General Rules
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General Rules
Generally, there are four general place of supply rules that apply to supplies of services. These general rules do not apply to supplies of services in certain cases where specific place of supply rules apply.
Rule 1
The supply of a service is made in a province and in the normal course of business, the supplier obtains a particular address of the recipient that is:
- a home or business address in Canada of the recipient;
- where the supplier obtains more than one home or business address in Canada of the recipient, the home or business address that is most closely connected with the supply; or
- where the supplier does not obtain a home or business address in Canada of the recipient, another Canadian address of the recipient that is most closely connected with the supply, the supply will be regarded as made in the province in which the particular address is situated.
Example
A supplier in Quebec agrees to design the Web site of a company in Ontario. The service is performed entirely in Quebec. The business address of the recipient obtained by the supplier is in Ontario. Since the business address of the recipient is in Ontario, the supply of the service is made in Ontario and HST will apply at a rate of 13%.
Rule 2
If Rule 1 does not consider the supply of the service to be made in a province and the Canadian element of the service is performed primarily (more than 50%) in the participating provinces, the supply is to be considered made in the participating province in which the greatest proportion of the Canadian element of the service that is performed in the participating provinces is performed.
Example
An online service provider located in Ontario that specializes in the provision of document editing and translation services, provides these services to clients electronically over the Internet. The clients send electronic versions of documents by e-mail to the e-mail address of the service provider to be edited or translated with the resulting edited or translated documents returned to the clients by sending the documents to the e-mail addresses of the clients. The services are performed by employees of the service provider from its business address in Ontario. The service provider does not obtain an address of its clients.
The Canadian element of the service is performed primarily in the participating provinces and the participating province in which the greatest proportion of the Canadian element of the service is performed is Ontario. The supply is therefore made in Ontario and HST will apply at a rate of 13%.
Rule 3
If Rule 2 does not consider the supply of a service to be made in a participating province because the service is performed equally in two or more participating provinces, the service is to be considered to be supplied in the participating province among those provinces that has the highest rate for the provincial part of the HST. If two or more of the participating provinces in this case have the same rate for the provincial part, HST is required to be charged by the supplier using that particular rate.
Rule 4
If Rule 1 does not consider the supply of the service to be made in a province and the Canadian element of the service is performed otherwise than primarily (50% or less) in the participating provinces, the supply is made in a non-participating province.
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- Date modified:
- 2013-04-12