Section 139 - Financial Services in Mixed Supply

Administrative Policy

8 February 2002 Headquarters Letter 37008 (See also 9 January 2002 Headquarters Letter 37015)

"As a result of an extensive review of the industry, it is our finding that most of the securitization agreements contemplate a separate fee for servicing which is clearly distinguishable from the purchase price of sold mortgages. Therefore, where there is a consideration for the sale of a mortgage and a separate consideration for mortgage servicing, sections 138 and 139 of the ETA are not available to characterize the tax status of any servicing fee."

14 May 1999 Headquarters Letter HQR 0001500

Fees received for distributed mutual fund units were consideration for a single supply notwithstanding that customer services also were provided.

Guide for Providers of Financial Services under "Mixed Supplies of Property and Services"

Where the value of each property or service is not identified separately on an invoice for a mixed or bundled supply, the registrant will be required to determine the principal nature of the supply. When a financial service constitutes less than 50% of the bundled supply, the consideration should be apportioned reasonably.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 138 45


J. Spencer, "GST and PST Implications of Outsourcing Corporate Services", Sales and Use Tax, Vol. IV, No. 1, 1998, p. 182.