GST/HST Ruling

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 77006

September 6, 2011

Dear [Client]:

Subject:

GST/HST RULING
Application of GST/HST to services performed related to credit card accounts

Thank you for your letters of [mm/dd/yyyy] and [mm/dd/yyyy] concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to services performed related to credit card accounts. We apologize for the delay in responding to your enquiry.

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA), unless otherwise specified.

Statement of Facts

The following is our understanding of the facts:

1. [...] (FinanceCo), and [...] (Service Provider), [...] have entered into a [...] Agreement on [mm/dd/yyyy] (Agreement). The parties to this Agreement are not members of the same closely related group.

2. Based on [...] the Agreement the Service Provider agrees to perform services for FinanceCo and acknowledges that the services are regulated by and subject to certain [...] requirements which govern the processing and maintenance of certain information and data in respect of those services.

3. The services are outlined in the Agreement as two main groups. The first group of services are the [...] [A] Services (section [...] of the Agreement). These services were necessary to convert FinanceCo's systems to the Service Provider's platforms by adapting and installing software applications and processing systems on FinanceCo's system to be later used by the Service Provider.

4. The second group of services are referred to in the Agreement as the [...] [B] Services (see section [...] of the Agreement). Those services are essentially ongoing processing services performed by the Service Provider with respect to FinanceCo's credit card portfolios. These services are further described in Schedules [...] to the Agreement.

5. Schedule [...] [X] of the Agreement describes the [B] Services performed by the Service Provider for FinanceCo. [B] Services include [...] [Standard] [B] Services, Optional [B] Services and Other [B] Services.

6. [Standard] [B] Services include a variety of services that relate to the processing of credit card applications, card production, storage and maintenance of cardholder information, and authorization of purchases. A few examples of such services are provided below:

• [...]: on-line application entry and processing of applications based on FinanceCo's selected criteria.

• [...]: post cardholder financial adjustments such as balance and cash and finance charges.

• [...]: creating cardholder file with account information such as account balance and posting all pending authorizations to cardholder accounts through on-line enquiry.

• [...]: processing and rendering of billing statements.

• [...]: embossing, issuing, reissuing and replacing cards.

• [...]: on-line statements, account cycle and miscellaneous history.

7. Optional [B] Services referred to in Schedule[X] of the Agreement, include a variety of services that relate to different systems used with respect to credit scoring, fraud detection, as well as services related to training. A few examples of these services are provided below:

• [...]: initial set-up to establish a link to [...], ongoing standard tape and transmission, storage of data from various sources (credit bureaus, [...], in-house systems).

• [...]: installation to use the Service Provider's behavioral scoring systems including, support and assistance, start-up and training, scorecard, software documentation, design and implementation.

• [...]: authorization system using scorecards.

• Total Voice Response System: site installation, voice recording, hook-up and hardware, user training, application development, storage of data, design analysis, programming, handling/processing of calls.

• Training and Documentation Services: manuals including updates.

Other [B] Services are referred to in Schedule [X] of the Agreement and include:

• Envelopes: purchase of standard envelopes and handling charge.

• Telecommunications: handling charge for line and equipment.

• Hardware: lease of compatible hardware.

8. Section [...] of the Agreement provides in part that fees will be paid to the Service Provider and such fees are set out in Schedule [...] [XX] of the Agreement.

9. Section [...] of the Agreement provides for additional expenses and other payments to be paid by FinanceCo to the Service provider. These are also further described in Schedule [XX] of the Agreement.

10. Subsection [...] of the Agreement provides that nothing in the Agreement shall be construed to create a partnership or joint venture between the parties. In addition, nothing in the Agreement or the contemplated relationship between the parties will render the Service Provider an agent of FinanceCo for any purpose whatsoever.

11. Fees in respect to [Standard] [B] Services and Other [B] Services are described in Schedule [XX] of the Agreement. Each of the elements of the service is separately itemized with its own unit of measure and its own fee attached to it.

12. The Service Provider is a non-resident and is not registered for GST/HST purposes. Since no GST/HST was charged on any of the services performed by the Service Provider under the Agreement (as evidenced in the sample copy of an invoice submitted), FinanceCo has been self-assessing GST under Division IV of the ETA on such services.

Ruling Requested

You would like to know whether GST/HST applies to the ongoing processing services, referred as the [B] Services in Schedule [X] of the Agreement, performed by the Service Provider for FinanceCo.

Ruling Given

Based on the facts set out above, we rule that ongoing processing services, referred as the [B] Services in Schedule [X] of the Agreement performed for FinanceCo by the Service Provider is a single taxable supply of services.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

As the Agreement provides for the provision by the Service Provider of a number of services and property to FinanceCo, it must first be determined whether a single supply or multiple supplies are being provided under the agreement. Whether the Service Provider is making a single supply or multiple supplies is a question of fact.

GST/HST Policy Statement P-077R2, Single and Multiple Supplies, provides additional information on determining whether a single supply or multiple supplies are being provided, including the following principles.

1) Every supply should be regarded as distinct and independent.

2) A supply that is a single supply from an economic point of view should not be artificially split.

3) There is a single supply where one or more elements constitute the supply and any remaining elements serve only to enhance the supply.

Based on the Agreement, since the [A] Services were necessary in order to convert the platform previously used by FinanceCo to the one used by the Service Provider before the Service Provider can provide the ongoing processing services referred to as the [B] Services both services form part of a single supply. Also based on the Agreement, none of the elements of the services mentioned in the Agreement (including: the [A] Services, [B] Services, Optional [B] Services, non-exclusive [B] Services, Other [B] Services) can be sensibly separated in separate supplies as they are inextricably linked. When looking at the transaction and the Agreement, it is clear that FinanceCo wanted to acquire the services of the Service Provider as a comprehensive package. Although there is a separate fee identified for each element of the service in the Agreement and on the invoices this does not result in concluding that there are separate supplies. Based on the Agreement the Service Provider is making a single supply of Services to FinanceCo.

As the Service Provider is making a single supply, the predominant element of the supply must be established. If the predominant element of the single supply is a financial service, then the supply as a whole will be considered a financial service.

All supplies of financial services are exempt under Part VII of Schedule V unless they are specifically zero-rated under Part IX of Schedule VI (which generally requires that the supply be made by a financial institution to a non-resident and that certain other conditions are met). A service will be a financial service where it is included in any of paragraphs (a) to (m) of the definition of financial service in subsection 123(1) and is not otherwise excluded by any of paragraphs (n) to (t) of that same definition.

A financial service is defined in subsection 123(1) and includes, for example, under paragraph (b) that definition the operation or maintenance of an account (e.g. a credit card account) and under paragraph (d), the issue, granting and transfer of ownership or repayment of a financial instrument. A financial instrument is defined in subsection 123(1) and includes a debt security which, in turn, is defined under that provision to include a right to be paid money (e.g. a loan).

A financial service also includes under paragraph (g), the making of any advance, the granting of any credit or the lending of money, and under paragraph (l), a service that is the arranging for a service referred to in any of paragraphs (a) to (i) and not referred to in any of paragraphs (n) to (t).

Based on the Agreement, FinanceCo is making a supply of a financial service pursuant to paragraphs (b), (d) and (g) of the definition of financial service. Although involved in the issuance process of credit cards by FinanceCo, the Service Provider does not issue credit cards. Please note that the embossing, personalization and mailing of a credit card is not considered to be the issuance of a credit card.

Also, based on the Agreement it is FinanceCo that is making a supply of a financial service pursuant to when FinanceCo maintains the credit card account of a cardholder. Although the Service Provider provides services to FinanceCo in respect to storage of account information, cardholder information and other record keeping services those are simply inputs necessary to allow FinanceCo to provide the operation and maintenance of the account to the cardholder.

As the Service Provider is an intermediary it is necessary to see if the supply made by the Service Provider is a service of "arranging for" a financial service pursuant to paragraph (l) of the definition of financial service.

The term "arranging for" is generally intended to include intermediation activities that are normally performed by financial intermediaries described in subparagraph 149(1)(a)(iii), such as agents, brokers and dealers in financial instruments or money.

In determining if an intermediary's service is included in paragraph (l), all the facts surrounding the transaction, including the following factors, must be considered:

• the degree of direct involvement and effort of the person in the provision of a financial service referred to in any of paragraphs (a) to (i);
• the time expended by the intermediary in the provision of a financial service referred to in any of paragraphs (a) to (i);
• the degree of reliance of either or both the supplier and the recipient on the intermediary in the course of providing a financial service referred to in any of paragraphs (a) to (i);
• the intention of the intermediary to effect a supply of a financial service referred to in any of paragraphs (a) to (i); and
• the normal activities of an intermediary in a given industry (including whether the intermediary is engaged in a business of providing financial services).

In general, services in the nature of management, administration, marketing or promotional activities are intended to be taxable as they are not themselves financial services. Based on the Agreement, while some of the activities, such as processing credit applications, assist FinanceCo in providing a financial service of issuing a credit card and operating and maintaining cardholder accounts, when considered as a whole are predominantly administrative in nature including storage of account information, card production services, services related to cardholder data and contact centre services. As a result, the supply is not a financial service as it is not included in paragraphs (a) to (m) of the definition of financial service in subsection 123(1).

Even if the supply was to be included in paragraphs (a) to (m) of the definition of financial service in subsection 123(1) it would be excluded by paragraphs (r.3) to (r.5) and (t) of that same definition. Please also note that even if the services were considered separate supplies each supply would also be excluded from the definition of financial services by paragraphs (r.3) to (r.5) and (t).

Paragraph (r.3) clarifies that a service (other than a prescribed service) of managing credit in respect of a credit or charge card or similar payment card, or in respect of a credit, charge or loan account or an account in respect of any advance, where the service is supplied to a person that is granting, or potentially granting, credit is excluded from the definition of "financial service". A service of managing credit includes:

• checking, evaluating or authorizing credit;
• making decisions on behalf of the person in relation to a grant, or an application for a grant of credit;
• creating or maintaining records for the person in relation to a grant, or an application for a grant, of credit or in relation to the cards or accounts; or
• monitoring another person's payment record or dealing with payments made, or to be made, by the other person.

Paragraph (r.4) excludes from the definition of financial service, a service (other than a prescribed service) that is preparatory to the provision or the potential provision of a service referred to in any of paragraphs (a) to (i) and (l) of the definition of "financial service", or that is provided in conjunction with a service referred to in any of those paragraphs, that is:

• a service of collecting, collating or providing information, or
• a market research, product design, document preparation, document processing, customer assistance, promotional or advertising service or similar service.

Paragraph (r.5) excludes from the definition of financial service, property (other than a financial instrument or prescribed property) when it is delivered or made available to a person in conjunction with the rendering by the person of a service referred to in any of paragraphs (a) to (i) and (l) of that definition.

Currently, no services are prescribed for the purposes of paragraph (r.3) to (r.5).

Please note that, for purposes of Division IV (i.e. self-assessing tax), paragraphs (r.3) to (r.5) are deemed to have come into force on December 17, 1990.

For additional information on the term "arranging for" and new exclusionary paragraphs (r.3) to (r.5) please refer to GST/HST Technical Information Bulletin, B-105, Changes to the Definition of Financial Service which now replaces GST/HST Policy Statement P-239, Meaning of the Term "Arranging for" as Provided in the Definition of "Financial Service".

Paragraph (t) excludes a prescribed service from the definition of financial service. Section 4 of the Regulations prescribes services for the purposes of paragraph (t). Generally, a prescribed service for this purpose will include the collection and processing of information and any administrative service unless the administrative service relates solely to the making of a payment or the taking of a receipt of dividends, interest, principal, claims, benefits or other amounts. The collection and processing of information or any administrative service will not be a prescribed service if it is supplied with respect to an instrument (e.g., an account) by:

(a) a person at risk,
(b) a person that is closely related to a person at risk, where the recipient of the service is not the person at risk or another person closely related to the person at risk, or
(c) an agent, salesperson or broker who arranges for the issuance, renewal or variation, or the transfer of ownership, of the instrument for a person at risk or a person closely related to the person at risk.

The accounts are FinanceCo's accounts. Based on the Agreement, the risks incurred by the Service Provider are operational risks. Also based on the Agreement, the Service Provider is not an agent, salesperson or broker who arranges for the issuance, renewal or variation, or the transfer of ownership, of the instrument (e.g. an account) for a person at risk.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9211.

Yours truly,
Hélène Bustamante
Financial Institutions Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 81072

April 19, 2011

Dear [Client]:

Subject:

GST/HST RULING
GST/HST treatment of trailer park site rental

This is in reply to your letter concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the rental of a site at [...] (the Park) and the pro-rated portion of the municipal taxes that [...] ([the Company]) charges to you with respect to the site rental. We apologize for the delay in responding.

HST applies at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

The following facts are based on the information set out in your letter, our telephone discussion, as well as copies of documents and receipts provided.

Statement of Facts

1. The Park is located at [...] in [...], in the municipality of [...], [...] [Province X]. The Park has a total of [...] sites. For GST/HST purposes, the Park is not a residential trailer park as that term is defined in subsection 123(1).

2. The majority of the sites are for six months seasonal occupancy from May 1st through to Thanksgiving, as the water to these sites is turned off for the winter. The section of the Park that generally allows for longer stays has a winterized water system.

3. Some occupants asked for mail delivery at the Park and the [...] Post office installed post office boxes at the entrance to the Park.

4. Electrical, water and sewer facilities, and phone service are available to all sites.

5. You first began renting a site at the Park, Lot [...] in [yyyy]. Up until August [yyyy], you used the unit for holiday and weekend stays. In August of [yyyy] you began to use the unit at the Park as your permanent and only place of residence.

6. You have provided copies of various documents dated [yyyy] to [yyyy], including Notice of Assessments and Statements of Account from CRA, as well as copies of correspondence from [the Company], showing your address as Box [...], the Park, [...], [Province X].

7. You purchased your unit, a park model home manufactured by [...], in December [yyyy]. The unit measures [...] x [...] feet. You had an addition measuring [...]' x [...]', also manufactured by [...], attached to the unit, providing a total living area of about [...] square feet.

8. The unit is supported on concrete blocks and installed on a full concrete pad built specifically to receive the unit, in a manner that is conducive to long-term residential use. The wheels and tongue, originally used for transporting the unit to the site, have been removed. The unit is permanently and directly connected year-round to service facilities including hydro, natural gas, underground winterized water pipes and septic. The unit cannot be readily disconnected from these services and is equipped with central air. The unit is finished with siding, has a shingled roof with eavestroughing and downspouts, and is fully skirted. It includes a large raised deck that wraps around on three sides. The site is fully landscaped with plants and shrubs planted around the perimeter of the unit. You have provided photos of your unit.

9. From August [yyyy] until October [yyyy], the Park was your only place of residence. You paid rent monthly, and you were temporarily away from the trailer park [...] during the winter, generally during [...].

10. In addition to your site rental, you paid [the Company] an amount as your share of the municipal taxes assessed in respect of your unit. Hydro to your unit was metered and invoiced to you by [the Company] every [...] months.

11. You sold your unit at the Park in October [yyyy]. The unit remains on the site at the Park.

Ruling Requested

You are requesting a ruling as to whether the rental of the site in the Park on which your unit is situated and the amount charged to you by [the Company] for municipal taxes assessed in respect of your unit are subject to the GST/HST.

Ruling Given

Based on the facts set out above, we rule that the total amount charged for the rental of the land, including the additional amount charged to you by [the Company] for your share of the municipal taxes assessed in respect of your unit located on Lot [...] in the Park is consideration for a supply of the land that is exempt of the GST/HST under subparagraph 7(a)(i) of Part I of Schedule V to the ETA.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Subparagraph 7(a)(i) of Part I of Schedule V to the ETA provides that a supply of land (other than a site in a residential trailer park) made by way of lease, licence or similar arrangement that provides for continuous possession or use of the land for at least one month is exempt if the supply is made to an owner, lessee or person in occupation or possession of a residential unit that is or is to be affixed to the land for the purpose of its use and enjoyment as a place of residence for individuals.

Subsection 123(1) defines the term "residential unit" to include a house, semi-detached house, mobile home or "any other similar premises". Whether a particular unit has the same permanent residential characteristics as a house such that it is considered to be a "residential unit", is affixed to the land, and is used as a place of residence for individuals is determined on a case-by-case basis taking into consideration the facts and circumstances of the particular case.

Based on the facts referred to above, the unit is considered to be a residential unit. Modifications have been made to the unit such that the unit has the same permanent residential characteristics as a house, is installed in a permanent manner that is conducive to long-term residential use and is connected in a permanent way to hydro, gas, water and septic facilities. As such, the unit is considered to be a residential unit that is affixed to the land. Except for the [...] periods during which time you temporarily travelled away from the Park for the winter, you resided full-time at the unit situated on the site at the Park. The fact that you were absent from the Park for a period during the winter months does not preclude the unit from being considered your place of residence. In this case, the facts indicate that the unit was your primary and only place of residence in Canada from August [yyyy] until October [yyyy]. Where a residential unit is an individual's primary place of residence, the particular unit meets the requirement that the unit be for use and enjoyment as a place of residence for individuals. As such, all of the requirements of subparagraph 7(a)(i) of Part I of Schedule V to the ETA are met.

Additional Rent - property taxes

Property taxes paid by a property owner to the municipality are generally not subject to GST/HST. The property owner generally includes an amount that represents a recovery of such taxes from the lessee either as part of the basic rent or as an additional rent. Where a separate amount is paid by a lessee on account of property taxes assessed against the property owner, this amount is part of the consideration for the rental of the property, even if the lessee pays the amount directly to the municipality. As such, the amount will take on the same tax status as the rent. In this case, since the rental of the land on which the residential unit is situated is exempt of GST/HST, the additional amounts charged by [the Company] for your share of the municipal taxes assessed in respect of your unit are not subject to GST/HST.

Tax paid in error

Under the ETA, where a person has paid an amount as or on account of tax that was not payable, the person may request a refund or credit of the amount from the supplier. A supplier may refund or credit the tax within two years after the day the amount was charged or collected. Further information on the time limitations and conditions for claiming refunds and credits is available in GST/HST Memoranda Series Chapter 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act available on the CRA Web site.

Where a refund or credit is not issued by the supplier, the person may make an application under subsection 261(1) for a rebate of the tax paid in error by completing and submitting application form GST 189 General Application for Rebate of Goods and Services Tax (GST)/Harmonized Sales Tax (HST). It should be noted that a rebate application made under section 261 cannot include amounts that were paid in error more than two years before the application is filed. [...].

[...]

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-9212. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Carmela Antonelli
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 81229

August 29, 2011

Dear [Client]:

Subject:

GST/HST RULING
GST/HST treatment of trailer park site rental

This is in reply to your letter concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the rental of a site at [...] (the Park) and the pro-rated portion of the municipal taxes that [...] (the Corporation) charges to you with respect to the site rental. We apologize for the delay in responding.

HST applies at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.

The following facts are based on the information provided in your letter and in the recent telephone discussion with [...] on June 1, 2011.

Statement of Facts

1. The Park is located at [...] in [...] [Community 1], in the municipality of [...], [...] [Participating Province X]. It has a total of [...] sites. For GST/HST purposes, the Park is not a residential trailer park as that term is defined in subsection 123(1).

2. The Park is open seasonally for a period of six to nine months. The majority of the sites are for six months seasonal occupancy from May 1st through to Thanksgiving. The water to these sites is turned off for the winter. The section of the Park that generally allows for longer stays has a winterized water system.

3. Electrical, water and sewer or septic facilities, and phone service are available to all sites. In addition, cable TV is available or individuals may put up their own satellite dish. Some occupants asked for mail delivery at the Park and the [...] Post office installed post office boxes at the entrance to the Park.

4. You indicate you first began leasing a site, Lot #[...], in that section of the Park that permits longer term stays in [yyyy] under an annual lease arrangement. At that time, you leased the site under what you referred to as an "11-month stay arrangement". You resided at the Park permanently throughout the year except for the month of February when the Park closed.

5. Since about [yyyy], the Corporation has restricted occupancy of the Park to a maximum of nine months from April to December. You state that you occupy your unit at the Park from April to December as your only and permanent place of residence in Canada. Your mailing address is the post office box at the Park and you have a telephone listing at the Park.

6. You own your unit, a [...] park model, which measures [...]' x [...]'. An add-a-room measuring [...]' x [...]' has been added to the original trailer. The unit is insulated for year-round use and is connected year-round in a permanent manner to service facilities, including hydro, natural gas and an underground, winterized water and septic system. The unit consists of one bedroom, living room, bathroom and kitchen facilities and a winterized addition. The unit is fully insured as your permanent residence.

7. The unit was towed to the site and is installed on a concrete pad. The tongue, originally used for transporting the unit to the site, has been removed and the unit is affixed in a permanent manner to the site. You have provided a photo of the unit. The unit has skirting around the entire structure and has a [...]' x [...]' deck. The site is fully landscaped and has a [...]' x [...]' concrete driveway. The unit has been affixed to the site since you purchased the unit. It is your intent that the unit remain affixed to site and continue to be your place of residence for the foreseeable future.

8. You indicate that you pay annual rent for the site as well as an additional amount in respect of your share of the municipal taxes assessed in respect of your unit.

Ruling Requested

You are requesting a ruling as to whether the rental of the site on which your unit is situated and the amount charged to you by the Corporation for municipal taxes assessed in respect of your unit are subject to the GST/HST.

Ruling Given

Based on the facts set out above, we rule that the total amount charged for the rental of the land, including the additional amount charged to you by the Corporation for your share of the municipal taxes assessed in respect of your unit located on Lot #[...] in the Park, is consideration for a supply of the land that is exempt of the GST/HST under subparagraph 7(a)(i) of Part I of Schedule V to the ETA.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Subparagraph 7(a)(i) of Part I of Schedule V to the ETA provides that a supply of land (other than a site in a residential trailer park) made by way of lease, licence or similar arrangement that provides for continuous possession or use of the land for at least one month is exempt if the supply is made to an owner, lessee or person in occupation or possession of a residential unit that is or is to be affixed to the land for the purpose of its use and enjoyment as a place of residence for individuals.

Subsection 123(1) defines the term "residential unit" to include a house, semi-detached house, mobile home or "any other similar premises". Whether a particular unit has the same permanent residential characteristics as a house such that it is considered to be a "residential unit", is affixed to the land, and is used as a place of residence for individuals is determined on a case-by-case basis taking into consideration the facts and circumstances of the particular case.

Based on the facts referred to above, the unit is considered to be a residential unit. Modifications have been made to the unit such that the unit has the same permanent residential characteristics as a house, is installed in a permanent manner that is conducive to long-term residential use and is connected in a permanent way to hydro, natural gas, water and septic facilities. As such, the unit is considered to be a residential unit that is affixed to the land.

Except for the winter months when the Park is closed, you reside full-time in the unit at the Park. The fact that you are absent from the Park during the winter months does not preclude the unit from being considered your place of residence. In this case, the facts indicate that the unit has been your primary place of residence in Canada since approximately [yyyy]. Where a residential unit is an individual's primary place of residence, the particular unit meets the requirement that the unit be for use and enjoyment as a place of residence for individuals. As such, all of the requirements of subparagraph 7(a)(i) of Part I of Schedule V to the ETA are met.

Additional Rent - property taxes

Property taxes paid by a property owner to the municipality are generally not subject to GST/HST. The property owner generally includes an amount that represents a recovery of such taxes from the lessee either as part of the basic rent or as an additional rent. Where a separate amount is paid by a lessee on account of property taxes assessed against the property owner, this amount is part of the consideration for the rental of the property, even if the lessee pays the amount directly to the municipality. As such, the amount will take on the same tax status as the rent. In this case, since the rental of the land on which the residential unit is situated is exempt of GST/HST, the additional amount charged to you by the Corporation for your share of the municipal taxes assessed in respect of your unit is not subject to GST/HST.

Tax paid in error

Under the ETA, where a person has paid an amount as or on account of tax that was not payable, the person may request a refund or credit of the amount from the supplier. A supplier may refund or credit the tax within two years after the day the amount was charged or collected. Further information on the time limitations and conditions for claiming refunds and credits is available in GST/HST Memoranda Series Chapter 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act available on the CRA Web site.

Where a refund or credit is not issued by the supplier, the person may make an application under subsection 261(1) for a rebate of the tax paid in error by completing and submitting application form GST 189 General Application for Rebate of Goods and Services Tax (GST)/Harmonized Sales Tax (HST). It should be noted that a rebate application made under section 261 cannot include amounts that were paid in error more than two years before the application is filed. Given the circumstances in this case, June 22, 2006 (the date we received your ruling request) will serve as the date for purposes of the two-year time limitation under section 261.

Please complete the attached rebate application and send a copy of this ruling, along with the completed rebate application and all of the original invoices issued to you by the Corporation in respect of your rental of Lot #[...], that are dated from [mm/dd/yyyy] to date, in which GST/HST was charged and that you paid, to the following address:

Summerside Tax Centre
Attention: [...]
Rebates Division
275 Pope Side Road
Summerside, PE C1N 5Z7
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-9212. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Carmela Antonelli
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 135239

July 4, 2011

Dear [Client]:

Subject:

GST/HST RULING
Tax status of sodium tripolyphosphate, citric acid and sodium citrate

Thank you for your letter of May 11, 2011, regarding the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of sodium tripolyphosphate, citric acid and sodium citrate.

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the relevant facts as follows.

1. Your client purchases sodium tripolyphosphate, citric acid and sodium citrate ("the products") and ships them directly to his customers (the recipients) without knowing how the products will be used by the recipients of these products.

2. The three products are designated as food additives in the Food and Drug Regulations, C.R.C., c. 870.

3. Your client buys and sells only "Food Grade" food additives, which is an industry term signifying that the products are suitable for use as a food additive in food or beverages for human consumption.

4. The products can be used for purposes other than as a food additive.

RULINGS REQUESTED

You want to know if the supply of the products is zero-rated as a supply of "ingredients", as this term is used in section 1 of Part III of Schedule VI, and under what conditions, if any.

Rulings Given

We rule that the supply of sodium tripolyphosphate, citric acid and sodium citrate is zero-rated as an "ingredient" pursuant to section 1 of Part III of Schedule VI provided it is not packaged or promoted for a use other than as an ingredient for food or beverages.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect their validity, and all relevant facts and transactions have been fully disclosed.

Explanation

It is CRA's position to recognise as an ingredient for purposes of section 1 of Part III of Schedule VI of the ETA a product which is so recognised by Health Canada. The fact that the products here at issue are designated as food additives in the Food and Drugs Regulations constitutes such recognition. Amongst the food additives recognised by Health Canada, only those specifically mentioned at paragraph 145 of GST/HST Memorandum 4.3 - Basic Groceries are excluded by CRA from being considered as "ingredients" for purposes of section 1 of Part III of Schedule VI. These are ethyl alcohol and other alcohols, and supplies of propane and carbon dioxide (CO2). None of the products here at issue are excluded from that recognition.

CRA's policy on the supply of products which could be used as an ingredient for food or beverages as well as for other uses is enunciated as follows at paragraph 144 of GST/HST Memorandum 4.3 - Basic Groceries: "Many products have uses as ingredients for food or beverages for human consumption. These same products may also have non-food or non-beverage uses. Such multi-use ingredients are zero-rated when supplied as ingredients for food or beverages for human consumption. When the product is supplied for a non-food use in the same packaging or form (e.g., in bulk) as when supplied for food or beverage uses, the supply is also zero-rated. When a good is packaged and promoted for non-food uses only, the supply is taxable."

For example, all supplies of a chemical with uses as an ingredient for food or beverages for human consumption will be zero-rated, when supplied in the same format (bulk or large bags) as when supplied for food uses. The zero-rated status will apply regardless of the status of the recipient or the intended use of the product.

If you require clarification with respect to any of the issues discussed in this letter, please call me at (613) 952-8815.

Yours truly,
Raymond Labelle
Senior Rulings Officer
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 136392

Business Number: [...]

October 31, 2011

Dear [Client]:

Subject:

GST/HST RULING
Application of GST/HST to [...] easements

Thank you for your letter of June 8, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to a [...] easement.

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the following from your letter dated June 8, 2011, the [...] ([Act A]) of [...] [Province X], and [...] (the Agreement) between [...] (the Organization) and [...] (the Grantor):

1. The Organization is a [...], as that term is defined in subsection 123(1), which was incorporated in [yyyy] under [...]. The Organization's registration number is [...].

2. The Organization acquires [...] land through a number of ways including by [...] easement. [...].

3. [...] easements are usually made in perpetuity and a single payment is usually made by the grantee to the owner of the land at the time the [...] easement is entered into and registered against the affected land. With respect to [...] easements intended to be made in perpetuity in [Province X], the Organization requires these easements to be made for [#] years. Under [Act A], an easement is only valid for the term specified. If an easement is granted in perpetuity, and no specific term is indicated in the agreement, the easement may not be valid. As well, under [...] [Act B] in [Province X], where no term is fixed for a registered condition, restriction or covenant, the interest expires [#] years after registration and will be deleted from the register.

4. Subsection [...] of [Act A] states [...].

5. The Organization and the Grantor entered into the Agreement on [mm/dd/yyyy]. The relevant provisions of the Agreement are summarized as follows:

a) The Grantor is the registered owner of real property (the Property) with the following legal description: [...]

b) The purchase price shall be $[...]. If the transaction is subject to [...] [GST/HST], then such [GST/HST] shall be in addition to and not included in the purchase price.

c) The purpose and intent of the Agreement, as outlined in Article [...], is [...].

d) Article [...] provides that [...]. In Section [...] of Article [...], "Term" means [...].

e) Article [...] provides that [...]
f) Article [...] states that [...]
Ruling Requested

You would like to know whether the supply of the [...] easement made under the Agreement should be treated as a supply of real property by way of sale or a supply of real property by way of arrangement similar to a lease or licence.

Ruling Given

Based on the facts set out above, we rule that the supply of the [...] easement made under the Agreement is a supply of real property by way of sale.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

An easement generally creates an interest in real property. Therefore, an easement that is an interest in real property is real property for GST/HST purposes.

For the purposes of GST/HST, the supply of an easement could either be considered a supply by way of lease, licence or similar arrangement or, alternatively, as a supply by way of sale. Factors to consider in making this determination are the nature of the interest being transferred, the terms of the agreement or other documentation relating to the transfer, and the actual dealings among the parties involved.

Where the right of way or easement gives the recipient the use or right to use real property without legal ownership in the underlying property over a specified period of time, the supply would normally be considered to be by way of an arrangement similar to a lease or license. Where the consideration for the supply of an easement relates to the actual grant or transfer of the equitable interest in the property and not to the use or right to use the property, the supply would normally be considered as being in respect of the sale of real property. An easement granted in perpetuity for a single consideration or the transfer of the easement by assignment may constitute a single sale.

In this case, the Agreement states [...] [direct quote] for consideration of $[...]. The Agreement provides that [...]. [direct quote]

Based on the substance of the transaction between the Organization and the Grantor, as well as the intention of the two parties, it appears that an easement in perpetuity was the intended purpose of the Agreement. The relevant legislation does not allow easements to be granted in perpetuity and the length of time for which the easement is granted is a significant length of time. The Organization paid one amount to the Grantor at the time the easement was established rather than a series of ongoing payments.

Based on these facts, it is our view that the supply of the easement in this case is a supply by way of sale of real property.

ADDITIONAL INFORMATION

Generally, all supplies of real property are taxable unless a specific exemption applies. It does not appear that there are any provisions in the ETA that would exempt the sale of land by the Grantor in this situation and if that is the case, the sale would be a taxable supply and subject to [GST/HST] at [...]%.

Where a taxable supply of real property is made by way of sale, subsection 221(2) may apply. Under subsection 221(1), every supplier must collect the GST/HST on a taxable supply. However, there is an exception to this requirement under subsection 221(2). Generally, if a supplier makes a taxable supply of real property by way of sale to a recipient who is registered for GST/HST, the supplier is not required to collect the tax payable on the supply. Rather, under subsection 228(4), the recipient is required to remit the tax to the Canada Revenue Agency (CRA).

As the Organization is registered for GST/HST, if the sale of the easement is a taxable supply the Organization would be required to remit the HST directly to the CRA instead of paying the HST to the Grantor. Paragraphs 88 - 89 of GST/HST Memorandum 19.1, Real Property and the GST/HST, provide information on when and how the tax payable is to be reported in such a case.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4393. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Melissa Mercer
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 137315

August 19, 2011

Dear [Client]:

Subject:

GST/HST RULING
Application of GST/HST to [...] [ABC's] [...] [Fruit] Juice

Thank you for your letter of June 6, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of [...] [ABC's] [...]% [...] [Fruit] Juice (the Product).

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the facts to be as follows:

1. The Product is [...] [Fruit] juice.

2. The Product is sold in 500 ml [...] bottles and is non-carbonated.

3. The Product is marketed as a juice and as an ingredient.

4. The label states [...].

5. On the website[...] it is stated that:

a) [...] [quality, packaging and ingredients described]
b) [...] [suggested serving size, benefits and uses described]
Ruling Requested

You would like to know if the Product is zero-rated under section 1 of Part III of Schedule VI to the ETA.

Ruling Given

Based on the facts set out above, we rule that the supply of the Product is excluded from zero-rating pursuant to paragraph 1(n) of Part III of Schedule VI, and is therefore taxable at the HST rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia, and GST applies at the rate of 5% in the remaining provinces and territories.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories, unless the supply is zero-rated, pursuant to subsection 165(3). The tax rate in respect of a zero-rated supply is 0%, where a zero-rated supply is a supply that is included in Schedule VI. Under Part III of Schedule VI, certain supplies of basic groceries are zero-rated. Section 1 of Part III of Schedule VI zero-rates supplies of food or beverages for human consumption, including sweetening agents, seasonings and other ingredients mixed with or used in the preparation of such food or beverages, other than supplies included in paragraphs (a) to (r) of that section.

Supplies of beverages (other than unflavoured milk), or pudding, including flavoured gelatine, mousse, flavoured whipped dessert product or any other products similar to pudding are excluded from zero-rating under paragraph 1(n) of Part III of Schedule VI, except
(i) when prepared and pre-packaged specially for consumption by babies,
(ii) when sold in multiples, pre-packaged by the manufacturer or producer, of single servings, or
(iii) when the cans, bottles or other primary containers in which the beverages or products are sold contain a quantity exceeding a single serving.

Under paragraph 1(n) of Part III of Schedule VI a beverage size is considered a single serving when the serving size is less than 600ml. The supply of a single serving beverage is excluded from zero-rating under paragraph 1(n) of Part III of Schedule VI. While we appreciate the fact that there is a recommended daily serving [...] to achieve maximum health benefits, it would not be unreasonable for a person to consume a 500 ml bottle of [...] [Fruit] juice in a single occasion. Further, we cannot distinguish this beverage sufficiently from similar beverages sold in quantities of less than 600 ml. Therefore, the supply of the Product in a 500ml bottle is considered a single serving and is subject to the HST at a rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-5124. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Angela Stachowski
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada. / Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency.

[destinataire]
Direction de l'accise et des décisions de la TPS/TVH
Place de Ville, Tour A, 15e étage
320, rue Queen
Ottawa ON K1A 0L5

Numéro de dossier: 134684

Numéro d'entreprise: [...]

27 avril 2011

Objet:

GST/HST RULING
Valeur de l'importation temporaire d'un aéronef loué

[Cher client],

Merci pour votre facsimilé du 24 avril 2011, dans lequel vous demandez l'autorisation d'un allégement partiel de la taxe sur les produits et services (TPS)/taxe de vente harmonisée (TVH), relativement à l'importation d'un aéronef loué.

Nous comprenons que :

• [...] (le " preneur ") a conclu une entente pour louer l'aéronef suivant de [...] (le " bailleur "), un non-résident avec qui le preneur n'a aucun lien de dépendance.

Type d'aéronef Numéro du modèle Numéro de série Immatriculation
[...] [...] [...] [...]

• Le contrat de location commence le [jj/mm/aaaa] et se termine le [jj/mm/aaaa].

• L'aéronef sera importé à [...] [ville 1] (aéroport [...]) au bureau de douane [...] le [jj/mm/aaaa] et sera exporté le [jj/mm/aaaa].

• Au terme d'un bail conclu avec le bailleur, le preneur ne doit pas détenir l'aéronef au Canada pendant plus de 24 mois.

Compte tenu de l'information fournie ci-dessus, nous accordons, par la présente, l'autorisation de déterminer la valeur de l'aéronef importé en vertu du paragraphe 215(2) de la Loi sur la taxe d'accise et de l'article 14 du Règlement sur la valeur des importations (TPS/TVH). Cette valeur est déterminée en calculant 1/60 de la valeur en douane de l'aéronef pour chaque mois ou partie de mois qu'il reste au Canada, en y ajoutant les droits à payer relativement à l'aéronef. La présente autorisation expire le [jj/mm/aaaa] si l'aéronef n'est pas importé au plus tard à cette date. Toute demande de prolongation de la période d'autorisation doit être présentée à notre bureau pour approbation avant la date d'expiration.

Pour avoir droit à l'allégement partiel en vertu de l'article 14 du Règlement sur la valeur des importations (TPS/TVH), le moyen de transport importé doit être exporté au plus tard au premier en date des jours suivants : le jour qui suit de 24 mois le jour de l'importation du moyen de transport ou le jour où il est mis fin au bail. De plus, si le moyen de transport est importé plus d'une fois, le nombre cumulatif dans les périodes tout au long desquelles le preneur détient le moyen de transport au Canada aux termes d'un bail conclu avec le bailleur ne doit pas dépasser 24 mois.

L'importateur est tenu de satisfaire aux exigences des douanes, énoncées dans le mémorandum des douanes D8-1-1, Règlement sur l'importation temporaire de marchandises (Numéro tarifiaire 9993.00.00), relativement au traitement et au contrôle des documents d'importation temporaires ainsi que des documents et des procédures d'exportation.

Une copie de la présente a été envoyée à l'Agence des services frontaliers du Canada [...]. Veuillez communiquer avec cet agent avant l'importation de l'aéronef pour obtenir des renseignements supplémentaires concernant les procédures d'importation et les prescriptions relatives à l'exportation.

Pour toute information supplémentaire relativement aux points discutés dans cette lettre, veuillez communiquer avec moi au numéro suivant: 613-952-8530. Si vous avez d'autres questions portant sur l'interprétation ou l'application de la TPS/TVH, veuillez communiquer avec un agent au 1-800 959-8296.

Veuillez agréer, [client], l'expression de mes sentiments distingués.

Carolle Mercier
Unité des questions frontalières / Border Issues Unit;
Division des opérations générales et des questions frontalières / General Operations & Border Issues Division;
Direction de l'accise et des décisions de la TPS/TVH / Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 132613

May 2, 2011

Dear [Client]:

Subject:

GST/HST RULING
Application of the GST/HST to insurance [...] services

Thank you for your letters of [mm/dd/yyyy], and [mm/dd/yyyy] concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to insurance [...] services provided by [...] [the Company]. We apologize for the delay in responding.

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the facts to be as follows based on your letters, the various attachments to those letters (described below), and our telephone conversations:

1. [...] [The Company] is registered for the GST/HST.

2. [...] and [...] (hereinafter the [Corporations]) are both insurance corporations located in [Province X]. [...].

3. [The Corporations] market their group credit insurance program ("Program") to [the Company] customers in Canada ("[...] Customers") on an exclusive basis under the name [...] ("Plan"). The Program provides credit insurance coverage to protect the [...] Customer's [...] credit card ("[...]Card") account balances in the event of certain incidents including life and dismemberment, critical illness, disability, involuntary unemployment, leave of absence, and property protection. The Program is undertaken by [...]. The [Corporations] do not contribute resources or personnel under the Program.

4. Effective [mm/dd/yyyy], the [Corporations] entered into a [...] Agreement with [the Company] ("Agreement") to license [the Company] and [...] ("Trade Marks and Trade Names") for use in Canada and to have [the Company] provide services in connection with the Program.

5. Article [...] of the Agreement, states that [...]

6. The Insurance [...] Services are performed by the employees of [the Company] located at the [...]. No call centres are utilized. Typically, the sequence of events is as follows:

• [The Company] salesperson [...] closes a sale [...].

• [The Company] salesperson then asks the [...] Customer how they would like to pay [...]. One of the options will be to pay using a [...] Card which usually involves some type of deferred payment plan.

• If the [...] Customer chooses to pay for the purchase using a [...] Card, [the Company] salesperson will then ask if the [...] Customer is interested in purchasing an Insurance Product that will cover the [...] Customer's payment. [The Company] salesperson promotes the Insurance Product by providing the [...] Customer with a description of the benefits of purchasing credit insurance protection under the Plan and how the Plan works

• If a [...] Customer is interested in purchasing the Insurance Product, an assessment of eligibility is performed. If the [...] Customer meets the credit criteria for the [...] Card then the [...] Customer is almost always considered eligible for the Insurance Product, as the qualifications are very similar.

• If the [...] Customer is eligible for the Insurance Product, [the Company] salesperson assists the [...] Customer in completing the credit insurance application form and forwards that information to the [Corporations].

• At all times during the sales process and afterwards, [the Company] salesperson is available to assist the [...] Customer with any questions it has in respect of the Insurance Product.

7. To apply for the Insurance Product under the Plan, the [...] Customer must be a [...] Card holder who is at least [...] years of age, and agrees to pay the monthly premiums. The [...] Customer may apply for the Insurance Product in one of two formats:

• By opting directly on the [...] Card application form. This option states that the Insurance Products are underwritten by (i.e., the[Corporations]), and provides details on the rates, coverage and cancellation terms; or
• By opting to complete a separate application form. This option is available to holders of the [...] Card who did not opt for the Insurance Product when making the initial application but now choose to do so at the time of purchase.

8. The insurance coverage under the Plan begins on the date that the [Corporations] receive from the [...] Customer the signed application form. [The Company] [...] confirm that the said coverage begins immediately upon signing the request for enrolment.

9. Within [...] days of enrolment, the [Corporations] will mail to the [...] Customer the [...] ("Certificate") providing the full details of the Insurance Product's coverage, any exclusions or limitations, and confirmation that the [...] Customer is insured subject to the terms of the group policy between the [Corporations] and the creditors to whom the debt is owed [...] while the required premiums are paid.

10. Article [...] of the Agreement explains in part that: [...]
11. In order to perform the Insurance [...] Services in [...] [Province X], [the Company] is required [...] to obtain a license [...]

12. We understand that not all provinces require licenses in order for [the Company] to perform Insurance [...] Services in their respective province.

Ruling Requested

You would like to know whether the quarterly fee charged by [the Company] to the [Corporations] under the Agreement is consideration for the supply of a financial service.

Ruling Given

Based on the facts set out above, we rule that the portion of the fee that relates to consideration for the supply of Insurance [...] Services is a supply of a financial service, and that the remaining portion of the fee that relates to consideration for the supply of property in connection with the granting of rights to the [Corporations] by [the Company] is not a supply of a financial service unless section 138 or 139 apply to deem that property to form part of the financial service.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Where an agreement provides for the provision of a number of services or property and services, it must first be determined whether a single supply or multiple supplies are being provided under the agreement. This distinction is important in cases where a combination of services and or property is supplied by a person under an agreement, some of which would be taxable and some of which would be exempt if supplied separately.

Based on the Agreement, [the Company] grants a license of its Trade Marks and Trade Names as well as an Insurance [...] Service to the [Corporations]. Whether [the Company] is making a single supply or multiple supplies is a question of fact. GST/HST Policy Statement P-077R2, Single and Multiple Supplies, provides additional information on determining whether a single supply or multiple supplies are being provided, including the following principles.

1. Every supply should be regarded as distinct and independent.

2. A supply that is a single supply from an economic point of view should not be artificially split.

3. There is a single supply where one or more elements constitute the supply and any remaining elements serve only to enhance the supply.

When reviewing the facts set out above, the granting of the license for the Trade Marks and Trade Names by [the Company] to the [Corporations] and the Insurance [...] Services are distinct and independent supplies that are each described in the Agreement. [The Company] is therefore providing under the Agreement a supply of Insurance [...] Services and a separate supply of property to the [Corporations] for which a single consideration is charged.

All supplies of financial services are exempt under Part VII of Schedule V unless they are specifically zero-rated under Part XI of Schedule VI (which generally requires that the supply be made by a financial institution to a non-resident and that certain other conditions are met). A service will be a financial service where it is included in any of paragraphs (a) to (m) of the definition of financial service in subsection 123(1) and is not otherwise excluded by any of paragraphs (n) to (t) of that same definition.

A financial service includes, for example, under paragraph (d), the issue, granting and transfer of ownership or repayment of a financial instrument. A "financial instrument" is defined in subsection 123(1) and includes an "insurance policy" which, in turn, is defined under that provision and includes, among other things, a policy or contract of insurance (other than a warranty in respect of the quality, fitness or performance of tangible property, where the warranty is supplied to a person who acquires the property otherwise than for resale) that is issued by an insurer. Other examples of a financial service are in paragraph (f.1), the payment or receipt of an amount in full or partial satisfaction of a claim arising under an insurance policy; and in paragraph (l), the "arranging for" a service that is financial service.

The term "arranging for" is generally intended to include intermediation activities that are normally performed by financial intermediaries described in subparagraph 149(1)(a)(iii), such as agents, brokers and dealers in financial instruments or money. In determining if an intermediary's service is included in paragraph (l), all the facts surrounding the transaction, including the following factors, must be considered:

• the degree of direct involvement and effort of the person in the provision of a financial service referred to in any of paragraphs (a) to (i);
• the time expended by the intermediary in the provision of a financial service referred to in any of paragraphs (a) to (i);
• the degree of reliance of either or both the supplier and the recipient on the intermediary in the course of providing a financial service referred to in any of paragraphs (a) to (i);
• the intention of the intermediary to effect a supply of a financial service referred to in any of paragraphs (a) to (i); and
• the normal activities of an intermediary in a given industry (including whether the intermediary is engaged in business of providing financial services).

Based on this information, the supply of the Insurance [...] Services provided by [the Company] is a supply of a service of "arranging for" a financial service under paragraph (l) of the definition of financial service. However, the separate supply of property (i.e., the granting of rights) is not a supply of a financial service, and depending on the fair market value of the property being supplied, section 138 or 139 may apply to deem that property to form part of a supply of financial services.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9262. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Paul Lafond
Financial Institutions Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 133041

April 18, 2011

Dear [Client]:

Subject:

GST/HST RULING
Temporary Importation - Racing [...] Equipment

Thank you for your letter of January 28, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the temporary importation of racing [...] equipment.

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the facts to be as follows:

1. The [...] [(Company)] is a non-resident located in [...] [Country X] and runs [...]. [...]
2. The [...] will each be holding [...] events in [...] [Province X] [...]
3. [...] the [Company] intends to temporarily import: [...]

4. The racing [...] equipment and the [...] equipment are not for sale, for lease or for further manufacturing or further processing while in Canada.

5. The Canada Border Services Agency has determined that the conditions of items 38 and 41 of the schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations are met for the temporary importation of the racing [...] equipment. Additionally, the Canada Border Services Agency has determined that the conditions of item 42 of the schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations are met for the temporary importation of the [...] equipment.

Ruling Requested

You would like to know whether the temporary importation of the racing [...] equipment and the temporary importation of the [...] equipment are non-taxable importations for GST/HST purposes.

Ruling Given

Based on the facts set out above, we rule that the temporary importation of the racing [...] equipment and the temporary importation of the [...] equipment are non-taxable importations for GST/HST purposes.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Generally, all goods imported into Canada are taxable for GST/HST purposes unless specifically relieved under section 213 of the ETA. Importations of goods relieved of tax under section 213 of the ETA are set out in Schedule VII to the ETA. Section 8 of Schedule VII to the ETA deems prescribed goods that are imported in prescribed circumstances into Canada to be non-taxable for GST/HST purposes. Subparagraph 3(i)(i) of the Non-Taxable Imported Goods (GST/HST) Regulations includes goods described in items 41 and 42 of the schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations in circumstances where the terms and conditions of the regulations have been met. Similarly, subparagraph 3(i)(ii) of the Non-Taxable Imported Goods (GST/HST) Regulations includes goods described in item 38 of the schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations when a non-resident imports the goods in circumstances where the terms and conditions of the regulations have been met.

For your convenience, find enclosed a copy of GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-4294. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Donato Licursi
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 133908

April 11, 2011

Dear [Client]:

Subject:

GST/HST RULING
Tax Status of [...] Crackers

Thank you for your letter of March 25, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supplies of [...] Crackers (the Product).

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the facts to be as follows:

1. [The Product comes] in [...] flavours [...], and [...] in a [...]g box..

2. The labelling of the Product [...].

3. The [...] flavoured product is [...]

4. The Product's shape is [...].

5. [...] [listing of the Product's ingredients]
6. [...] [listing of the Product's ingredients]

7. You state that [...] has requested that retailers shelve the Product in the [...].

8. The Products provided are currently distributed in [...]
Ruling Requested

You would like to know if supplies of the Product are zero-rated pursuant to section 1 of Part III of Schedule VI.

Ruling Given

Based on the facts set out above, we rule that supplies of the Product are zero-rated pursuant to section 1 of Part III of Schedule VI.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Section 1 of Part III of Schedule VI zero-rates supplies of food or beverages for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages) other than supplies listed in paragraphs (a) to (r) of that section. Paragraph 1(f) of Part III of Schedule VI excludes from zero-rating supplies of chips, crisps, puffs, curls or sticks (such as potato chips, corn chips, cheese puffs, potato sticks, bacon crisps and cheese curls), other similar snack foods or popcorn and brittle pretzels (but not including any product that is sold primarily as a breakfast cereal). Paragraph 1(m) excludes from zero-rating single servings of baked goods such as cakes, muffins, pies, pastries, etc. However, paragraph (m) does not apply to bread products such as crackers, bagels, English muffins, croissants or bread rolls that do not have a sweetened coating or filling.

There are significant differences between the Product and the [...], whereas there are no significant differences between the Product and the [...]. The Product label states that it is a [...], although labelling is a contributing factor in determining zero-rated status, it alone is not a determinative factor, thus the fact that the term [...] is used on the label does not automatically preclude the Product from being zero-rated. Other factors such as appearance, ingredients, taste, texture, ingredients, and product placement are all reflective of the Product being considered a cracker. The Product is not excluded by paragraphs (a) to (r), therefore it is zero-rated.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-5124. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Angela Stachowski
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.

[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 134404

June 24, 2011

Dear [Client]:

Subject:

GST/HST RULING
Employee Rebate

Thank you for your emails of November 4, 2010 and April 13, 2011, concerning applications for Employee Rebates under section 253 of the Excise Tax Act (ETA) for the [yyyy] through [yyyy] tax years.

Our understanding is as follows.

1. In a letter dated [mm/dd/yyyy], and addressed to [...] of the [...] TSO, [...] [the representative], representing [...] [Individual A], requested Employee Rebates under section 253 of the ETA for the [yyyy] through [yyyy] tax years.

[The representative's] commentary and rationale to support the rebate claims follow in paragraphs 2 through 16.

2. [Individual A] and [...] [Individual B] are married.

3. [Individual A] worked as a commissioned [salesperson] for [...] [Company X].

4. During these years, [Individual B] provided services to [Individual A] to assist [Individual A] with [Individual A's] sales work. [Individual A] paid [Individual B] annually as an independent contractor for these services. [Individual A] paid [Individual B] and deducted the amount paid each year as an expense under paragraph 8(1)(f) of the Income Tax Act (ITA).

5. [Individual B] was not aware that since [Individual B's] fees earned from [Individual A] exceeded $30,000 per year, [Individual B] was required to register for GST, collect GST from [Individual A], and remit net tax each year.

6. The CRA noticed that [Individual B] was reporting business income sufficiently high that [Individual B] should register for GST. On [mm/dd/yyyy] the CRA assessed [Individual B] for unremitted GST for [yyyy] to [yyyy], requested at the same time that [Individual B] file [Individual B's] unfiled GST returns.

7. [Individual B] filed GST returns as requested and that were reassessed as filed on [mm/dd/yyyy]. The total assessment of GST plus interest and penalties was $[...].

8. [The representative] states in [the representative's] letter that in filing [Individual B's] GST return, [Individual B] treated the amounts billed to [Individual A] each year as GST-included amounts. [Individual A] agreed with this approach. The CRA accepted this treatment when reassessing [Individual B], consistent with CRA Policy P-116, Collection of GST, by a Supplier, Where the Invoice is Silent on the Tax Payable.

9. [Individual A] paid the following amounts of GST, included in the amounts charged by [Individual B] to [Individual A] for [Individual B's] services over the years. [...]

10. If [Individual B] had charged [Individual A] GST each year, [Individual A] would have been able to claim a GST Employee Rebate under section 253 of the ETA for the amount of the GST [Individual A] paid [Individual B]. [Individual A] did claim the Employee Rebate each year in respect of other expenses, on Form GST370 filed with [Individual A's] tax return, and the rebate was allowed to [Individual A] each year.

11. Subsection 253(4) of the ETA provides for a four-year deadline for claiming the rebate, unless CRA extends the deadline.

12. Subsection 253(6) of the ETA provides an unlimited period during which CRA has discretion to allow additional GST Employee Rebates.

13. Subsection 253(6) does not contain a 10-year limitation period for applications, as do other Taxpayer Relief provisions such as subsections 152(4.2) and 220(3.1) of the ITA and section 281.1 of the ETA.

14. The representative requested that CRA apply subsection 253(6) of the ETA to allow [Individual A] the additional amounts of GST paid by [Individual A] which would have been allowed if [Individual A] had claimed it each year, as per the table above.

15. The representative submits that it would be appropriate for CRA to exercise its discretion in this case for the following reasons:

• If [Individual A] had been an independent contractor, [Individual A] would have the right under subsection 225(4) of the ETA to claim such relief (and this would have been a wash transaction as contemplated by GST/HST Memorandum Series Chapter 16.3.1).

• From a tax policy point of view, the GST charged by [Individual B] to [Individual A] should be recoverable by [Individual A]. That is why section 253 of the ETA permits a full rebate for such GST.

• Subsection 253(6) of the ETA appears to have been designed for this kind of situation, where the taxpayer did not claim a rebate for an amount of GST that was inadvertently not charged to [Individual A].

• The assessment of $[...] resulting from [Individual B's] failure to remit GST is onerous, and a reassessment under subsection 253(6) of the ETA would provide significant relief of $[...].

16. The CRA accepted taxpayer's claims for rebates for the [yyyy] to [yyyy] tax years. The earlier years were not allowed as CRA stated that a reassessment of T1 returns can only be issued according to the ITA and that there is 10-year limitation on the reassessment period in that Act. CRA processed the rebates for [yyyy] to [yyyy] as additional employment expenses.

17. In a subsequent letter dated [mm/dd/yyyy], and addressed to [...] of the [...] TSO, [the representative] provided further comments in support of the rebate claim. These comments follow in paragraphs 18 and 19.

18. The representative advised that [the representative's] client's rebate requests were not processed correctly. Instead of the amounts requested for GST Employee Rebates, amounts were processed as additional employment expenses, with a small adjustment to the GST Employee Rebate in each year.

19. The adjustments were processed only for taxation years [yyyy] through [yyyy]. As explained in [the representative's] previous letter, the representative stated there is no 10 year limitation on the discretionary allowance of a late-filed GST employee rebate under subsection 253 of the ETA. Since CRA has agreed to exercise its discretion to allow these late claims, [the representative] submits that the adjustments should apply for [yyyy] to [yyyy], not only [yyyy] to [yyyy].

20. In a letter dated [mm/dd/yyyy], CRA advised the representative that the 10 year limit was applicable to subsection 253 of the ETA and that no adjustments to the [yyyy] to [yyyy] tax years would be made.

21. In a letter dated October 5, 2010, addressed to [...] of the [...] TSO, [the representative] again attempted to present a favourable case in support of the rebate claims. [The representative's] comments follow in paragraphs 22 through 28.

22. Subsection 253(5) of the ETA specifically lists certain provisions of the ITA that apply to an employee rebate:

• Subsections 160.1(1), 164(3), (3.1) and (4), for purposes of calculating interest;
• Sections 165 to 167 (objections and extensions of time); and
• Division J of Part I (sections 169-180 - appeals)

23. Notably absent from the list in subsection 253(5) of the ETA is any reference to subsection 152(4.2), or to section 152 of the ITA as a whole.

24. Subsection 152(4.2) is in Division I of Part I of the ITA. It would have been very easy for subsection 253(5) of the ETA to provide simply that "Divisions I and J of Part I" of the ITA apply.

25. It is quite evident that when subsection 253(5) of the ETA specifies that Division J of Part I of the ITA applies but does not specify that Division I of Part I of the ITA applies, Division I is not intended to apply.

26. Further, subsection 152(4.2) of the ITA is not needed, and relief was not requested under it, but rather under subsection 253(6) of the ETA.

27. Subsection 253(6) of the ETA stands on its own. It does not need subsection 152(4.2) of the ITA to function. Subsection 253(6) of the ETA specifically permits the Minister "at any time" to reassess or make an additional assessment of the rebate, provided the taxpayer has made application for such relief. The words "at any time" are clear. They do not contain a requirement that the application must be made within 10 years, as subsection 152(4.2) of the ITA does.

28. Subsection 253(7) of the ETA specifically refers to subsection 152(4.2) of the ITA, but only for the limited purpose of determining the way in which subsection 164(3.2) of the ITA applies. If subsection 152(4.2) of the ITA had been intended to apply to employee rebates, subsection 253(7) of the ETA would have been written to that effect.

Interpretation Requested

You have asked that we respond to the following questions and statements.

1. You would like to know if CRA can reassess [Individual A's] [yyyy] to [yyyy] returns under the provisions of the ETA.

2. A review of [Individual A's] T1 Returns contradicts the above statement (referring to paragraph 10). [Individual A] did not file the GST370 rebate application form in [tax years] [...]. [Individual A] filed and received rebates in [tax years] [...] only.

3. The small rebates did not meet subsection 253(6) as the individual had not filed in prescribed form nor had the Minister assessed the amount of a rebate under subsection 253(1).

4. Is the intent of subsection 253(3) not there to permit the CRA to allow the late filed rebates (after the 4 year limitation) in cases where the taxpayer late files his/her T1 return with the application in prescribed form?

5. If we look at the facts of this case, clearly [Individual A] did not pay the GST in the years under the review as [Individual A's] spouse was a non-registrant until [yyyy]. Furthermore, when [Individual B] filed [Individual B's] GST returns [Individual B] reported the full fees [Individual A] deducted in the year as [Individual B's] sales for the year. How can we then deem that the GST was paid in the year and deducted on [Individual A's] income tax return? If this was an arms length transaction would we treat it the same (GST deemed paid)? Are we to ignore the fact that GST has to be paid before claiming a rebate?

6. If we deem the GST charged on [Individual B's] earnings (when [Individual B] was made aware that [Individual B] was required to collect and remit the GST on [Individual B's] subcontractor fees in [yyyy]) and deem them paid by [Individual B] (by virtue of their non-arms length relationship) we could allow the full amount of GST charged as an additional deduction in [yyyy] pursuant to paragraph 8(1)(f) of the ITA but not sure on how we could allow a rebate for the full amount of GST paid as the rebate is based on expenses that you deducted on your tax return in the year and the subcontractor fees related to that GST payment was deducted in a previous year.

7. Can we accept a late filed stand alone GST370 form for each of [tax years] [...] should they be submitted by the individual?

Interpretation Given

We have responded to your questions and statements in the order presented.

1. Subsection 253(3) of the ETA gives the Minister the discretion to accept an application for the rebate on any date the Minister may decide. Subsection 298(2) allows an assessment of an amount of a rebate under subsection 297(1) at any time. Subsection 253(6) gives the Minister the discretion to reassess or make an additional assessment at any time. [...]. As such, [Individual A] is eligible for the Employee and Partner Rebates. (iFootnote 1)

2. We agree that the records show this to be true but this does not affect [Individual A's] eligibility for the rebates. As mentioned above, subsection 253(3) of the ETA gives the Minister the discretion to accept an application for the rebate on any date the Minister may decide.

3. Section 32 of the Interpretation Act states, "Where a form is prescribed, deviations from that form, not affecting the substance or calculated to mislead, do not invalidate the form used." Also, CRA has in the past accepted election forms not in prescribed form where the Act required them. However, the information contained in an alternative document must be similar to the information that is required on the prescribed form in order that any deviations do not affect the substance of the form and are not [calculated] to mislead.

4. As noted above, subsection 253(3) of the ETA gives the Minister the discretion to accept an application for rebate on any date the Minister may decide. Given that the rebate is administered under the income tax system, subsection 253(3) was amended in 2000 to permit the Minister to accept an application for the rebate that is filed later than the due date set out in that subsection. This is consistent with the Minister's ability to accept late-filed returns and other documents under the ITA in extraordinary circumstances that have prevented the filer from filing on time.

On page 24 of the PDF version of the Guide, T4044 Employment Expenses it states, "If you do not file your rebate application with your tax return, send it along with a letter to your tax centre." and "If you do not file your rebate application when you file your tax return, you have up to four years from the end of the year to which the expenses relate to file an application." Therefore, it appears that the CRA has made an administrative decision to accept rebate applications that do not accompany a T1 return.

The prescribed form issue is addressed in the answer to 3 above.

5. [Individual B] was a GST/HST registrant by definition, since under subsection 123(1), a registrant is a person who is registered, or who is required to be registered, under Subdivision d of Division V of the Act. The facts of the case (refer to facts 6-9) suggest that [Individual B] was a registrant in [yyyy] and that the amounts [Individual A] paid to [Individual B] were GST-included. In the facts of this case, [Individual A] paid GST on these expenses.

6. The facts show the GST-included expenses were deducted from [Individual A's] income in the years in question. The rebate application can be allowed, subject to the Minister's discretion, as discussed in the answer to 2, above.

7. See the answer to 4 above.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-2488.

Yours truly,
Doug Campbell
A/Senior Rulings Officer
General Operations Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
i 1 [...]
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UNCLASSIFIED