Subsection 143(1) - Supply by Non-Resident
See Also
MELP Enterprises Ltd. v. The King, 2024 TCC 130
MELP was found to be performing its services to Canadian patients who underwent bariatric surgery at the surgical unit in Mexico of a Mexican company (“LIMARP”) as agent for LIMARP given that their conduct implied an agency arrangement.
However, its own fees (collected by deduction from the fees collected by it from the patients before remittance to LIMARP) were not zero-rated under s. VI-V-5 given that that the services which MELP performed on behalf of LIMARP (including a wide range of various pre-operation and post-operation services) were in significant part performed in Canada. Thus, services performed by LIMARP through its agent were performed in part in Canada, so that their place of supply was deemed under s. 142(1)(g) to be in Canada, contrary to the requirements of s. VI-V-5(b) that the zero-rated agency services be in respect of supplies made outside Canada (and, for similar reasons, neither s. 142(2)(g) or 143 deemed their place of supply to be outside Canada.) Regarding s. 143, Sommerfeldt J stated (at para. 103) that “LIMARP, by reason of its agent’s activities, was carrying on business in Canada.”
Sommerfeldt J noted (at para. 91) that “[w]hile subsection 142(1) is subject to section 143, subsection 142(2) is not” and in this regard, quoted Paradigm Ventures:
If a supply is deemed to be outside Canada under subsection 142(2), it does not lose the benefit of that provision just because it is not deemed to be outside of Canada under section 143[,] and if a supply is deemed to be outside Canada under section 143, it does not lose the benefit of that provision just because it is not deemed to be outside of Canada under subsection 142(2).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 306 | an appeal of 12 assessments that is joined under Rule 25 retains its character as an appeal of 12 assessments | 194 |
| Tax Topics - General Concepts - Agency | agency implied on the basis of conduct/ acts of agent were those of principal | 173 |
| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - Section 5 | a Canadian agent’s services were not zero-rated since they were partly performed in Canada | 258 |
| Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Institutional Health Care Service | services provided by Canadian agent on behalf of a Mexican hospital were not exempted under V‑II‑2 because they were performed in part out of its (non-hospital) Canadian facilities | 122 |
| Tax Topics - Excise Tax Act - Section 142 - Subsection 142(1) - Paragraph 142(1)(g) | services performed by Mexican hospital were partly performed in Canada by virtue of its Canadian agent, so that their place of supply under s. 142(1)(g) was in Canada | 147 |
Administrative Policy
"GST/HST In Electronic Commerce", CCRA Discussion Paper, November 2001.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - Section 7 | 0 |
GST M 300-5 "Place of Supply" under "Supply Made by a Non-Resident"
A non-resident person who gives seminars in Canada and charges a fee directly to each participant is required to collect an account for GST.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 143 - Subsection 143(2) | 45 |
GST M 200-1-1 "Carrying on Business in Canada"
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business | 0 |
Policy Statement P-051R2 "Carrying on Business in Canada" 29 April 2005
In leasing transactions, the most important factors generally are where the lessor acquires the property and it is delivered to the lessee.
- Example 2: equipment is leased and delivered outside Canada and then imported by the lessee, who is responsible for maintaining the equipment and makes payments to the lessor in Canada who has a Canadian bank account but otherwise not much Canadian presence - lessor is not carrying on business in Canada.
- Example 3: the lease agreement is concluded in Canada and equipment delivered to lessee at its Canadian facility. Payments are made in Canada to the lessor who has a Canadian bank account but otherwise does not have much presence in Canada - lessor is carrying on business in Canada.
- Example 6: lessor is carrying on business in Canada by virtue of a net lease of Canadian real estate.
In services contracts, the the location of performance of the services is important. Isolated transactions in Canada may not result in carrying on business in Canada (e.g., Example 18 - one employee week in Canada).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 240 - Subsection 240(1) | 447 |
Subsection 143(2)
Administrative Policy
GST M 300-5 "Place of Supply" under "Supply Made by a Non-Resident"
The combined effect of ss.143(2) and 240(4) is to ensure that imports are placed on an equal footing with domestic goods. For example, foreign publishers are required to account for GST on their subscription sales in Canada on the same basis as domestic publishers.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 143 - Subsection 143(1) | 26 |