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: 109682
Business Number: [...]
March 11, 2011
Dear [Client]:
Subject:
GST/HST RULING
Rate of Public Service Body Rebate
Thank you for your fax of October 29th, 2008, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the [...] [(Professional Organization)]. We apologize for our 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
1. The [Professional Organization] was incorporated [...] by an Act of Parliament (the "[...] Act").
2. The Act mandated the [Professional Organization] to [...].
3. The [Professional Organization] describes its current mandate to be: [...]
4. The [Professional Organization] sets standards for [...].
5. In fulfilling its mandate the [Professional Organization] uses an examination process [...].
6. [...]
7. Upon achieving a satisfactory result on the examination, the [...] receives a certificate [...].
8. The [Professional Organization] is not a recognized school [...] and is not responsible for providing basic [...] education in Canada.
9. The [Professional Organization] does not licence individuals to [...] in any province or territory.
10. The [Professional Organization] does not govern and/or regulate the [...] in each province. This role is fulfilled by [...].
11. The [Professional Organization] is a registered charity under the s. 248(1) of the Income Tax Act.
12. The [Professional Organization] currently qualifies for the Public Service Body Rebate at the rate prescribed for registered charities.
13. The [Professional Organization] does not meet the definition of a public college as that term is used in the ETA.
14. No level of government recognizes the [Professional Organization] as a university or as an institution which grants degrees at the equivalent of a bachelor or higher level.
15. The [Professional Organization] does not have an agreement with any university such that the university agrees to grant degrees [...] in exchange for a certain degree of control over the academic standards and course offerings of the [Professional Organization].
Ruling Requested
You would like to know if the [Professional Organization] would qualify as a "university" as that term is used in the ETA and thereby qualify for a Public Service Body Rebate at the rate prescribed for universities.
Ruling Given
Based on the facts set out above, we rule that the [Professional Organization] is not a "university" as that term is used in the ETA and does not qualify for the Public Service Body Rebate at the rate prescribed for universities. It will continue to qualify for the Public Service Body Rebate at the rate prescribed for a charity, so long as it remains a "registered charity" under the Income Tax Act.
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
The [Professional Organization] does not meet the definition of "university" which is set out in the ETA.
S. 123(1) of the ETA defines "university" as follows:
"university" means a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution;
Policy P-220 "Domestic entities that qualify as a "university" in the Excise Tax Act" states that the following entities qualify as a university:
The term "university" is defined in subsection 123(1) of the ETA as "a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution". The Department's position is that there are three categories of domestic entities that will qualify as a university. Those three categories are:
1. a degree-granting institution that grants degrees at least at the bachelor or equivalent level that is established as a university or degree-granting institution by legislation enacted by the appropriate Canadian jurisdiction in which it is situated, or
2. any organization that operates a college affiliated with an institution in #1. An organization is considered to operate an affiliated college of a university or degree-granting institution (the "parent") only where there is a formal affiliation agreement between the parent and the affiliate wherein the parent agrees to grant degrees to graduates of the affiliated college in exchange for a certain degree of control over the academic standards and course offerings of the affiliated college; or
3. a research body of an organization in #1. In order for an entity to be considered a research body of a university or degree-granting institution, the entity must be established and operated primarily to perform research and the research body must be owned and controlled by a university or degree-granting institution.
(1) Recognized Degree Granting Institution.
A recognized degree granting institution is an institution that grants degrees and meets the accreditation requirements for degree granting institutions in the country where it is based. Therefore, a resident university would have to meet the requirements of the provincial legislation where it is based.
The ability to grant degrees is, in and of itself, insufficient to satisfy this requirement in subsection 123(1) of the ETA. To be considered a "university" for ETA purposes, an institution must offer programs of study for which degrees are granted upon completion of that program.
The purpose of the [Professional Organization] is to create and maintain a process which certifies qualified members [...]. Upon successful completion of a [Professional Organization] examination, the candidate receives a [...] certification in an area [...] which was tested.
While the [Professional Organization] certification is recognized as attesting to [...], the organization does not grant any degree or other certification which connotes completion of a course of study at the equivalent of a bachelor or higher degree. Further, no level of government recognizes the [Professional Organization] as a university in any applicable statutes or regulations. The [Professional Organization] is not a recognized degree granting institution.
(2) Operates a College Affiliated with a Degree Granting Institution.
Affiliated institutions may have names that use the words "college", "institute" or "school". Not all organizations that are named colleges are affiliated with degree granting institutions.
An affiliated institution is responsible for its own administration, but does not have the power to grant degrees. Rather it is affiliated with a university which grants degrees on its behalf. The relationship between the affiliate and the university must be such that the university agrees to grant degrees to the graduates of the affiliate in exchange for a certain degree of control over the academic standards and course offerings of that affiliate.
Whether or not an organization is affiliated with a university is a matter of fact that can be proven by the existence of a formal agreement which creates the affiliation relationship described above. The [Professional Organization] has no such affiliation agreements with any degree granting institutions.
(3) A Research Body of a Degree Granting Institution.
To qualify as a research body of a university, an organization must be established and operated primarily to perform research; and must be either
(i) owned exclusively by a university; or
(ii) engaged in performing research exclusively for a university.
The [Professional Organization] was incorporated by an Act of Parliament and continues to be a self-governing body. It is not owned or controlled by a university.
While the [Professional Organization] engages in research designed to enhance the education and training [...], the [Professional Organization] was not established and is not now operated primarily to perform research on behalf of a university. The [Professional Organization] was established and continues to be operated primarily to create a nation-wide standardization protocol [...]. The research the [Professional Organization] performs furthers and refines its own activities. While some of its research may benefit [...], this research is not performed at the behest of, nor for the exclusive benefit of any particular university.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-0329. 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,
Michael Mavis
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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