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XXXXX
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June 29, 1998
XXXXX
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This is in response to the e-mail dated January 7, 1998, sent by XXXXX requesting our comments on the tax status of the (programs and courses offered by the) XXXXX[.]
I understand that:
• the XXXXX, whose head office is located in XXXXX, is incorporated under the laws of the State of XXXXX[;]
• all marketing, sales and conclusion of contracts are performed at the XXXXX head office in XXXXX provides environmental programs and education courses to students and teachers, who are resident in XXXXX[;]
• the programs and courses, of XXXXX duration, offered only to residents of XXXXX, are given at XXXXX on XXXXX New Brunswick;
• the XXXXX leases property on XXXXX during the summer months and arranges for local Canadian marine biologists to be guides and hosts;
• included in the price of the program and courses, is a round trip airfare from XXXXX, accommodation in XXXXX to observe whales;
• the adventure camps for youths under 19 are similar, with the addition of kayaking, sailing, and camping activities with a marine theme.
There are a number of considerations in this case:
1. Can the program, which includes accommodation at bed and breakfast establishments, be classified as a tour package?
A tour package, as defined in subsection 163(3) of the Excise Tax Act ("the Act"), means a combination of two or more services, of property and services, that includes transportation services, accommodation, a right to use a campground or trailer park, or guide or interpreter services, where the property and services are supplied together for an all-inclusive price. The XXXXX offering a combination of two or more services, is therefore, considered to be a tour package by definition.
Each person who registers for the XXXXX may be entitled to a rebate on the tax paid on the short term accommodation. This entitlement is a consequence of saying that the XXXXX offers a tour package.
2. Is the XXXXX making a taxable supply of an admission to a seminar, in which case the XXXXX should be registered for purposes the GST/HST pursuant to subsection 240(2) of the Act?
Due to the fact that we have already determined that the XXXXX is offering a tour package, it is not necessary to respond to this question.
3. Is the XXXXX carrying on business in Canada?
Policy Number P-051, Carrying on Business in Canada, provides a number of criteria as follows for determining whether a non-resident person is carrying on business in Canada:
1. the place where the contract is made;
2. the place where the operations from which profits arise take place; and
3. other factors.
From the information submitted, it is evident that the XXXXX is not carrying on business in Canada. All marketing sales and conclusion of contracts for services are conducted at the head office of the XXXXX in XXXXX[.] Although the profits arise from the operations carried on in Canada, there are enough other factors (as listed in P-051), to indicate that the XXXXX is not carrying on business in Canada. For example, advertising for the programs are made from the head office and, all payments for the programs are made directly to the head office in XXXXX[.]
Furthermore, all contracts with the teachers are concluded in XXXXX and payment is made from that head office.
In view of the fact that the XXXXX does not carry on business in Canada, there is no need to determine if it has a permanent establishment in Canada, since there are no GST implications in making that determination.
Response
Based on the above information, it is the Department's position that the XXXXX is providing a tour package as defined in subsection 163(3) of the Act. XXXXX is not carrying on business in Canada nor is it entering Canada for the purpose of making taxable supplies of admissions to a seminar pursuant to subsection 240(2) of the Act.
If you have any questions or require additional information, please contact me at (613) 954-5124.
Cheryl R. Leyton
Services and Intangibles Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate
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