5 July 2007 GST/HST Ruling 65377 - XXXXX

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.

Dear XXXXX:

Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the affairs of the XXXXX (the Corporation)

Statement of Facts

We understand that:

1. The Corporation was incorporated without share capital XXXXX.

2. The Corporation is not registered for purposes of the GST/HST.

3. XXXXX,

XXXXX.

4. XXXXX,

XXXXX.

5. XXXXX,

XXXXX.

XXXXX.

6. XXXXX,

XXXXX.

7. XXXXX,

XXXXX.

8. XXXXX,

XXXXX.

XXXXX.

XXXXX.

XXXXX.

Ruling Requested

You would like to know if the Corporation would be considered to be a non-profit organization as defined in subsection 123(1) of the ETA.

Ruling Given

Based on the facts set out above, we rule that the Corporation is considered to be a person organized solely for a purpose other than profit, with no part of its income payable to or otherwise available for the personal benefit of any member, and if it in fact operates for a purpose other than profit it would qualify as an NPO under subsection 123(1) of the ETA.

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

A "non-profit organization" is defined in subsection 123(1) of the ETA to be a "person (other than an individual, an estate, a trust, a charity, a public institution, a municipality or a government) that was organized and is operated solely for a purpose other than profit, no part of the income of which is payable to, or otherwise available for the personal benefit of, any proprietor, member or shareholder thereof unless the proprietor, member or shareholder is a club, a society or an association the primary purpose and function of which is the promotion of amateur athletics in Canada."

As indicated in GST/HST Policy Statement P-215, Determination of Whether an Entity is a "Non-Profit Organization" for Purpose of the Excise Tax Act ("ETA"), we look at the governing documents to determine whether an entity was organized solely for a purpose other than profit. Entities organized solely for a non-commercial public purpose will be considered organized for non-profit purposes. The governing documents of the Corporation indicate that it was established solely for a purpose other than profit.

The determination of whether an entity is operated solely for non-profit purposes is a question of fact at any given time. Therefore any determination of whether an entity is a non-profit organization for purposes of the ETA is specific to the time the determination is made.

The governing documents state that upon dissolution of the Corporation and after payment of all its debts and liabilities, all remaining property shall be distributed or disposed of to organizations in the Province, the undertaking of which is charitable or beneficial to the community.

It is our view that the Corporation currently meets the three criteria listed in P-215 and therefore would qualify as a non-profit organization for purposes of the ETA.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-0329.

Yours truly,

Trent MacDonald
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

2007/07/10 — RITS 79146 — Application of GST to Lease and Sub-Lease Agreements