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.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 187190
Dear [Client]:
Subject: GST/HST RULING
[…][Conference to be held in 2018]
Thank you for your letter of [mm/dd/yyyy], concerning whether an upcoming event qualifies as a foreign convention for purposes of the goods and services tax/harmonized sales tax (GST/HST). We apologize for the delay in our response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
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 Conference]) is a […] meeting of scientists from around the world that provides a forum for the presentation and discussion of recent research in the field of […][Z].
2. Your company, […], is providing conference management services for the […] edition of [the Conference], which is to be presented by […] ([…][the Organization]) in […][Province A, Canada] from [mm/dd] to [mm/dd], [yyyy]. According to the 2018 [Conference] website ([…]), [the Conference] is sponsored by [the Organization] and will be the combined annual meeting for a number of other national [Z] societies.
3. [The Organization] was established with the following purposes:
[…][Description of the purposes of the Organization];
4. [The Organization’s] registered office is located […][in the United States of America]. According to its Constitution and other information available on its website […]:
- […][Description of the Organization’s membership categories]
- The affairs of [the Organization] are ultimately conducted by its […][Council] and the […][Executive], where each member has one vote. […][Description of the structure of the Organization’s Council and Executive].
- [The Organization’s] current president, secretary-general, and treasurer are all non-residents of Canada. [The Organization’s] list of officers also includes [#] [Council] representatives, […][10%] of whom are Canadian residents.
- In order to achieve its objectives, [the Organization] carries out various activities, including convening [the Conference] […] to provide a forum for the presentation and discussion of recent research among scientists from all countries. [The Organization’s Council] designates one of the member national [Z] societies or regional groups to host and organize [the Conference] (the host society).
- The host society chooses the place where [the Conference] will be held, subject to approval by [the Organization’s Council]. The host society is responsible for the financial arrangements and for appointing […] ([…][the Organizing Committee]) for each [Conference]. The detailed organization and arrangements for [the Conference] are at the discretion of [the Organizing Committee], in conjunction with [the Organization’s Executive]. Registration fees for delegates attending [the Conference] may be charged by the host society and [the Organization] provides the host society with a guarantee that is to be reimbursed at the end of [the Conference] in case of a profit.
- [The Organization’s Council] appoints a Chair of […] ([…][the Programme Committee]), which is responsible for the scientific programme of each [Conference]. In addition to the Chair, this committee consists of [the Organization’s Executive], the Chair of [the Organizing Committee], as well as a broad representation of the various national societies and regional groups.
5. The 2018 [Conference] is subject to […][the Organization’s Conference Guidelines] ([…][the Conference Guidelines]), […] adopted by [the Organization] in [yyyy] and the key provisions of which are as follows:
- Section […] – states the purpose of [the Conference] and discusses the process of calling for proposals to host and organize [the Conference]. Proposals must meet certain requirements, such as the availability of suitable facilities, support from a local professional [Conference] organizer, consistency with previous [Conferences] regarding costs to registrants, commitment to [the Conference] from local […][persons in the field of Z], and written support from [the Organization’s] member society or region that will act as host.
- Section […] – provides information regarding [the Programme Committee] and includes a note that […][the Chair of the Organizing Committee] will be an ex officio member of [the Programme Committee]; a requirement that [the Programme Committee] work in a timely manner according to a schedule agreed to with [the Organizing Committee] and approved by [the Organization], with its proposals being subject to approval by [the Organization’s Council]; and a statement that the members of [the Programme Committee] will be named in [the Conference] programme, should be willing to collectively endorse the eventual programme, and will be expected to support [the Conference] actively to the extent of attending themselves and encouraging others to do so.
- Section […] – describes various responsibilities of [the Organizing Committee] and details the budgeting process and terms. Under this section, [the Chair of the Organizing Committee] takes responsibility to organize [the Conference] on behalf of both [the Organization] and the host society or regional group. The [Chair of the Organizing Committee] forms an [Organizing Committee] to carry out this commitment and bases the scientific programme on the decisions of [the Programme Committee] (as approved by [the Organization’s Council]).
- Section […] – [the Organizing Committee]’s responsibilities also include preparing a budget for [the Conference], which should be built on a conservative target number of registrants, in consultation with and as advised by [the Organization]. [The Conference] is expected to yield a profit, as guided by [the Organization’s Council]. The budget will be subject to approval by the [Organization’s Executive and Council]. [The Organization] will then assume, on the basis of this budget, responsibility for profit or loss, as determined from audited accounts prepared by [the Organizing Committee]. However, [the Organization] may seek to offset its liability with other parties offering written guarantees. In that case, loss would be shared between [the Organization] and other guarantors, and a pro rata share of any profit would be offered to those guarantors. [The Organization] may also decide to offer an ex gratia payment from its share of any profit to the host society.
- Section […] – [the Organization] will guarantee a specific budget it has approved that is built and maintained on the above principles against loss. As a condition of this guarantee, [the Conference] organizers (i.e., [the Organizing Committee]) shall periodically inform [the Organization’s Executive] of the standing of the budget and projections.
- Section […] – provides the specific amounts that must be included in the budget for [the Conference], including costs of venue hire and audio-visual facilities, local transport during [the Conference], and invited speakers’ travel and accommodation (within limits agreed with [the Organization]). The budget is also to include projected income from registration fees, which are to be set to give advantage to [the Organization’s] members and […]. In addition, pursuant to section […], [the Organizing Committee] is required to open a bank account for all receipts related to [the Conference], is responsible for handling all matters concerning receipts and payments, and carries all liability for such transactions. [The Organization] shall not be liable for any indebtedness incurred by [the Organizing Committee] or host society, except as indicated above in section […].
- Section […] – states that success of [the Conference] depends on continual positive interaction among [the Organizing Committee], [the Programme Committee], and the [Organization’s Executive]. [The Chair of the Programme Committee] and [the Chair of the Organizing Committee] undertake to report to [the Organization’s Executive and/or Council] as requested, and conversely may request [the Organization’s Executive and/or Council] to discuss problems or consider revision of agreed plans, or to resolve disputes between [the Programme Committee] and [the Organizing Committee]. Decisions of [the Organization’s Executive or Council] shall be final.
- Section […] – other sponsors may be listed in [the Conference] literature, but less prominently than […] [“the Organization”], and not in association with […] [the “title” of the Conference].
- [The Conference] Guidelines are concluded by providing certain principles that are to guide the actions of [the Programme Committee] and [the Organizing Committee] Chairs in organizing [the Conference], including the following:
- [The Organization’s Conference] organizers are acting on behalf of and in the name of [the Organization], and are acting subject to the approval of [the Organization’s Council].
- [The Conference] will entail no personal costs upon the organizers, nor will any financial benefit result to the organizers personally. [The Conference] is expected to make a profit, which is to be returned to [the Organization], as described in section […].
- No money may be paid or expenditure promised without the explicit authority of [the Organization’s] treasurer, except that the treasurer may delegate authority to the local organizers to spend part of [the Conference] budget without reference to her/him.
- All records of moneys received by [the Conference] and paid out by [the Conference] must be fully open and subject to independent audit if called for at any stage.
6. The 2018 [Conference] is the first to be held in Canada. [The Conference] website provides the following additional details regarding the event:
- […][Description of the content of the Conference].
- The following areas will be represented in the scientific program of [the Conference]: […]
- Registration fees (in US$) will range, depending on when an individual registers for [the Conference], from $[…] to $[…] for members of [the Organization] and its affiliated societies, or $[…] to $[…] for non-members. Additional rates are also available for students, as well as guests of other attendees.
7. In your submission, you also made the following statements on [the Organization’s] behalf:
- [The Conference] consists of lectures, exhibitions, and symposia that are very technical in nature and intended for […] professionals.
- The purpose of [the Conference] is not to:
- provide any type of amusement, entertainment or recreation,
- conduct contests or games of chance, or
- transact the business of the convenor or attendees in the course of a trade show that is open to the general public, or otherwise than in the course of a trade show.
- [The Organization] will supply admissions for the 2018 [Conference] to attendees and spaces to exhibitors authorized to promote their products at [the Conference]. Approximately [#] attendees are expected for [the Conference]. The previous [Conference] was held in [yyyy] in [Country X], where 23% of attendees were [Country X] residents. Further, only [#] of [the Organization’s] [#] total members are residents of Canada. It is therefore reasonably expected that at least 75% of the paid admissions to the 2018 [Conference] will be supplied to non-residents of Canada.
RULING REQUESTED
Is the 2018 [Conference] a foreign convention for GST/HST purposes?
RULING GIVEN
Based on the facts set out above, we rule that the 2018 [Conference] is a foreign convention for GST/HST purposes.
Please note that sponsors must maintain documents supporting their calculation of the percentage of admissions that are reasonably expected to be supplied to non-residents in order to prove that a convention is a foreign convention, and make these documents available to the Canada Revenue Agency (CRA) on request. Under subsection 286(1), these documents must be kept in Canada unless the sponsor gets permission from the CRA to maintain them outside Canada.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the CRA is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call Graham Leflar, Rulings Officer, directly at 306-975-4733. 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,
Geoff Macmillan
Manager
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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