IPP that relates to services
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Place of Supply – IPP relating to passenger transportation services
Generally, GST/HST applies at the rate for the province where the passenger transportation service originates.
An example of an intangible personal property (IPP) that relates to a passenger transportation service is a rail pass that can be used for multiple trips.
If the passenger transportation pass specified the origin of the trip, the supply is made in that province.
If the origin is not specified, but it is clear that the trip could only begin in a particular province, the supply is made in that province.
Exception
If the pass specifies that the trip would terminate outside Canada, but inside the taxation area (which includes the islands of St.Pierre and Miquelon and the Untied States, except for Hawaii), GST applies at the rate of 5% to the supply, regardless of where in Canada the trip originates.
Example
You buy a rail pass for ten one-way trips between Ottawa and Toronto. The rail pass is IPP (a right) that allows you to receive passenger transportation services that can only be used for travel in Ontario. Under the place of supply rules for passenger transportation services, the service would be considered to be made in a single province (Ontario). Therefore, the supply of IPP that relates to your passenger transportation service is considered to be made in Ontario and HST applies at the rate of 13%.
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- Date modified:
- 2016-07-07