Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
February 26, 2010
Case Number: 121617
Business Number: XXXXX
Attention: XXXXX
XXXXX
Dear XXXXX:
Subject:
GST/HST INTERPRETATION
Transitional rules for the HST in British Columbia - Supplies of admissions
Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transitional rules for the HST in British Columbia to supplies of admissions. XXXXX has forwarded your letter to the Services and Intangibles Unit for reply. We apologize for the delay in responding to you.
The Government of Canada and the Government of British Columbia have signed a Comprehensive Integrated Tax Coordination Agreement for the implementation of HST in British Columbia. The HST is proposed to come into effect in British Columbia on July 1, 2010, at a rate of 12%, consisting of a 5% federal part (equivalent to the existing GST) and a 7% provincial part.
Legislation required to implement the HST in British Columbia has received Royal Assent by the Parliament of Canada. Required provincial legislation has been introduced but is still under consideration by the Legislative Assembly of British Columbia. However, many of the rules which would apply to transactions will be contained in regulations made under the Excise Tax Act (ETA). Although the Government of British Columbia has announced details of the rules which may eventually apply, the required regulations have not yet been made by the Government of Canada.
The following interpretation is based on the transitional rules as announced in HST Notice # 1, General Transitional Rules for British Columbia HST (the Notice), released by the Government of British Columbia on October 14, 2009. This interpretation should not be taken as a statement by the Canada Revenue Agency (CRA) that these transitional rules will be made in their current form.
We understand from your letter and your Website that:
• The XXXXX (the Association) is registered for GST/HST purposes and is a resident of British Columbia. It supplies admission tickets (the Admission Tickets) to its live shows (the Performances).
• The Association will make advanced sales of a series of Admission Tickets to its subscribers who will attend the Performances for the 2010/2011 season.
• All of the Performances for the 2010/2011 season will be held after June 2010.
• The subscribers will pay for the Admission Tickets from February XXXXX, 2010 to April XXXXX, 2010 for admissions to the Performances. Subscribers may renew their subscriptions for the 2010/2011 season on line and have the option of making installment payments.
• Starting on August XXXXX, 2010, the Admission Tickets will go on sale to persons who will attend a single Performance.
Interpretation Requested
You would like to know how the GST/HST transitional rules will apply to supplies of Admission Tickets to the Performances.
Also, you would like to know if the answer to Question 15.3 in GST/HST Notice No. 247, Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers on General Transitional Rules, will apply to the Admission Tickets supplied by the Association to its subscribers.
Interpretation Given
Transitional rules for admissions under the proposed HST:
Under the proposed HST, admissions (intangible personal property) will have special transitional rules. The HST would generally apply to any consideration for a supply of an admission to a place of amusement, a seminar, an event or an activity (hereafter referred to as an event or activity) that becomes due, or is paid without having become due, on or after May 1, 2010 to the extent that the consideration relates to the part of the event or activity that occurs on or after July 1, 2010. However, the HST would not apply to the consideration for a supply of an admission if 90% or more of the event or activity to which the admission relates occurs before July 2010.
An amount (or portion of an amount) for a supply of intangible personal property becomes due on the earliest of the following days:
• the date of an invoice for that amount for the supply;
• the day the supplier first issues the invoice for the amount,
• if there is an undue delay in issuing the invoice, the day the supplier would have issued the invoice; and
• the day the client is required to pay the amount under a written agreement.
An amount (or portion of an amount) is paid without having become due when a client pays an amount due for a supply:
• before the date of an invoice, or before a supplier issues, or would have issued, the invoice; or
• before the client is required to pay the amount under a written agreement and no invoice has been issued.
Sometimes, more than one amount becomes due or is paid without having become due. This could happen when a supplier issues more than one invoice or when the client is required to make more than one payment under a written agreement. In this case, for each amount, the supplier must determine whether GST or HST applies.
When more than 10% of the event to which an admission to an event takes place on or after July 1, 2010, the following transitional rules would apply:
• Regardless of when the event takes place, GST applies to any amount that becomes due or is paid without having become due on or before October 14, 2009.
• Regardless of when the event takes place, GST applies to any amount that becomes due or is paid without having become due after October 14, 2009, and before May 2010.
• When an amount becomes due or is paid without having become due on or after May 1, 2010:
• GST applies to any amount that relates to the portion of the event that is before July 2010; and
• HST applies to any amount that relates to the portion of the event that is on or after July 1, 2010.
You can obtain further information from GST/HST Info Sheet GI-058, Ontario and British Columbia: Transition to the Harmonized Sales Tax - Admissions.
Supplies of Admission Tickets to a series of Performances:
When an amount (or portion of an amount) becomes due or is paid without having become due after October 14, 2009, and before May 2010, the Association will charge its subscribers the GST on its supplies of a series of Admission Tickets to the Performances held on or after July 1, 2010. The Association will account for the tax in its net tax calculation in its GST/HST return according to the normal rules.
When a subscriber makes instalment payments to purchase a series of Admission Tickets, the Association will consider each payment separately to determine whether GST or HST will apply to the amount due or paid without having become due.
Note that the answer to Question 15.3 (i.e., the first paragraph of the answer), in GST/HST Notice No. 247, would apply to the Association's supplies to its subscribers of Admission Tickets to a series of Performances.
Supplies of Admission Tickets to a single Performance:
When an amount becomes due or is paid without having become due on or after July 1, 2010, the Association will charge its customers the HST on a supply of an Admission Ticket to a Performance held after July 1, 2010. The Association will account for the tax in its net tax calculation in its GST/HST return according to the normal rules.
The CRA's publications (i.e., GST/HST Notice No. 247 and GST/HST Info Sheet GI-058) are available at the CRA Web site at:http://www.cra-arc.gc.ca/formspubs/typ/menu-eng.html
The Notice issued by the British Columbia Government is available at:http://www.sbr.gov.bc.ca/business.html.
The foregoing comments represent our general views with respect to the transitional rules as announced in the Notice, released by the Government of British Columbia on October 14, 2009, as they relate to the subject matter of your request. Any change to the wording of these transitional rules or any regulations regarding the HST in British Columbia, if made, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the CRA with respect to a particular situation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-9700. 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,
Michèle Routhier
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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