CRA declines to provide guidance on whether hosting advertising on a non-resident website entails the performance of any service in Canada

A non-resident supplies digital products or services though digital platforms and websites and also sells advertising on its website through a Canadian agent.

If the non-resident was registered under the regular GST/HST registration regime, then it would be required to charge GST/HST if it was making supplies in Canada. In the case of the advertising service, CRA simply noted, without more, that pursuant to ETA s. 142(1)(g), a “supply of a service is deemed to be made in Canada where the service is, or is to be, performed in whole or in part in Canada” – perhaps recognizing that the non-resident might not be regarded as “performing” any services in Canada through its website. On the other hand, regarding any supply of copyright or other intangible personal property (IPP), CRA noted that s.142(1)(c) provides that a supply of IPP is deemed to be made in Canada if the property may be used in whole or in part in Canada, and stated that the “expression ‘may be used’ is interpreted to mean ‘allowed to be used’ – so that “a supply of IPP could be considered to be made in Canada even if it is not actually used in Canada.” Thus, the IPP supply generally would be made in Canada.

If the non-resident instead was a specified non-resident supplier registered under the simplified GST/HST registration regime, a supply made by it to a specified Canadian recipient (i.e., generally, a non-registrant with a Canadian address), would be deemed to be made in Canada pursuant to s. 211.14 (irrespective of the place-of-supply rules in s. 142) so that such supply would generally be taxable under s. 165.

Neal Armstrong. Summaries of 19 December 2023 GST/HST Interpretation 230511 under ETA s. 142(1)(g). s. 142(1)(c) and s. 211.14(1).