GST/HST Memorandum 3-3-4
August 2024

This memorandum cancels and replaces, in part, Draft GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of supply rules for determining whether a supply is made in a province.

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Tax Act (ETA). The information in this publication does not replace the law found in the ETA and its regulations.

If this information does not completely address your particular situation, you may wish to refer to the ETA or relevant regulation, or call GST/HST Rulings at 1‑800‑959‑8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.

If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1‑800‑567‑4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.

For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1‑855‑666‑5166.

GST/HST rates

Reference in this publication is made to supplies that are subject to the GST or the HST. The HST applies in the participating provinces at the following rates: 13% in Ontario and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.

Table of Contents

• General
• Supply of real property
  • Deemed supply of real property
  • Supply of real property partly in a province
  • Lease intervals – deemed supplies of real property
• First Nations goods and services tax – place of supply
  • Supply is deemed to be made on FNGST lands in a non-participating province
  • Supply is deemed to be made on FNGST lands in a participating province
  • Supply is deemed to be made in Canada, but not on FNGST lands

General

1. Taxable supplies of property or services that are made in Canada are generally subject to the GST (the federal part of the HST) under subsection 165(1) at the rate of 5%. In addition, taxable supplies that are made in a participating province are subject to the provincial part of the HST under subsection 165(2) at the provincial rate for that province, which results in the application of the HST at the relevant harmonized rate.

2. In the case of a taxable supply that is made in Canada, it is necessary to determine the province where the supply is made in order to apply the applicable tax and rate. Provincial place of supply rules exist for GST/HST purposes to determine the province in which a supply is deemed to be made.

3. Generally, the place of supply rules described in Chapter 3 of the GST/HST Memoranda Series are also used to determine if the First Nations goods and services tax (FNGST) applies to supplies where a First Nation or an Indigenous government has imposed the FNGST. For more information, refer to paragraphs 16 to 22 of this memorandum.

4. For further information regarding the legislative framework as well as the factors to consider before applying the provincial place of supply rules, refer to GST/HST Memorandum 3-3-2, Provincial Place of Supply – Overview.

5. Unless otherwise indicated, all references in this memorandum to supplies are to taxable (other than zero-rated) supplies made in Canada.

6. References in this memorandum to terms, concepts and examples are made in the context of the provincial place of supply rules for persons registered under Subdivision D of Division V of Part IX of the ETA (the regular GST/HST regime).

7. The Canada Revenue Agency (CRA) generally does not administer provincial taxes, duties or fees imposed by provincial legislation, other than the QST for persons that are selected listed financial institutions (SLFIs) for GST/HST or QST purposes or both. To determine whether any provincial taxes, duties or fees are applicable in respect of a supply (for example, the QST in Quebec for persons that are not SLFIs), contact the appropriate provincial taxation authority.

8. Real property as defined in subsection 123(1) “includes

(a) in respect of property in the Province of Quebec, immovable property and every lease thereof,

(b) in respect of property in any other place in Canada, messuages, lands and tenements of every nature and description and every estate or interest in real property, whether legal or equitable, and

(c) a mobile home, a floating home and any leasehold or proprietary interest therein”.

9. For the purposes of the provincial place of supply rules, section 2 of Part I of Schedule IX deems a floating home and a mobile home that is not affixed to land to be tangible personal property and not real property.

10. For more information about real property, refer to GST/HST Memorandum 19-1, Real Property and the GST/HST.

Supply of real property

11. Under section 1 of Part IV of Schedule IX, a supply of real property is made in a province if the property is situated in the province.

Deemed supply of real property

12. Subsection 136(1) deems a supply, by way of lease, licence or similar arrangement, of the use or right to use real property to be a supply of real property.

Supply of real property partly in a province

13. When determining if a taxable supply of real property is made in a participating province, a deeming rule applies if the supply of real property includes the provision of real property that is partly situated in the participating province and partly in one or more other provinces or outside Canada.

14. Under section 136.2, the provision of the part of the real property that is situated in the particular participating province and the provision of the part of the real property that is situated in another province or outside Canada are each deemed to be a separate taxable supply made for separate consideration equal to the portion of the total consideration for all the property that is reasonably attributable to each part of the real property. As a result, it is only the provision of the part of the real property that is situated in the participating provinces that is subject to the HST.

Lease intervals – deemed supplies of real property

15. Under subsection 136.1(1), where a supply of property is made by way of lease, licence or similar arrangement for consideration that is attributable to a period (referred to as a lease interval) that is the whole or a part of the period during which possession or use of the property is provided under the arrangement, a separate supply of the property for separate consideration is deemed to be made by the supplier and received by the recipient for each lease interval. The supply for each lease interval is deemed to be made on the earliest of the following days:

• the first day of the lease interval
• the day on which the lease payment attributable to that interval becomes due
• the day on which the lease payment attributable to that interval is paid

First Nations goods and services tax – place of supply

16. The FNGST is a tax that may be imposed by a band council, other governing body of a First Nation or an Indigenous government on the lands that it governs. The FNGST at the rate of 5% applies to most supplies of property and services made on these lands.

17. Everyone has to pay the FNGST on the supply of property and services made on lands where the FNGST applies including Indians, Indian bands, or band-empowered entities. However, certain provincial and territorial governments do not pay the FNGST. The CRA uses the term Indian in this memorandum because it has legal meaning under the Indian Act.

18. For more information on the FNGST and the First Nations and Indigenous governments that impose the FNGST, go to First Nations Goods and Services Tax. You may also refer to GST/HST Technical Information Bulletin B-102, First Nations Goods and Services Tax – Place of Supply.

Supply is deemed to be made on FNGST lands in a non-participating province

19. The FNGST replaces the GST where the provincial place of supply rules deem the supply to be made on the lands where an FNGST is imposed and where those lands are located in a non-participating province. The supply is subject to the FNGST at the rate of 5%.

Supply is deemed to be made on FNGST lands in a participating province

20. The FNGST replaces the federal part of the HST where the provincial place of supply rules deem the supply to be made on the lands where an FNGST is imposed and where those lands are located in a participating province. The supply is subject to the FNGST at the rate of 5%.

21. Provided the purchaser meets the criteria set out in GST/HST Technical Information Bulletin B-039, GST/HST Administrative Policy – Application of the GST/HST to Indians, the provincial part of the HST would be relieved. Where the purchaser does not qualify for relief of the provincial part of the HST under Technical Information Bulletin B-039, registered vendors are required to collect the provincial part of the HST in participating provinces unless relief of that part is provided by some other legislation or policy.

Supply is deemed to be made in Canada, but not on FNGST lands

22. Where the provincial place of supply rules deem the supply to not have been made on FNGST lands, and the supply is made in Canada, then either the GST or the HST will apply depending on whether or not the supply is deemed to be made in a participating province.

Further information