST). Participating provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, but do not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities, as defined in subsection 123(1) of the Excise Tax Act, are carried on in that area.

Person means an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or a body that is a society, a union, a club, an association, or a commission or other organization of any kind.

Property means any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share and a chose in action, but does not include money.

Registrant means a person that is registered or required to be registered for the GST/HST.

Service means anything other than:

• property
• money
• anything that is supplied to an employer by an employee in the course of employment

Supply means the provision of property or a service in any way, including sale, transfer, barter, exchange, licence, rental, lease, gift, or disposition.

Taxable supply means a supply that is made in the course of a commercial activity and is generally subject to the GST/HST (including zero-rated supplies).

Zero-rated supplies are supplies of property and services that are taxable at the rate of 0%. This means there is no GST/HST charged on these supplies, but GST/HST registrants may be eligible to claim ITCs for the GST/HST paid or payable on property and services acquired to provide these supplies.

What is the GST/HST?

The goods and services tax (GST) is a tax that applies to many supplies of property and services made in Canada.

The participating provinces harmonized their provincial sales tax with the GST to implement the harmonized sales tax (HST) in those provinces. Generally, the HST applies to the same base of property (for example, goods) and services as the GST. In some participating provinces, there are point-of-sale rebates equivalent to the provincial part of the HST on certain qualifying items. For more information, see Guide RC4022, General Information for GST/HST Registrants.

GST/HST registrants who make taxable supplies (other than zero‑rated supplies) in the participating provinces collect tax at the applicable HST rate. GST/HST registrants collect tax at the 5% GST rate on taxable supplies they make in the rest of Canada (other than zero-rated supplies). Special rules apply for determining the place of supply. For more information on the HST and the place-of-supply rules, see 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.

The HST rate can vary from one participating province to another. For the list of all applicable GST/HST rates, go to GST/HST calculator (and rates).

How does the GST/HST work?

If you are a GST/HST registrant, you generally have to charge and collect the GST/HST on taxable supplies (other than zero-rated supplies) you make in Canada. You must also file regular GST/HST returns to report that tax.

You can generally claim an ITC on your GST/HST return to recover the GST/HST paid or payable on purchases and expenses to the extent you use, consume, or supply them in your commercial activities.

For the consumer, there is no difference between zero-rated and exempt supplies of property and services because tax is not collected in either case. However, one of the differences for you, as the registrant, is that although you do not collect the GST/HST on zero-rated or exempt supplies of property and services, you can only claim ITCs for the GST/HST paid or payable on purchases acquired to make zero-rated supplies of property and services.

When you fill out your GST/HST return, deduct your ITCs from the GST/HST you charged your customers. The result is your net tax.

If the total amount of tax you charged is more than the amount of your ITCs, send the CRA the difference. If the total amount of tax you charged is less than the amount of your ITCs, you can claim a refund.

For more information, see Guide RC4022, General Information for GST/HST Registrants. If you are a non‑resident, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non‑Residents.

Who charges the GST/HST?

Generally, GST/HST registrants have to collect the GST/HST on all taxable (other than zero-rated) supplies of property and services they provide to their customers.

Who pays the GST/HST?

Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services (other than zero-rated supplies). However, in some situations, Indians, Indian bands and band-empowered entities are relieved of paying the GST/HST on taxable supplies. In addition, some groups and organizations, such as certain provincial and territorial governments, do not always pay the GST/HST on their purchases. For more information, go to GST/HST for businesses.

Taxable supplies

Most property and services supplied in or imported into Canada are subject to the GST/HST.

Taxable supplies (other than zero-rated)

The following are examples of taxable, other than zero-rated, supplies (for the list of all applicable GST/HST rates, go to GST/HST calculator (and rates):

• hotel and other short-term accommodation in Canada
• convention space and meeting rooms
• services provided by travel agents (with some exceptions)
• domestic tour packages
• most domestic passenger transportation by bus, train, ship, or aircraft
• trans–border air travel to the continental United States and the islands of St. Pierre and Miquelon
• international day trips by road or rail
• car rentals in Canada
• a service of ticket cancellation for domestic travel services
• taxi rides and commercial ride-sharing services
• restaurant meals
• most admissions to theatres, museums, and other places of amusement

Zero-rated supplies

Some supplies are zero-rated under the GST/HST – that is, GST/HST applies at a rate of 0%. This means that you do not charge GST/HST on these supplies, but you may be eligible to claim ITCs for the GST/HST paid or payable on property and services acquired to provide these supplies. The following are examples of supplies taxable at 0% (zero-rated):

• basic groceries such as milk, bread, and vegetables
• prescription drugs and drug-dispensing services
• certain medical devices such as hearing aids, and artificial teeth
• feminine hygiene products
• international passenger air travel, except to the continental United States and the islands of St. Pierre and Miquelon
• international passenger transportation by road and rail, except day trips
• most property and services supplied in Canada when exported under certain circumstances

For more information, see GST/HST Memoranda Series, Chapter 4, Zero-Rated Supplies.

Exempt supplies

Some supplies are exempt from the GST/HST – that is, no GST/HST applies to them. This means that you do not charge the GST/HST on these supplies of property and services, and you are generally not entitled to claim ITCs on property and services acquired to provide these supplies. Generally, you cannot register for the GST/HST if your business provides only exempt supplies; one exception is if you are a listed financial institution resident in Canada.

The following are examples of exempt supplies:

• most long-term residential accommodation (of one month or more) and residential condominium fees
• accommodation rented for $20 or less for each day of occupancy
• travel insurance provided by an insurance company
• ferry services (other than zero-rated) and the use of toll highways and toll bridges
• municipal transit services
• child care services where the primary purpose is to provide care and supervision to children 14 years of age or under for periods less than 24 hours per day. This does not include a service of supervising an unaccompanied child made by persons who provide taxable passenger transportation services.

Should you register?

You have to register for the GST/HST if both of the following apply:

• you provide taxable supplies in Canada (other than as a non-resident who does not carry on business in Canada)
• you are not a small supplier

Generally, you are a small supplier if the total amount of all revenues (before expenses) from your worldwide taxable supplies from all your businesses and those of your associates, is $30,000 or less ($50,000 for public service bodies) over the last four consecutive calendar quarters and in any one calendar quarter.

In determining the total amount of revenues from taxable supplies (including zero-rated supplies) of property and services made inside and outside Canada by you and your associates, do not include revenues from supplies of financial services, sales of capital property, and goodwill from the sale of a business. For examples of supplies that need to be included in this calculation, see Taxable supplies.

Voluntary registration

Although you generally do not have to register if you are a small supplier, you may be able to register voluntarily. If you register, you must charge the GST/HST on your taxable supplies of property and services and report that amount on your GST/HST return. You can also claim ITCs for the GST/HST paid or payable on purchases related to these supplies. You have to stay registered for at least one year before you can ask to cancel your registration.

If you choose not to register, you cannot charge the GST/HST, and you cannot claim ITCs.

For more information, go to GST/HST for businesses or see Guide RC4022, General Information for GST/HST Registrants, or Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents.

Reporting the GST/HST

If you are a GST/HST registrant, you have to file a GST/HST return for each reporting period (either monthly, quarterly, or annually) to report the total amount of the GST/HST you charged your customers during the reporting period. The GST/HST you report has to include amounts you billed or invoiced, even if the amounts have not yet been paid.

As a registrant, you can also claim ITCs on your return to recover the GST/HST paid or payable on purchases and expenses made in the course of your commercial activities.

When you fill out your return, you can deduct your ITCs from the GST/HST charged. If the tax you charged your customers is more than the tax paid or payable on your purchases, remit the difference to the CRA with your return. If the tax you charged your customers is less than the tax paid or payable, you can claim a refund on your return.

For more information, go to GST/HST for businesses or see Guide RC4022.

Accommodation and hospitality supplies

Accommodation

Generally, you have to charge the GST/HST when you rent out a suite or room in a hotel, motel, inn, boarding house, lodging house or other similar premises (collectively referred to as a hotel).

However, you do not have to charge the GST/HST if you rent a residential unit for $20 or less per day of occupancy, regardless of the rental period. A residential unit includes a house, an apartment and a suite or room in a hotel that is occupied by an individual as a place of residence or lodging under a lease, license or similar arrangement.

In addition, you do not have to charge the GST/HST if you rent a residential complex or a residential unit in a residential complex for occupancy as a place of residence or lodging by the same individual for a continuous period of one month or more.

When monthly room rentals are exempt from the GST/HST, how often the room charge is billed (for example, daily, weekly or monthly) does not change the exempt status, as long as the arrangement gives the individual or individuals continuous use or possession of the same room for at least one month.

Are long term stays at my hotel taxable?

A long term stay (a stay for continuous occupancy by the same individual for one month or longer) in a hotel is generally taxable because, in most cases, a hotel is not a residential complex.

However, under limited circumstances, a hotel could be a residential complex for GST/HST purposes and long term stays would not be taxable.

A hotel is considered to be a residential complex if more than 10% of all of the residential units in the hotel are, or are expected to be, rented for continuous possession or use of 60 days or more.

Calculation methods to determine status as a residential complex

If your hotel has rentals for less than 60 days and rentals for 60 days or more, use either the revenue method or the room supply method to determine if your hotel qualifies as a residential complex.

You can choose the method that is appropriate for your specific circumstances. Both methods are described in the example below.

The time period you can use to determine whether your hotel qualifies as a residential complex is flexible. However, the period must be reasonable for the particular rentals in question and you must use it consistently. We consider a one-year period appropriate. However, the period could differ depending on the nature of your operation, for example, a seasonal operation.

Accommodation – related supplies

The GST/HST applies to other supplies made to customers during their stay, regardless of the length of the stay or cost of the accommodation. These include:

• room service
• pay-per-view movies
• telephone, photocopies, and faxes
• laundry and dry cleaning

Parking

Generally, parking is taxable. However, parking is exempt if it is supplied for a period of at least one month to a guest in a residential complex and either of the following applies:

• the parking space is part of the residential complex (regardless of who supplies the parking space)
• the parking space is not part of the residential complex but is supplied by the accommodation provider and the use of the space is incidental to the use and enjoyment of the accommodation as a place of residence for individuals

Food and beverages

You charge the GST/HST on food and beverages sold in dining rooms, coffee shops, bars, lounges, and convention facilities and on food and beverages sold through room service.

However, the following supplies of food are zero-rated:

• food consisting of sweetened baked goods such as pies and cakes, muffins, tarts, doughnuts, cookies, and similar sweetened goods, not sold for consumption at the outlet and that is either:
  • pre-packaged for sale to consumers in quantities of six or more single servings
  • not pre-packaged for sale to consumers, and a consumer purchases six or more single servings at a time

Banquet and catering services

The GST/HST applies to most supplies of food and beverages catered in banquet and meeting rooms, or at on-site locations. This means that you charge and collect the GST/HST on such things as prepared platters, hot meals, and beverages. Wine-corking and any other supplies made to cater a banquet or meeting function are also taxable at the applicable GST/HST rate.

Gratuities

Gratuities that customers voluntarily give to employees are not taxable for GST/HST purposes. However, if you include a gratuity as part of the charge for a taxable service on an invoice to your customer, the GST/HST applies to the service charge.

Deposits

Do not collect the GST/HST when a customer gives you a deposit towards a taxable purchase. Collect the GST/HST on the deposit when you apply it to the purchase price.

If the customer does not make the purchase and loses the deposit, the forfeited deposit is subject to the GST/HST. If the customer is a GST/HST registrant, the customer can claim an ITC for the GST/HST paid on the forfeited deposit.

Calculate the GST/HST on the forfeited deposit as follows:

• The GST is equal to the forfeited amount multiplied by 5/105
• The HST is equal to the forfeited amount multiplied by:
  • 13/113 where the rate of 13% applies
  • 15/115 where the rate of 15% applies

If the customer who forfeited the deposit is a GST/HST registrant, the customer may be entitled to claim an ITC for the GST/HST included in the forfeited amount when all of the other conditions for claiming an ITC are met because the customer is considered to have paid that tax.

Coupons, gift certificates, and discounts

Reimbursable coupons

Reimbursable coupons are usually called manufacturers’ coupons. They entitle the customer to a reduction of a fixed dollar amount on the purchase price. Vendors can expect to be reimbursed an amount by the manufacturer or another third party for accepting these coupons from customers. The value of the coupons includes the GST/HST, when used to purchase taxable supplies (other than zero-rated supplies). For example, a chain of hotels (franchisor) may reimburse a franchisee that redeems coupons that entitle a guest to a reduction of a fixed dollar amount for a night's stay at one of the chain's hotels.

When you, as a vendor, accept a reimbursable coupon from a customer, you treat the coupon the same as cash. If the purchase is subject to tax, you charge the GST/HST on the full price of the item and then deduct the value of the coupon. We consider you to have collected a portion of the GST/HST equal to the tax fraction of the value of the coupon.

Report the GST/HST charged on your sales when you prepare your GST/HST return. The value of the coupon does not have to be reported separately.

The tax fractions are as follows:

• 5/105 for the GST
• 13/113 for the HST where the rate of 13% applies
• 15/115 for the HST where the rate of 15% applies

The manufacturer who reimburses you can also claim an ITC (other than for zero-rated supplies) for the tax fraction of the coupon value. However, you, as the vendor who accepts the reimbursable coupons from the customer, cannot claim any ITCs for these coupons since you are reimbursed the tax by the manufacturer.

Non-reimbursable coupons

These are coupons that you, as the vendor, issue and accept, and for which no one reimburses you. They entitle the customer to a reduction in the price for a fixed dollar amount or a fixed percentage amount. As the issuer, you have the option to include the GST/HST in the value of the coupons when the coupons are used to purchase taxable property or services (other than zero-rated property or services).

If you choose to include the GST/HST in the value of the coupons, you treat them the same way as reimbursable coupons. This means that you charge and remit the GST/HST on the full price of the property or service and you can claim an ITC calculated on the tax fraction of the coupon value. Your coupon should state that the GST/HST is included in the value.

If you choose not to include the GST/HST in the value of your coupons, deduct the coupon value from the selling price before calculating the GST/HST.

In this case, when you file your GST/HST return, report the GST/HST you charged on the net price, which is the price after you deduct the coupon value. You cannot claim ITCs for coupons you issue that do not include the GST/HST.

Other coupons

Other coupons (whether reimbursable or not) that are not for a fixed dollar amount may do any of the following:

• offer a different percentage off the price of an item (such as 10% off the purchase of 5 or less boxes and 20% off the purchase of 6 or more boxes)
• offer an item for no charge if another item is purchased (such as two-for-one coupons)
• contain more than one monetary discount such as 25¢ off a 750 ml soft drink or 50¢ off a 1.5 litre soft drink

These coupons reduce the selling price of an item before the GST/HST is added. Therefore, deduct the value of the coupons from the selling price before calculating the GST/HST.

Gift certificates

A gift certificate (including gift cards and online gift certificates) is generally a voucher, receipt, or ticket that meets all of the following conditions:

• has a stated monetary value or is for a particular supply of property or a service
• is issued or sold for consideration
• is accepted as payment or partial payment of the consideration for a supply of property or a service
• has only to be presented as a means of payment without any obligation imposed on the holder
• has no intrinsic value

Do not collect the GST/HST on the sale of a gift certificate. When a customer gives you a gift certificate towards a purchase, calculate the GST/HST on the price of the item and deduct the amount of the gift certificate as if it were cash.

For more information about gift certificates, see GST/HST Policy Statement P-202, Gift Certificates.

Discounts

Do not charge the GST/HST on property and services you offer free of charge. Generally, if you offer a discount, the GST/HST applies on the price after the discount. For example, if a room rate is regularly $99 and you offer a weekend special rate of $79, charge the GST/HST on $79 for that special rate.

Third-party transactions

A hotel may enter into an agreement with other businesses, such as restaurants or parking lots, where the other business agrees to provide property or services to the hotel's guests but the amount payable by the guest is included on the bill issued by the hotel. Depending on the terms of the agreement, the hotel may be purchasing the property or services and selling them to their guests or acting as an agent in making a transaction on behalf of the other business.

Whether a hotel is acting as an agent is a question of fact and depends on the terms of the agreement between the parties involved. For more information, see GST/HST Info Sheet GI-012, Agents.

Passenger transportation services

This section gives information on how the GST/HST applies to domestic and international passenger transportation services. Before explaining whether a passenger transportation service is subject to the 5% GST or the HST at the applicable rate, several terms need to be defined.

Terms used in this section

Passenger transportation service

A passenger transportation service is any mode of transportation available to the public, such as transportation by bus, taxi, train, aircraft, boat or motor vehicle as long as there is all of the following:

• a mode of conveyance
• an operator of the conveyance independent of the traveller
• an itinerary

Generally, an itinerary describes all elements of a journey, including origin, termination, stopovers, dates and times of arrivals and departures, and all modes of conveyance throughout the journey.

Ski lifts, horseback rides, hot-air-balloon rides, and hang gliding are not considered passenger transportation services. Vehicle rentals that the traveller operates and controls, such as automobiles, motor homes, motorcycles, bicycles, snowmobiles, all-terrain vehicles, and other recreational vehicles, are also not considered to be passenger transportation services.

Continuous journey

Continuous journey of an individual or a group of individuals means the set of all passenger transportation services provided to the individual or group for which a single ticket or voucher for all of the services is issued. A continuous journey also exists where two or more tickets or vouchers are issued for two or more legs of a single journey of the individual or group on which there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued, and all the tickets or vouchers are issued by the same supplier or by two or more suppliers through one agent acting on behalf of all the suppliers, provided that either:

• all such tickets are supplied at the same time and evidence satisfactory to the Minister is maintained by the supplier or agent that there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued
• the tickets or vouchers are issued at different times and evidence satisfactory to the Minister is submitted by the supplier or agent that there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued.

Origin

Origin means, in respect of a continuous journey, the place where the passenger transportation service that is included in the continuous journey and that is first provided begins.

Stopover

For the purpose of determining if a supply of passenger transportation services may be zero-rated, a stopover, for a continuous journey of an individual or a group of individuals, means any place at which the individual or group embarks or disembarks a conveyance used in the provision of a passenger transportation service included in the continuous journey, for any reason other than transferring to another conveyance or to allow for servicing or refuelling of the conveyance. A stop between two legs of a journey that is 24 hours or less is not considered a stopover and will not affect whether the legs are part of a continuous journey.

However, for the purpose of determining the province where a supply of passenger transportation services is made, a stopover does not include, in the case of a continuous journey of an individual or group of individuals that does not include transportation by air and the origin and termination of which are in Canada, any place outside Canada where, at the time the journey begins, the individual or group is not scheduled to be outside Canada for an uninterrupted period of at least 24 hours during the course of the journey.

Termination for a continuous journey

The termination of a continuous journey means the place where the passenger transportation service that is included in the continuous journey and that is last provided ends.

Taxation area

Taxation area means Canada, the United States (except Hawaii), and the islands of St. Pierre and Miquelon.

Domestic passenger transportation services

Generally, the GST/HST applies to all passenger transportation services provided in Canada. This includes transportation by bus between two Canadian cities.

However, a domestic passenger transportation service may be zero-rated if it is part of a continuous journey that has an international element. For more information, see Sales of domestic passenger transportation services to travel providers and International passenger transportation services.

Which tax rate applies – GST or HST?

The tax that applies depends on the province in which you supply the domestic passenger transportation service.

If the passenger transportation service is supplied:

• in a participating province, the supply is subject to the HST
• in a non-participating province, the supply is subject to the GST

Place of supply of passenger transportation service that is part of a continuous journey

Generally, a passenger transportation service that is part of a continuous journey is made in the province in which the continuous journey originates if the termination and all stopovers are in Canada. If the termination or a stopover is outside Canada, the passenger transportation service is made in a non-participating province.

Passenger transportation service that is not part of a continuous journey

A passenger transportation service that is not part of a continuous journey is made in the province in which the service originates. However, if the passenger transportation service ends outside Canada, the service is made in a non-participating province.

Sales of domestic passenger transportation services to travel providers

A domestic passenger transportation service supplied to a travel provider, such as a non-resident tour operator, is zero-rated if both of the following conditions are met:

• the travel provider resells the domestic transportation service to an individual as part of a continuous journey under which all transportation services are zero-rated
• the individual uses the transportation as part of a continuous journey under which all transportation services are zero-rated

The supplier must get proof from the travel provider that the transportation service was resold as part of a continuous journey under which all transportation services were zero-rated. Acceptable proof includes a passenger list, a tour itinerary, and a certificate of zero-rated entitlement.

The passenger list must contain the names and addresses of the travellers. However, the supplier can agree that the travel provider can keep the passenger list and provide it on request.

The following certificate of zero-rated entitlement is an example of the information required.

To:_________________________________________________________________
(name and address of registered supplier of transportation service)
We hereby certify that the following passenger transportation services that we have purchased from you, namely:
___________________________________________________________________
(detailed description of the required services the supplier will provide)
will be included in one or more continuous journeys or tour packages, and will qualify for zero-rated status under the Excise Tax Act. We will pay the GST/HST at the applicable rate in respect of any transportation service found to be taxable at the applicable rate during an audit of
___________________________________________________________________
(name of registered supplier)
Dated at________________________this___________day of__________20___
___________________________________________________________________
Signature of authorized officer of recipient
___________________________________________________________________
Name of recipient or authorized representative
___________________________________________________________________
Title of authorized representative

The supplier must determine whether all criteria to zero-rate the transportation services in the continuous journey are met, or whether the GST/HST at the applicable rate has to be charged. If the supplier determines that a domestic passenger transportation service does not meet the zero-rating criteria, the travel provider has to pay the applicable GST/HST to the supplier.

Sometimes the sale of the domestic passenger transportation service happens before the travel provider assembles and sells the continuous journey or tour package containing the transportation services to individual travellers. In this case, the supplier can accept an interim certificate or other declaration of intent from the travel provider. The travel provider must follow up on the interim document with proof that all criteria for zero-rated status have been met.

If later it is determined that the domestic passenger transportation service does not meet the zero-rating criteria, as previously thought, the supplier has to charge and collect the GST/HST on that supply. If the supplier has already filed its return for the reporting period in which it made that supply, it has to ask that the previously filed return be amended to include the GST/HST on that supply. Interest will apply on any amount due as a result of the amendment. To ask for an amendment to a return, write to your tax services office with the details.

If you have charged tax on a domestic passenger transportation service that meets the zero-rating criteria, you can refund the amount charged as tax to the client if all the refund criteria are met.

International passenger transportation services

In many cases, passenger transportation services can be zero-rated if they are part of a continuous journey that meets certain conditions. These conditions are different depending on whether air travel is included in the continuous journey.

Continuous journey that includes air travel

A domestic passenger transportation service is zero-rated if it is provided to an individual (or group of individuals) as part of a continuous journey that includes air travel and any one of the following applies:

• the origin of the continuous journey is outside Canada but inside the taxation area. For example, if the origin of a continuous journey is in the continental United States, all passenger transportation services in that journey are zero-rated because the origin is outside Canada but inside the taxation area
• the origin or termination of the continuous journey or any stopover during the continuous journey is outside the taxation area
• the origin, termination, and all stopovers during the continuous journey are outside Canada
• all places where the individual or group embarks or disembarks an aircraft are outside Canada and the origin or termination of the continuous journey, or any stopover during that journey, is outside Canada.

For a continuous journey that includes air travel, as long as there is an overseas origin, termination, or stopover, all domestic passenger transportation services included in the continuous journey are zero-rated.

Continuous journey that does not include air travel

Generally, the GST/HST applies to trans–border day trips (without air travel) when both the origin and termination are in Canada and the traveller is not scheduled to be outside Canada for more than 24 hours.

A trans-border day trip originating in a non-participating province is generally subject to the GST. Such a trip originating in a participating province is generally subject to the HST. Examples of taxable trans-border day trips taxable at the applicable rate include:

• a bus tour beginning and ending in Canada, which starts in New Brunswick and has a stop in the state of Maine (subject to the HST)
• a one-day, round-trip bus excursion from Alberta to the state of Montana (subject to the GST)
• a one-day fall bus round-trip excursion from Montréal, Quebec, to the state of New Hampshire (subject to the GST)

However, if a passenger transportation service (other than one that is included in most trans-border day trips) is provided to an individual (or group of individuals) as part of a continuous journey that does not include air travel, that domestic passenger transportation service will be zero-rated if one of the following applies:

• the origin or termination of the continuous journey is outside Canada
• there is a stopover outside Canada

This includes transportation by bus or train between Canada and the United States. However, it does not apply when the transportation is included in a trans–border day trip, mentioned earlier in this section.

Other services provided with a transportation service

The following services, if provided by the same supplier of the passenger transportation service, will have the same tax status as that transportation service:

• a service of issuing, delivering, amending, replacing, or cancelling a ticket, voucher, or reservation for a taxable transportation service supplied in Canada
• a service of supervising an unaccompanied child
• a service of transporting an individual's baggage

This means that if you provide one of these other services listed above with a transportation service that you also provide, the GST/HST will apply to the other service as follows:

• if the transportation service is subject to the GST, that other service is subject to the GST
• if the transportation service is subject to the HST, that other service is subject to the HST
• if the transportation service is zero-rated, that other service is also zero-rated

If the passenger transportation services in a continuous journey are zero-rated, a service of supervising an unaccompanied child will also be zero-rated if it is provided during one or more legs of the child's continuous journey.

If the service mentioned above is not supplied with a passenger transportation service, it has to be separately considered to determine which tax rate applies.

Sales of taxable property and services on board conveyances in Canada

If, while providing a passenger transportation service in Canada, you sell taxable property and services on board a conveyance during a leg of a journey, the supply is made in the province in which that leg of the journey begins. Therefore, if that leg begins in a non-participating province, the supply is subject to the GST. If that leg begins in a participating province, the supply is subject to the HST at the rate in effect in that province.

Sales of goods and services on board conveyances in international travel

For GST/HST purposes, an international flight means any flight (other than a flight originating and terminating in Canada) of an aircraft that is operated by a person in the course of a business of supplying passenger transportation
services. Similarly, an international voyage means any voyage (other than a voyage originating and terminating
in Canada) of a vessel that is operated by a person in the course of a business of supplying passenger transportation
services.

If you supply goods or services to the individual on the aircraft or vessel on an international flight or voyage, the supply is considered to be made outside Canada and is not subject to the GST/HST if:

• in the case of goods, physical possession of the goods is transferred to the individual on board the aircraft or vessel
• in the case of services, the services are wholly performed on the aircraft or vessel

Travel agencies

Travel agencies usually act as agents for selling property and services on behalf of other businesses, such as airlines and hotels, and receive a commission for their services.

Travel agencies may also be suppliers of property and services. For example, if you are a travel agency that buys a block of airline flights and hotel rooms for resale, you are not acting as an agent. You are the supplier of those flights and rooms. If the flights and rooms are taxable (other than zero-rated), you have to charge and report the GST/HST on those sales.

What is a travel provider?

For the purposes of this page, travel providers include travel agents, hotels, air carriers, tour operators, and cruise operators. A person that buys travel services or tour packages in the course of their business to resell is considered to be a travel provider.

When do I charge tax on commissions?

If you are acting as an agent, the GST/HST applies to your commissions, unless the services you provide are zero-rated (or you are making an exempt supply of arranging for the insurer’s issuance of an insurance policy). However, if you are an independent travel agent registered for the GST/HST and you provide services to a travel agency, your services to the travel agency are generally subject to the GST/HST even if, on behalf of the travel agency, you make zero-rated supplies.

When are my services zero-rated?

Your service is zero-rated when you act as an agent for a person providing passenger transportation services in any of the following situations:

• selling a zero-rated passenger transportation service for them
• selling a service of transporting an individual's baggage for them in connection with a zero-rated passenger transportation service
• selling a service of supervising an unaccompanied child for them in connection with a zero-rated passenger transportation service
• issuing, delivering, amending, replacing, or cancelling a ticket or reservation for a zero-rated passenger transportation service on their behalf

Also, if you are a travel agency acting as an agent for a non-resident person, your service is zero-rated in either of the following situations:

• the service relates to a sale made outside Canada by or to the non-resident
• the service relates to a zero-rated sale of exported property or services to the non-resident

Which rate of tax applies – GST or HST?

Generally, if the travel agency's service is performed in whole or in part in Canada, the service is considered to have been supplied in Canada and is subject to the GST/HST at the applicable rate.

For a travel agency's taxable (other than zero-rated) services supplied in Canada, the tax that applies will depend on whether the agency's services are supplied in a participating or a non-participating province.

If the service is supplied:

• in a participating province, the supply is subject to the HST
• in a non-participating province, the supply is subject to the GST

Place-of-supply rules apply to determine whether a supply that is made in Canada is made in a participating province or a non-participating province.

Place-of-supply rules for travel agencies' services

Travel agencies usually act as agents for selling property and services on behalf of other businesses, such as airlines and hotels, and receive a commission for their services.

The general place of supply rules for services are subject to specific place of supply rules for certain services such as for
supplies of services in relation to certain types of property, as described later in this section. A supply of a service is generally made in a province where the supplier obtains a single home or business address of the recipient in the ordinary course of its business and that address is situated in that province. Where the supplier does not obtain any home or business address of the recipient in the ordinary course of its business, but obtains another single address in Canada of the recipient, that address will be used in determining the place of supply.

Where, in the ordinary course of its business, the supplier does not obtain an address in Canada of the recipient, the supply of services is made in a participating province if the services that are performed in Canada are performed primarily (more than 50%) in the participating provinces. The supply is made in the participating province in which the greatest proportion of the service is performed.

In the case where the greatest proportions of the service are performed equally in two or more participating provinces and it therefore cannot be determined in which participating province the greatest proportion of the service is performed, the HST will apply at the rate that is highest among those participating provinces.

If the services are performed primarily in the non-participating provinces or are performed equally in participating and non-participating provinces, the supply of services is made in a non-participating province and will be subject to the GST at 5%.

A supply of a service in relation to real property that is situated in Canada and is situated primarily in the participating provinces is made in the participating province in which the greatest proportion of the real property that is situated in the participating provinces is situated.

If this rule does not result in the determination of a single participating province because the greatest proportions of the real property are equally situated in two or more participating provinces, the supply of the service is made in the participating province among those provinces that has the highest rate for the provincial part of the HST. If two or more of the participating provinces in this case have the same rate for the provincial part of the HST, HST will be required to be charged by the supplier using that particular rate.

A supply of a service in relation to real property that is situated in Canada and otherwise than primarily (50% or less) in participating provinces is made in a non-participating province.

Collecting and reporting the GST/HST

If a travel agency is the supplier of travel products, the travel agency has to charge, collect, and report the GST/HST on the travel products (unless they are zero-rated).

When a travel agency is not the supplier of the travel products, but instead acts as an agent for another person who is the supplier, the travel agency only has to charge, collect, and report the GST/HST on the commission it charges (unless the supplies are zero-rated). The supplier of the travel products is responsible for charging, collecting, and reporting the GST/HST on the supply of the travel products (unless they are zero-rated). Although the supplier of the products is responsible for charging and accounting for the GST/HST, the travel agency may invoice and collect the tax from the purchaser and pass it on to the supplier.

Tour packages

What is a tour package?

As in any transaction, it is important to properly characterize what is being supplied to determine how the GST/HST applies to that transaction. For example, when a registrant combines two or more services or property and services together, the registrant must determine whether it is making one supply or multiple supplies and must characterize that supply or those supplies accordingly.

A tour package is a combination of two or more services or of property and services that includes transportation services, accommodation, a right to use a campground or trailer park, or guide or interpreter services when the property and services are supplied together for an all-inclusive price. A tour package is a single supply for GST/HST purposes. Generally, a tour package is a combination of various components to create something new.

However, not all combinations of two or more services, or of property and services, are considered to be tour packages. A combination that includes elements such as transportation services or accommodation may not be a tour package for GST/HST purposes. The nature and purpose of the package being sold has to be considered to determine whether it is a tour package or something else. For example, if the overall purpose of a package is to provide a specialized service (such as wellness packages, educational or counselling packages, children's overnight camps, sports tournaments, or concert tours), it is not considered to be a tour package for GST/HST purposes.

As illustrated in the following examples, the meaning of tour package could result in a combination of two or more services, or of property and services, being considered a tour package for GST/HST purposes even though the package may not fit the common perception of a tour package. However, the reverse is also possible. That is, something that may appear to be a tour package may not be a tour package for GST/HST purposes.

What qualifies as short term or camping accommodation?

Short term accommodation means the rental of a residential unit or residential complex in Canada as a place of residence or lodging for an individual who will occupy it continuously for a period of less than one month and for which the GST/HST is payable. It includes any type of overnight shelter (except those noted on the next page) supplied as part of a tour package that also includes food and the services of a guide.

For example, overnight or week long accommodation in any of the following would usually be considered short term accommodation:

• hotels and motels
• resorts and lodges
• bed and breakfast establishments

Short term accommodation does not include any of the following:

• shelter on a train, trailer, boat, or other structure that is, or could be self propelled (for example, cruise ship cabins, train berths, houseboats, travel trailers, and all recreational vehicles)
• a residential unit supplied under a timeshare arrangement
• accommodation outside Canada
• accommodation that costs $20 or less each day

Camping accommodation means a campsite at a campground or recreational trailer park in Canada that is rented continuously as a place of lodging for periods of less than one month to the same individual. It includes water, electricity, and waste disposal services, if provided with the campsite and accessed by an outlet or hook up at the campsite.

What qualifies as a service?

A service means anything other than property, money, and anything that is supplied to an employer by an employee in the course of employment. Some examples include:

• guide or interpreter services
• transportation services
• sightseeing excursions
• ski lessons

The following do not qualify as services because they are property:

• accommodation (including a right to use a campground or trailer park)
• meals
• a right to enter or attend an event, such as tickets to a show or a hockey game
• car rentals
• ski rentals
• ski lift tickets
• golf green fees
• park passes

What is an all inclusive price?

All inclusive price generally means a single price for all property and services sold together in a package. However, in the tourism industry, sometimes prices for certain property or services that are included in a tour package are listed on an invoice for information purposes. The CRA accepts that such packages are sold for an all inclusive price.

Examples of tour packages

Examples of packages that are not tour packages for GST/HST purposes

An amenity is an item that plays a minor role or subordinate role, or if no part of the consideration can reasonably be attributed to it. Some examples are:

• housekeeping at a hotel
• baggage handling
• parking in a parking lot
• access to a hotel facility
• complimentary transfers or shuttles to and from the accommodation and an airport, or shuttles to and from a nearby casino

How does the GST/HST apply to tour packages?

To determine the amount of the GST/HST you have to charge when you sell a tour package, you begin by identifying the tax rate(s) that would have applied to each element of that tour package if you had sold each element separately and not as part of a tour package. For each element, you have to determine in which province the supply is made.

Domestic tour packages

Same tax rate

When you sell an entirely Canadian tour and all of the parts of the tour package would have been taxable at the same rate if these elements had been supplied separately and not as part of a tour package, you charge that rate on the total selling price of the tour package. You can generally claim an ITC for the GST/HST paid or payable on property and services you bought and included in the tour package.

Combined tax rates

When you sell an entirely Canadian tour package and elements of the package would have been taxable at different rates if they had been supplied separately and not as part of a tour package, you have to consider each element separately to determine the total tax payable on the tour package. To do this, for each element, you have to consider the place-of-supply rules to determine in which province the supply is made.

Tour packages combining supplies that are taxable, exempt, and made outside of Canada

When you sell a tour package that includes elements that are taxable at different rates, exempt, or are supplied outside of Canada, you have to determine the tax status of each element separately (as if you were selling each element separately and not as part of a tour package). The cost of the taxable elements of the tour package then has to be prorated as a percentage of the total cost of the tour package so that you can determine the total tax payable on the selling price of the tour package.

The taxable portions of a tour package are the portions of the tour package that would be subject to the GST/HST, other than zero-rated supplies (taxable elements) if you had supplied the element separately. To calculate the taxable portions, determine in which province each element is supplied. Then, add up the elements that are subject to the same tax rate and divide each result by the total cost of property and services included in the package.

The non-taxable portion of a tour package includes elements that, if supplied separately from the tour package, would be zero-rated, supplied outside Canada, or exempt.

If some elements in the taxable portions of a tour package would have been taxed at 5% if supplied separately and not as part of the package, and some would have been taxed at different HST rates, you have to determine the percentage of the taxable portions subject to each rate of tax.

Usually, a tour operator continues to use the same percentages for each tax rate to determine the amount of tax to charge (even if a discount is offered) whenever it sells the tour package.

If the tour operator sells the tour package to another registrant tour operator, the other operator has to charge the GST/HST using the same percentage for each tax rate when it resells the tour package. The other tour operator applies these percentages to its selling price for the tour package to determine how much tax it charges. If the tour operator changes the tour package by adding or deleting elements, it is likely a new tour package and the tour operator has to recalculate the percentages. For more information, refer to GST/HST Memorandum 27.1, Calculating the GST/HST on Tour Packages.

Change in tour package

If there is a significant change in the cost of acquiring the elements included in the package, you may have to recalculate the taxable portions and the non-taxable portions before calculating the GST/HST to be charged on the tour package. For more information, refer to GST/HST Memorandum 27.1, Calculating the GST/HST on Tour Packages.

You have to keep records to show how you calculated the taxable portions of tour packages and the percentages. It is your responsibility to make sure any travel agency acting on your behalf collects the correct amount of GST/HST from your customer.

Foreign tour packages

Tour operators do not charge the GST/HST on exclusively foreign tour packages. For example, a tour operator does not charge a traveller the GST/HST on a tour package that includes hotel accommodation and bus excursions in Scotland. The accommodation and excursions in Scotland are not subject to tax because they are supplied outside Canada.

Also, if airfare from Canada to Scotland is included with the accommodation and excursion in Scotland, the airfare is zero-rated and the tour operators do not charge tax.

Conventions

A convention is a formal meeting or assembly that is not open to the general public.

A convention does not include a meeting or assembly if the main purpose of which is any of the following:

• to provide any type of amusement, entertainment, or recreation
• to conduct contests or games of chance
• to conduct the business of the convenor or attendees either in the course of a trade show that is open to the general public or other than in the course of a trade show

The following are definitions of terms we use for conventions:

Convention facility means any real property that is rented by the sponsor or organizer of a convention for use exclusively as the site for the convention.

Exclusively, for the purposes of related convention supplies, means property or services used all or substantially all (90% or more) in connection with a convention.

Exhibitor means a person who rents exhibition space exclusively for use as a site for the promotion at a convention of the property or services provided by the exhibitor or its business.

Organizer of a convention means a person who acquires the convention facility or related convention supplies and organizes the event for the sponsor.

Sponsor of a convention means the person who convenes the convention and supplies admissions to it.

What is a related convention supply?

Related convention supplies generally means property or services that were acquired, imported, or bought into a participating province by a person exclusively for consumption, use, or supply by the person in connection with a convention. They do not include any property or services that are provided for a separate charge, except if they are acquired exclusively to be consumed or used by an exhibitor in promoting its business, services, or property at the convention.

The following property and services are examples of possible related convention supplies.

Accommodation

• hotel accommodation for use by the convention sponsor, organizer, or exhibitor, or supplied to attendees as part of the admission.

Audio-visual

• audio, audio-visual, and video services, including equipment and labour associated with the technical services.

Business equipment

• computers, photocopiers, desks, and chairs.

Convention materials

• banners, flags, signs, papers, shields, floral arrangements, stand decorations, backdrops and other decorations, and office supplies.

Convention show services

• equipment, furnishings, and labour to install such items as carpeting, tables, chairs, exhibit booths, decorative plants, draping, banners, displays, and signs.

Destination management services

• local planning, management, and co-ordination services in organizing elements of the convention for the incoming organization.

Food, beverages, and catering services (rebate limited to 50% of the GST/HST paid)

• food, beverages, and catering services related to the convention, including any gratuities charged.

Memorabilia

• lapel buttons, billfolds, key chains, pens, pencils, corsages, T-shirts, scarves, mugs, jewellery, badges, and similar promotional items.

Moving and storage services

• labour and equipment to deliver exhibit materials to the assigned space, including the storage of crates during the convention.

On-site services

• personnel for on-site work such as the staffing of the registration desk, photographic services, and security services.

Printed matter

• identification badges
• information bulletins, on-site newsletters, booklets, programs, and memoranda relating to a convention or to products displayed at a convention.

Professional services

• customs brokerage, legal, accounting, and freight forwarders' services.

Simultaneous interpretation equipment

• simultaneous interpretation and audio-related equipment and labour.

Speakers and educational seminars

• facilitators and course materials.

Telecommunications

• telephone, fax, video, audio, or computer link-ups.

Translators and interpreters

• individuals who translate and interpret the languages being used.

Transportation services

• chartered group transportation services used solely to transport attendees of the convention between any of the convention facilities, places of lodging for the attendees, or the transportation terminals (for example, airport shuttle services).

The following property and services are not related convention supplies:

• transportation services (other than the chartered transportation services described above)
• entertainment such as city tours
• property and services provided to the attendees of the convention for a separate charge from the admission fee, such as souvenirs, books, and videos sold during the convention

Domestic conventions

A domestic convention is a convention held in Canada that is not a foreign convention.

Is GST/HST registration required?

Sponsors

If you are a resident sponsor of a domestic convention, you may be able to, or you may have to, register for the GST/HST.

If you are a non-resident sponsor of a domestic convention and are not already registered for the GST/HST, you have to register for the GST/HST before you make supplies of admissions to the convention.

For more information, see Should you register?

Organizers

If you are a resident or non-resident organizer of a domestic convention, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register?

Exhibitors

If you are an exhibitor at a domestic convention and you are resident in Canada, you may be able to, or you may have to, register for the GST/HST. For more information, see Should you register?

If you are a non-registered, non-resident exhibitor who is in Canada only to promote your products or services at a convention, you do not have to register for and charge the GST/HST on any orders taken from attendees during the convention. However, if you bring products to the convention to sell to attendees, you may be considered to be carrying on business in Canada and may have to register. For more information, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents.

Charging tax for domestic conventions

This section gives information on how the GST/HST applies to the following supplies for domestic conventions:

• convention facilities
• admissions
• related convention supplies
• exhibition space

Convention facilities

If you are the operator of a convention facility in Canada and a GST/HST registrant, you have to charge the GST/HST when you lease out space. This applies whether you are leasing to a resident or a non-resident of Canada.

Admissions

If you are a registrant, you have to charge the GST/HST on the admissions you sell to the attendees of a domestic convention.

Related convention supplies

If you are a registrant, you have to charge the GST/HST on related convention supplies.

For more information, see What is a related convention supply?

Exhibition space

If you are a registrant, you have to charge the GST/HST when you lease exhibition space to exhibitors at the convention.

Foreign conventions

A foreign convention is a convention held in Canada where both of the following applies:

• at the time the sponsor of the convention determines the amount to be charged for the admissions, it is reasonably expected that at least 75% of the admissions will be provided to non-residents of Canada (to determine the percentage of non-resident attendees, see below)
• the sponsor of the convention is an organization whose head office is situated outside Canada or, if the organization has no head office, the member or the majority of members having management and control of the organization are non-residents

To determine the percentage of admissions reasonably expected to be provided to non-resident attendees, you could use the percentage of non-resident attendees under any of the following methods:

• who attended previous conventions
• who are usually invited to attend the convention
• who are listed as members of the organization

You can also use any other reasonable method.

If a convention is a foreign convention because it is reasonably expected that at least 75% of the total of the admissions will be supplied to non-residents, and it is later discovered that less than 75% of the admissions were supplied to non-residents, the convention would still be considered a foreign convention.

Is GST/HST registration required?

Sponsors

If you are a sponsor of a foreign convention, you cannot register for the GST/HST if your only commercial activity in Canada is making sales of admissions or related convention supplies or leasing exhibition space at a foreign convention.

However, if you sell books, posters, education material, or other items at the foreign convention, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register? For information on carrying on business in Canada and GST/HST registration for non-residents, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents.

Are you already registered for the GST/HST?

If you are the sponsor of a foreign convention and you are already registered for the GST/HST, your activities related to the foreign convention are not part of your commercial activities.

This means that you do not charge the GST/HST on supplies related to the foreign convention (such as supplies of admissions, related convention supplies, and exhibition space). You also cannot claim ITC for the GST/HST you pay on purchases related to the foreign convention. However, you may be able to apply for a rebate. For more information, see Rebate for foreign conventions.

Organizers

If you are an organizer of a foreign convention, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register?

Exhibitors

If you are an exhibitor at a foreign convention and you are resident in Canada, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register?

If you are a non-registered, non-resident exhibitor who is in Canada only to promote your products or services at a foreign convention, you do not have to register for and charge the GST/HST on any orders taken from attendees during the convention. However, if you bring products to the convention to sell to attendees, you may be considered to be carrying on business in Canada and you may have to register. For more information, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non‑Residents.

Charging tax for foreign conventions

This section provides information on how the GST/HST applies to the following supplies for foreign conventions:

• convention facilities
• admissions
• related convention supplies
• exhibition space

Convention facilities

If you are a GST/HST registrant, you have to charge the GST/HST when you lease out space in Canada. This applies whether you are leasing to a resident or a non-resident of Canada.

Admissions

If you are a sponsor of a foreign convention, do not charge the GST/HST on admissions you sell to the attendees of a foreign convention, even if you are registered for the GST/HST.

Related convention supplies

If you are a registrant, you have to charge the GST/HST on related convention supplies.

For more information, see What is a related convention supply?

Exhibition space

If you are a registrant, you have to charge the GST/HST when you lease exhibition space to exhibitors at the convention.

Rebate for foreign conventions

Who can claim a rebate?

A rebate may be available for either:

• sponsors of foreign conventions
• organizers of foreign conventions who are not registered for the GST/HST

What expenses are eligible for the rebate?

A sponsor and a non-registered organizer of a foreign convention can claim a rebate for each of the following:

• the tax paid for the convention facilities and related convention supplies that are not food, beverages, or items purchased under a contract for catering
• 50% of the tax paid for food, beverages, or items purchased under a contract for catering

For more information, see What is a related convention supply?

Can I pay or credit a rebate amount?

A sponsor or non-registered organizer of a foreign convention can apply for the rebate by sending the CRA a filled out Form GST386, Rebate Application for Conventions, or, if you are the supplier of the convention facility or related convention supplies, you may be able to pay or credit a rebate amount to the sponsor or organizer.

Only the following suppliers can pay or credit a rebate amount:

• a registrant organizer can pay or credit a rebate amount to a sponsor
• a registrant operator of convention facilities that is not the organizer of the convention can pay or credit a rebate amount to a sponsor or non-registered organizer
• a registrant supplier of accommodation (for example, a hotel) that is not the organizer of the convention can pay or credit a rebate amount to a sponsor or non-registered organizer if the accommodation is acquired exclusively for supply in connection with a foreign convention

In any other case, the sponsor or organizer of the convention has to fill out Form GST386 and send it to the CRA to apply for its rebate.

Documentary evidence

When you pay or credit a rebate amount, the sponsor or non-registered organizer must provide you with documentation showing it is entitled to the rebate. This could include a convention agenda, itinerary or event program, complete hotel folios, copies of invoices, and receipts or other documents that confirm that the event was a foreign convention.

Joint liability

If we determine that the sponsor or non-registered organizer was not entitled to a rebate, or that the amount paid or credited was more than the amount of the rebate the non-resident was entitled to, and you knew or ought to have known this, you and the non-resident are jointly liable to pay us any amount owing. Otherwise, only the non-resident is liable to pay us any amount owing.

How to pay or credit a rebate amount

If you choose to pay or credit a rebate amount, you still have to charge the full amount of the tax due on the convention facility or related convention supplies. You have to show the full amount of the tax payable by the sponsor or non-registered organizer on the invoice and also show the rebate amount you paid or credited.

Include the full amount of the GST/HST collected or collectible from the sponsor or organizer in the line 105 calculation of your electronically filed GST/HST return (or on line 103 if you file a paper return). Then include the amount that you paid or credited in your line 108 calculation (or on line 107 if you file a paper return).

You can include the amount on any GST/HST return that is filed within one year of whichever of the following dates is later:

• the last day the tax became payable
• the day the rebate was paid or credited

You also have to file Form GST106, Information on Claims Paid or Credited for Foreign Conventions, by the due date of the electronically filed GST/HST return for the period in which you claim the deduction in your line 108 calculation (or on line 107 if you file a paper return). For more information, see Form GST106.

For more information, see GST/HST Info Sheet GI-031, Foreign Convention and Tour Incentive Program – Registrant Organizers and Convention Facility Operators: Paying and Crediting the Rebate Amount for Foreign Conventions.

Rebate for non-resident exhibitors

Non-registered, non-resident exhibitors who rented or leased exhibition space exclusively to promote their business or products can claim a rebate for the GST/HST paid on the following supplies, if rented or purchased from a GST/HST registrant that is not the sponsor:

• related convention supplies, except for food, beverages, or items purchased under a contract for catering (see What is a related convention supply?)
• exhibition space

Suppliers cannot pay or credit the rebate amount to non-resident exhibitors. Non-resident exhibitors have to send the CRA a completed Form GST386, Rebate Application for Conventions, within one year after the last day of the convention to claim their rebate.

Non-resident exhibitors do not pay the GST/HST on exhibition space or related convention supplies rented or purchased from the sponsor of the convention (whether foreign or domestic). A non-resident exhibitor that has paid tax in error on these items can ask a sponsor for a refund or credit of the amount. If the sponsor does not provide a refund or credit, the exhibitor can claim a rebate for tax paid in error. For more information, see Guide RC4033, General Application for GST/HST Rebates.