tourist gst refund canada

GST/HST Rebate on Commercial Goods and Artistic Works Exported By Non-Residents

Are you a non-resident who recently paid the goods and services tax (gst) and/or the harmonized sales tax (hst) on goods purchased in canada but exported for commercial purposes outside the country have you, as a non-resident and non-registrant, paid the gst/hst on canadian property or services obtained for the sole purpose of creating specific artistic works for export if either case applies to you, here's some good news , under the canada revenue agency's "commercial goods and artistic works exported by a non-resident (subsection 252(1) and 252(2))" clause, you could be entitled to a gst/hst tax refund. .

To claim your GST/HST rebate, use the following application form: GST189 General Application for Rebate of GST/HST.

Eligibility Conditions - Exported Commercial Goods

Be a non-Canadian resident
Spend a minimum of $200 Canadian before applicable taxes (provided by receipts, invoices) on goods acquired in Canada for use outside the country
Have paid the GST/HST tax for said goods
Not be a consumer of said goods
Have exported the goods from Canada within a 60-day period following delivery
Beer, wine, liquor and other alcohol-based products
Tobacco products
Certain gas and diesel fuel products

Eligibility Conditions - Exported Artistic Works

Not be a GST/HST registrant
Spend a minimum of $200 Canadian on eligible taxable purchases (provided by receipts, invoices)
Have paid the GST/HST on property (e.g.: copyright, patent, trademark) or services (except those involving product storage and shipping) you obtained for the exclusive purpose of creating an original musical, artistic, literary, cinematic work, or other creative medium protected by copyright law
Not be a consumer of said property or services
Be creating the work and all reproductions of the work for exportation purposes only

Filing your rebate application

For GST/HST rebates on exported commercial goods , you must file your rebate application within 1 year from the date you exported the items.

For GST/HST rebates on supplies related to exported artistic works , you must file your rebate application within 1 year from the date the tax was made payable on your purchase(s).

For detailed information on tour package rebates: visit GST/HST rebate for tour packages.

Foreign Convention and Non-Resident Exhibitor Rebates

Don't forget your application form!

Along with your completed, signed and dated application, be sure to include copies of receipts or invoices for all recorded purchases (unless you are appointing your supplier as the recipient of the rebate).

For more information on eligible GST/HST rebates: visit the General GST/HST rebate application website.

Tourists can no longer get Canada tax refund

Trips to Canada have become more expensive for many visitors after the Canadian government recently abolished a tax refund for non-residents...

Trips to Canada have become more expensive for many visitors after the Canadian government recently abolished a tax refund for non-residents.

Visitors had been able to claim a refund of the 6 percent GST, a federal tax on lodging and other goods and services. For tourists, the most significant benefit was being able to get a refund of the GST on hotel bills, effectively taking 6 percent off the price.

The Canadian government abolished the GST refund (formally called the Visitor Rebate Program) for individual travelers earlier this month as part of 2007 budget cuts. After protests from the tourism industry, however, both in Canada and abroad, a new rebate program will give GST refunds to convention organizers and individuals purchasing a tour package. However, travelers who book hotels on their own, for example, for a weekend stay in Vancouver, B.C., or Victoria, will no longer be able to get the GST refunded.

The Canadian government estimated it would save about $70 million in refunds and administrative costs by abolishing the rebates, and said only a small proportion of visitors ever bothered to claim the GST refund.

GST/HST Refund to Non-Residents on Eligible Tourist Packages

Published: April 13, 2020

Last Updated: April 13, 2020

GST/HST Refund for Tourists

The Foreign Convention and Tour Incentive Program (FCTIP) offers a GST/HST refund to non-residents on eligible tourist packages. The tourist part offers a GST/HST refund to non-residents on eligible tourist packages (see ETA 252.1). The tourist package must cost at least $200 and make available short term accommodation and/or camping to the non-resident. The refund is half the GST/HST paid on the package adjusted down for time covered by the tourist package where accommodation was not provided. To get the refund you need to fill out the GST115 form. You have one year to apply for the rebate. The convention part of FCTIP offers refunds to non-resident sponsors, organizers, and exhibitors of a Canada based convention. It doesn’t offer refunds to non-residents who attend the convention.

Disclaimer:.

"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."

About the Author

David j. rotfleisch.

David J. Rotfleisch, a leading Canadian tax lawyer, is not only a certified specialist in taxation but also a chartered professional accountant. Most recently, David is a pioneer in Canadian crypto taxation.

As of April 2020, he was one of 12 Ontario Certified Specialists In Taxation™.

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Major retailers call for tax refund for international tourists

A group of major Canadian retailers is asking the federal government to re-implement a Visitor Tax Refund in an effort to boost tourism and invigorate the Canadian economy.

The group, which includes Hudson’s Bay Company, Cadillac Fairview, Birks Group Inc., and Harry Rosen, says bringing back the refund could be a major incentive to the country’s tourism industry.

“We estimate, thanks to independent analysis, that this would bring up to $1 billion dollars, fresh revenue to Canada, tax revenue for the government, but also approximately 32,000 new jobs in Canada,” Jean-Christophe Bedos, president and CEO of Birks Group Inc. said.

The proposal is also supported by the Retail Council of Canada, who note that according to Statistics Canada data, the spend-per-tourist is down five per cent over the last seven years, while in countries like Japan and the Bahamas—who both recently implemented a visitor tax refund—tourist spending is up considerably.

“Every reasonable and cost-effective level should be used to renew the tourism sector’s important contribution to the Canadian economy, since many businesses rely on tourist spending,” Michelle Wasylyshen, national spokeswoman for the Retail Council of Canada, said.

Some Ottawa businesses say they support the move.

“I think it’s something that should be done and we should just keep something like that happening,” Ian Wright, owner of Snow Goose Gallery on Sparks Street, said.

Wright says tourism is a major part of his business and although this summer has been better, the store is still not seeing the amount of customers they were accustomed to prior to the pandemic. Among those who do come, Wright adds there are still tourists inquiring about Canada’s former visitor tax refund; a program cancelled by the federal government in 2007.

“It worked great and everybody said don’t stop it, don’t stop it,” Wright said.

In a statement to CTV News, Gabriel Felcarek, a spokesperson for the federal tourism minister, Randy Boissonneault, wrote, “A former rebate program was discontinued in 2007 because it was found not to be a cost-effective way for the federal government to help attract tourists to Canada.

“The Minister of Tourism is working with the tourism industry, provincial and territorial counterparts, and Indigenous tourism operators to develop a new post-pandemic Federal Tourism Growth Strategy,” Felcarek added.

But Ottawa retailers say tools like these are critical to helping the industry rebound.

“We want the economy back on track and tourism back on track, these things are really important,” Wright said.

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Retail groups want feds to implement visitor tax refund to boost Canadian economy

By Patricia D'Cunha and Laura Carney

Posted September 27, 2022 8:57 am.

A group of Canadian retailers and retail groups are calling on the federal government to implement a Visitor Tax Refund (VTR) program, in an effort to help stimulate economic recovery in this country.

The stakeholders, including Birks Group Inc., Hudson’s Bay Company, Cadillac Fairview Corporation Limited, and the Retail Council of Canada, submitted a proposal to Tourism Minister Randy Boissonnault in July, as part of a consultation on the federal government’s Tourism Growth Strategy.

The proposed program would allow international shoppers to reclaim the Goods and Services Tax (GST) and provincial sales tax on their purchases — a move the retail groups believe would boost both the number of visitors to Canada and the amount of money they spend.

The retail groups said the COVID-19 pandemic affected the tourism, hospitality and retail sectors, and that the program would help economic recovery in those areas.

Jean-Christophe Bedos, president and CEO of Birks, said a VTR program would position Canada as a global shopping destination and would substantially benefit the Canadian economy.

“The international context and the closing of borders have exacerbated an already serious issue of declining tourist spending in Canada. Every opportunity must be taken to stimulate the Canadian economy. This program would greatly benefit the tourism sector, retailers, and the Canadian economy in general, as it faces unprecedented economic challenges,” Bedos said.

“We are convinced that implementation of a Visitor Tax Refund program must be part of a series of actions by the government to ensure a strong economic recovery and position Canada as a global shopping destination and would substantially benefit the Canadian economy more broadly.”

Although the COVID-19 pandemic has exacerbated the decline in the tourism industry, the retail groups said Canada has been facing a five per cent decline in per-capita tourist spending since 2017, which is when the federal government cancelled the previous visitor rebate program.

In comparison, the European Union, United Kingdom and Japan has seen an increase of 23 per cent in tourism spending since its rebate program was introduced in 2012.

Meanwhile the tourism industry is breathing a sigh of relief as Canada’s remaining COVID-19 travel measures, including border vaccine mandates and the use of the ArriveCAN app at the border, are being dropped as of Oct. 1 . Tourism groups have been calling for the border measures to be lifted.

The lifting measures include border vaccine mandates, mandatory masking on planes and trains, and testing and quarantine for international travellers.

With files from Michael Ranger of CityNews

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An alliance of economic stakeholders is calling for the implementation and return of a Visitor Tax Refund program to stimulate the Canadian economy.

The alliance includes Aldo Group Inc. , Birks Group Inc. , Harry Rosen Inc. , Hudson’s Bay Company , Cadillac Fairview Corporation Limited , Quadreal Property Group , the Retail Council of Canada , Global Blue Group and Triple Five .

The alliance submitted on July 20 its brief to the Minister of Tourism and Associate Minister of Finance, Randy Boissonnault , as part of the consultations of the federal government’s Tourism Growth Strategy.

The implementation of this measure is intended to ensure an economic recovery in the tourism sector, which has been greatly affected by the global situation of the last few years, said the alliance.

“The pandemic has affected many industries, including tourism, hospitality, and retail. The program proposed would allow international shoppers to reclaim the Goods and Services Tax (GST) and provincial sales tax on their purchases. The Alliance strongly believes this would boost both the number of visitors to Canada and the amount of money spent by those visitors.

An ongoing decline in per-capita tourist spending had already been observed, beginning in 2007, when the Government of Canada canceled the previous visitor rebate program,” said the alliance.

“A five per cent decline in this sector over the past seven years was a marked contrast to competing jurisdictions, such as the European Union, United Kingdom, or Japan, which has seen a 23 per cent increase in spending since its program was implemented in 2012. While the objective of the program is to ensure neutrality of tax treatment between tourist spending on exported goods and other exports, a VTR would enhance the international competitiveness of the tourism sector and domestic retailers, while increasing our country’s retail sales and exports, resulting in increased tourism shopping yield and a range of macroeconomic benefits.”

Just recently, the federal government dropped all COVID travel restrictions.

Bedos said that back in the Spring earlier this year the Tourism Minister invited the industry to contribute and make proposals about tourism in Canada.

“We had started working on analyzing with the Retail Council of Canada what difference it would make to reintroduce the Visitor Tax Refund. But when Mr. Boissonnault invited contributions to re-launch the tourism industry in Canada, post-pandemic, we felt that this was time to make a serious, well-documented proposal because we strongly believe, based on experience, that in many, many other countries that the Visitor Tax Refund makes a big difference in terms of number of visitors and in terms of how much visitors spend and how much revenue it brings to the economy,” he said.

“For Canada to emerge as a destination for true international tourists, Canada needs to step up to the best international standards and when you look at how much tourism represents in terms of percentage of GDP in Canada it’s less than two per cent. But in countries in Europe like France, Italy and Spain, it’s in the area of eight per cent and this is very much due to how the country has organized the strategy to attract tourists and the Visitor Tax Refund is part of that strategy.”

Bedos said the recent lifting of COVID restrictions in travel will have a very strong impact on the tourism industry in Canada.

“You need incentives not deterrents to attract people. A lot of people have a choice to decide which country they are going to visit. If we make it difficult or not very attractive for international travelers to come to Canada then they go somewhere else,” he said.

“And let me tell you, we have observed, and analyzed the data, since Canada dropped the Visitor Tax Refund, previous (system), that wasn’t very productive and expensive to manage for the government. The government dropped the program in 2007. Since 2007, the spend per capita for tourists has dropped year in, year out. Forget about COVID years. Of course, they were exceptions but over 15 years, every year the spend per capita has dropped between five and seven per cent. We need to bring that back up because countries like Japan, for example, or every other country of the OECD who have a Visitor Tax Refund program has seen spend per capita, how much each tourist spends when they visit, they have seen that number increase every year.

“So there’s a very big missed opportunity for Canada and the economy. We estimate that actually this would represent about $1 billion of revenue for Canada which is missed because we don’t have a Visitor Tax Refund system.”

According to Statistics Canada, tourism spending in Canada grew 19.8 per cent in the second quarter, a fifth consecutive quarterly increase. Tourism gross domestic product (GDP) (+20.4 per cent) and jobs attributable to tourism (+11.2 per cent) also rose in the second quarter.

The federal agency said travel restrictions impacting tourism activities during the first quarter of 2022 were eased effective February 28, allowing the tourism sector to continue its recovery in the second quarter. More visitors from outside of Canada were admitted, and passenger air travel expanded services. With this most recent increase, tourism spending in the second quarter was 21.7 per cent lower than the pre-COVID-19-pandemic levels of the fourth quarter of 2019, added StatsCan.

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GST refund for tourist - Canada Forum

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GST refund for tourist

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Are we entitled for GST refund on amount spent during our stay as an individual tourist. I did read somewhere that as an tour organiser one can claim refund within a year but could not find specific information on individual..

If allowed what is the procedure... for an example while our visit to UK/Scotland it was pretty easy that we had to fill form alongwith original receipts to be dropped in a box at Edinbrough airport at the time of departure..and we had amount credited in my Credit card account mentioned on form..and was paid for each of our filling in 1 month...

Can some one guide me here please..

Thanks Krp. For your quick response..

will go thru the same...

This topic has been closed to new posts due to inactivity.

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Tourist Refund Scheme (TRS)

Need a hand.

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Can tourist/Visitor can claim the GST Refund ? - Canada Forum

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Can tourist/Visitor can claim the GST Refund ?

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I am Tourist here.

Can I claim the GST (at Airport) while leaving from the country.

If yes then, what is the procedure for that.

As noted on your other post, you cannot. The GST rebate program ended many years ago.

This topic has been closed to new posts due to inactivity.

2 weeks in early may Trans Canada Highway 09:34
Tent camping or hostel in Jasper? 09:21
long Luggage storage 08:46
Is this itinerary too much driving? 08:45
Boston to Niagra Falls roadtrip! 08:33
Jasper Visit 08:05
day trip to Quebec City and falls 06:56
TR - Victoria 4 nights then road trip - April 2024 06:43
Can I drive in and out from campgrounds wit an RV 06:19
Renting a car on Vancouver island or in Vancouver? 04:16
Stay in Sooke or Ladysmith for 3 night excursion? 00:55
Icefield Parkway 23:11
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2024 Federal Budget analysis

On April 16, 2024, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the government’s budget. The budget:

increases the capital gains inclusion rate from 1/2 to 2/3, effective June 25, 2024 (up to $250,000 of annual gains for individuals will continue to benefit from the 1/2 inclusion rate)
raises the lifetime capital gains exemption to $1.25 million and introduces a new 1/3 inclusion rate for up to $2 million of certain capital gains realized by entrepreneurs
confirms previously announced alternative minimum tax proposals effective January 1, 2024, but softens the impact of these proposals on charitable donations
provides design and implementation details for the clean electricity investment tax credit
introduces accelerated capital cost allowance (CCA) for, and relief from interest deductibility limitations for debt incurred to fund the construction of, certain purpose-built rental housing
provides immediate expensing for the cost of certain patents and computer equipment and software
gives the Canada Revenue Agency (CRA) additional information gathering powers

This Tax Insights discusses these and other tax initiatives proposed in the budget.

Tax measures

Capital gains inclusion rate.

Lifetime Capital Gains Exemption

Canadian Entrepreneurs’ Incentive

Alternative Minimum Tax

Employee Ownership Trust Tax Exemption

Volunteer firefighters tax credit and search and rescue volunteers tax credit, mineral exploration tax credit for flow-through share investors.

Canada Child Benefit

Disability Supports Deduction

Charities and qualified donees.

Home Buyers’ Plan

Qualified Investments for Registered Plans

Deduction for tradespeople’s travel expenses, indigenous child and family services settlement, clean electricity investment tax credit, ev supply chain investment tax credit, clean technology manufacturing investment tax credit.

Accelerated Capital Cost Allowance

Interest Deductions and Purpose-Built Rental Housing

Taxing vacant lands to incentivize construction, confronting the financialization of housing, halal mortgages, non-compliance with information requests, synthetic equity arrangements, mutual fund corporations, canada carbon rebate for small business, avoidance of tax debts, reportable and notifiable transactions penalty, manipulation of bankrupt status.

Scientific Research and Experimental Development

International

Crypto-asset reporting, withholding for non-resident service providers, international tax reform.

Extending GST Relief to Student Residences

GST/HST on Face Masks and Face Shields

Previously announced, personal tax measures.

The budget proposes to increase the capital gains inclusion rate from 1/2 to:

2/3 for dispositions after June 24, 2024 for corporations and trusts, and
2/3 for the portion of capital gains realized after June 24, 2024 in excess of an annual $250,000 threshold for individuals

The $250,000 annual threshold would apply to capital gains realized by an individual, either directly or indirectly via a partnership or trust, net of:

current year capital losses
capital losses of other years applied to reduce current year capital gains, and
capital gains in respect of which the Lifetime Capital Gains Exemption (LCGE), the proposed Employee Ownership Trust Exemption or the proposed Canadian Entrepreneurs’ Incentive is claimed

As a result, the following rates will apply to capital gains earned by individuals in excess of the $250,000 threshold who are subject to the top marginal income tax rate (i.e. on taxable income exceeding: $355,845 in Alberta, $252,752 in British Columbia, $1,103,478 in Newfoundland and Labrador, $500,000 in the Yukon and $246,752 in all other jurisdictions).

The budget also proposes to decrease the stock option deduction to 1/3 to align with the new capital gains inclusion rate. Individuals would continue to benefit from a deduction of 1/2 of the taxable benefit up to a combined $250,000 for both employee stock options and capital gains.

The inclusion rate for net capital losses carried forward and applied against capital gains will be adjusted to reflect the inclusion rate of the capital gains being offset.

Transitional rules will apply to taxation years that begin before June 25, 2024 and end after June 24, 2024 such that capital gains realized before June 25, 2024 would be subject to the 1/2 inclusion rate and capital gains realized after June 24, 2024 (net of any losses) would be subject to a 2/3 inclusion rate. The $250,000 threshold will not be prorated for individuals in 2024 and will apply only against capital gains incurred after June 24, 2024.

Additional details will be provided in the coming months.

Earning capital gains through a Canadian-controlled private corporation (CCPC)

In most jurisdictions, the increase in the capital gains inclusion rate makes it less attractive for individuals to earn capital gains in excess of $250,000 through a CCPC instead of directly. The Appendix shows the resulting income tax deferral (prepayment) and the tax cost for an individual who realizes capital gains in excess of $250,000 and pays tax at the top tax rate.

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Lifetime Capital Gains Exemption (LCGE)

The budget proposes to increase the LCGE on eligible capital gains from $1,016,836 to $1,250,000 for dispositions that occur after June 24, 2024. The indexing of the LCGE to inflation will resume in 2026.

The budget introduces the Canadian Entrepreneurs’ Incentive, which will reduce the taxes on capital gains from the disposition of shares by eligible individuals which meet the following conditions:

at the time of the sale the share was a share of a small business corporation owned directly by an individual
used principally in an active business carried on primarily in Canada by the CCPC or a related corporation
certain shares or debts of connected corporations, or
a combination of these assets
the individual was a founding investor and the individual held the share for a period of five years prior to the disposition
at all times since the share subscription until the time immediately before the sale, the individual directly owned shares with a fair market value (FMV) of more than 10% of the FMV of all of the issued and outstanding shares of the corporation and shares entitling the individual to more than 10% of the votes
throughout the five year period before the disposition the individual was actively engaged in a regular, continuous and substantial basis in the activities of the business
the share does not represent a direct or indirect interest in a professional corporation, a corporation whose principal asset is the reputation or skill of one or more employees, or a corporation that carries on certain types of businesses including a business operating in the financial, insurance, real estate, food and accommodation, arts, recreation, or entertainment sector, or providing consulting or personal care services
the share must have been obtained for fair market value consideration

The incentive would provide a capital gains inclusion rate of one half of the prevailing inclusion rate on up to $2 million in capital gains per individual during their lifetime. The $2 million limit will be phased in over 10 years by increments of $200,000 per year reaching $2 million by January 1, 2034.

Applying the proposed 2/3 inclusion rate would result in an inclusion rate of 1/3 for qualifying dispositions. This will apply in addition to the LCGE.

This measure would apply to dispositions that occur after December 31, 2024.

Alternative Minimum Tax (AMT)

The 2023 budget announced amendments to change the calculation of the AMT. Draft legislative proposals were released for consultation in the summer of 2023. (For more information, see our Tax Insights “ Proposed changes to the alternative minimum tax: How will it affect individuals and trusts ”.)

The budget proposes to revise the proposed charitable donation tax credit claim to allow individuals to claim 80% when calculating AMT (as opposed to the previously proposed 50%).

The budget also proposes additional amendments to the AMT proposals including:

allowing deductions for the Guaranteed Income Supplement, social assistance and workers compensation payments
fully exempting employee ownership trusts (EOTs) from the AMT, and
allowing certain disallowed credits under the AMT to be eligible for the AMT carry-forward (i.e. the federal political contribution tax credit, investment tax credits (ITCs), and labour-sponsored funds tax credit)

The amendments would apply to taxation years that begin after December 31, 2023.

The budget also proposes certain technical amendments to the AMT legislative proposals to exempt certain trusts for the benefit of Indigenous groups.

The 2023 budget proposed tax rules to create EOTs. The 2023 Fall Economic Statement proposed to exempt $10 million of capital gains on the sale of a business to an EOT subject to certain conditions.

The budget introduces the conditions for this exemption. The exemption will be available to an individual (other than a trust) on the sale of a business to an EOT where the following conditions are met:

the individual, a personal trust of which the individual is a beneficiary, or a partnership in which the individual is a member, disposes of shares of a corporation that is not a professional corporation
the transaction is a qualifying business transfer (as defined in the proposed rules for EOTs) in which the trust acquiring the shares is not already an EOT or a similar trust with employee beneficiaries
throughout the 24 months immediately prior to the qualifying business transfer, the transferred shares were exclusively owned by the individual claiming the exemption, a related person, or a partnership in which the individual is a member; and over 50% of the FMV of the corporation’s assets were used principally in an active business
at any time prior to the qualifying business transfer, the individual (or their spouse or common-law partner) has been actively engaged in the qualifying business on a regular and continuous basis for a minimum period of 24 months
immediately after the qualifying business transfer, at least 90% of the beneficiaries of the EOT are resident in Canada

Where multiple individuals dispose of shares to an EOT as part of a qualifying transfer and meet the conditions above, they may each claim an exemption, however the total exemption in respect of the sale cannot exceed $10 million. The individuals would have to agree on the allocation of the exemption.

If an EOT has a disqualifying event within 36 months of the transfer, the exemption claim will be retroactively denied. If this occurs more than 36 months after a transfer the EOT will be deemed to realize a capital gain equal to the total exempt capital gains. A disqualifying event would result where an EOT loses its status as an EOT or if less than 50% of the FMV of the qualifying business shares is attributable to assets used principally in an active business at the beginning of two consecutive years of the corporation.

The EOT, any corporation owned by the EOT that acquired the transferred shares, and the individual will need to elect to be jointly and severally, or solitarily liable for any tax payable by the individual as a result of an exemption being denied due to a disqualifying event occurring during the first 36 months.

For the purposes of the AMT calculation the capital gain on the transfer would be subject to an inclusion rate of 30% (consistent with the inclusion rate for capital gains eligible for the LCGE).

An individual’s normal reassessment period as it relates to this exemption is proposed to be extended by an additional three years.

The budget also proposes to expand qualifying business transfers to include the sale of shares to a workers cooperative corporation, provided it meets certain conditions.

These measures will apply to qualifying dispositions of shares that occur between January 1, 2024 through December 31, 2026.

The budget proposes to double the volunteer firefighters tax credit and the search and rescue volunteers tax credit to $6,000 for the 2024 and subsequent taxation years; this increases the maximum annual tax savings to $900.

The budget proposes to extend the eligibility for this credit for an additional year, so that it will apply to flow-through share agreements entered into before April 1, 2025.

Canada Child Benefit (CCB)

A CCB recipient is no longer eligible to claim the CCB in respect of a child in the month following the child’s death. The budget proposes to extend eligibility for the CCB to six months after the child’s death, provided the individual continued to be eligible for the CCB.

The budget proposes to extend the list of expenses recognized for the disability supports deduction.

It also provides that expenses for service animals, as defined under the medical expense tax credit (METC) rules, will be recognized under the disability supports deduction. The individual will choose whether to claim under the METC or the disability supports deduction.

A foreign charity may register as a qualified donee for a 24-month period where it received a gift from His Majesty in right of Canada and it is pursuing certain activities in the national interest of Canada. The budget proposes to extend the eligibility of a foreign charity to be considered a qualified donee from 24 months to 36 months. The foreign charity would also be required to submit an annual information return to the CRA that would be made publicly available. The extension will apply to foreign charities registered after April 16, 2024. The reporting requirements will apply to taxation years beginning after April 16, 2024.

The budget also proposes to simplify the issuance of official donation receipts by removing certain requirements.

Home Buyers’ Plan (HBP)

To help first-time home buyers, the budget proposes to:

increase, from $35,000 to $60,000, the amount that an eligible home buyer can withdraw from their Registered Retirement Savings Plan (RRSP) under the HBP, without subjecting the withdrawal to tax, to buy or build a qualifying home (i.e. a first home or a home for a specified disabled individual), effective for the 2024 and subsequent calendar years, for withdrawals made after April 16, 2024
temporarily extend the repayment grace period by three years, to five years, under the HBP, so that eligible home buyers who withdraw from their RRSP between January 1, 2022 and December 31, 2025 will have up to five years before they need to start repayments to their RRSP

Registered plans (RRSPs, Registered Retirement Income Funds, Tax-Free Savings Accounts, Registered Education Savings Plans, Registered Disability Savings Plans, First Home Savings Accounts, and Deferred Profit Sharing Plans) can invest only in qualified investments for those plans. Qualified investments include mutual funds, publicly traded securities, government and corporate bonds and guaranteed investment certificates. Over the years the qualified investment rules have been expanded to include additional investments for certain plans and to reflect the introduction of new types of plans, but there are inconsistencies and the qualified investment rules are difficult to understand in some cases.

Specific issues are currently under consideration. Stakeholders are invited to submit comments by July 15, 2024 as to how the qualified investment rules can be modernized on a prospective basis to improve the clarity and coherence of the registered plans regime.

Eligible tradespeople and apprentices in the construction industry are currently able to deduct up to $4,000 in eligible travel and relocation expenses per year by claiming the labour mobility deduction for tradespeople. A private member’s bill (Bill C-241) was introduced to enact an alternative deduction for certain travel expenses of tradespeople in the construction industry, with no cap on expenses, retroactive to the 2022 taxation year.

The budget announces that the government will consider bringing forward amendments to the Income Tax Act (ITA) to provide a single, harmonized deduction for tradespeople’s travel that respects the intent of Bill C-241.

The budget proposes to amend the ITA to exclude from taxation the income of the trusts established under the First Nations Child and Family Services, Jordan’s Principle, and Trout Class Settlement Agreement. This will also ensure that payments received by class members as beneficiaries of the trusts will not be included when computing income for federal income tax purposes.

This measure will apply to the 2024 and subsequent taxation years.

Business tax measures

The 2023 budget proposed a refundable ITC for clean electricity, equal to 15% of the capital cost of eligible property. The 2024 budget provides the design and implementation details of the ITC, including the eligibility criteria. It also includes special rules for property that generates electricity from natural gas with carbon capture and property used to transmit electrical energy between provinces or territories, as well as details of the compliance and recovery process.

The ITC will be available only to eligible Canadian corporations, which are defined as:

taxable Canadian corporations and pension investment corporations
provincial and territorial Crown corporations (subject to additional requirements)
corporations owned by municipalities or Indigenous communities

Property eligible for the ITC includes equipment used to generate electricity from:

solar, wind or water energy (certain class 43.1 property, but hydroelectric installations would not be subject to a capacity limit)
concentrated solar energy (as defined for the purposes of the proposed clean technology ITC)
nuclear fission, including heat generating equipment (as defined for the purposes of the proposed clean technology ITC, without the generating capacity limits and other certain requirements of that credit)
geothermal energy, including heat generating equipment, if it is used exclusively for that purpose (excluding equipment that is part of a system that extracts fossil fuel for sale)
specified waste materials, as part of a system

Eligible property also includes equipment that is:

stationary electricity storage equipment and equipment used for pumped hydroelectric energy storage (excluding any that uses a fossil fuel in operation)
part of an eligible natural gas energy system (special rules apply)
used for transmission of electricity between provinces and territories (special rules apply)

Previously proposed labour requirements must be met to qualify for the 15% ITC, otherwise a 5% ITC is available. The ITC will be subject to potential repayment obligations, repayable in proportion to the FMV of the particular property when it has been converted to an ineligible use, exported from Canada, or disposed of.

The ITC will be available for new eligible property (i.e. has not been used for any purposes before its acquisition) that is acquired and becomes available for use after April 15, 2024 and before 2035 in respect of projects that did not begin construction before March 28, 2023.

The budget introduces the EV supply chain ITC, equal to 10% of the cost of buildings used in Canada in the following electric vehicle supply chain segments:

electric vehicle assembly
electric vehicle battery production
cathode active material production

To qualify for the ITC, the taxpayer (or member of a group of related taxpayers) must claim the clean technology manufacturing ITC (CTMITC) in all three of the segments (or must claim the CTMITC in two of the three segments and hold at least a qualifying minority interest in an unrelated corporation that claims the CTMITC in the third segment – the building costs of the unrelated corporation would also qualify for the new ITC).

The ITC is effective for property that is acquired and becomes available for use after December 31, 2023. The ITC will be reduced to 5% for 2033 and 2034 and 0% after 2034. Design and implementation details of the ITC will be provided in the 2024 Fall Economic Statement.

The 2023 budget proposed a clean technology manufacturing ITC, and draft legislative proposals were released in December 2023. The 2024 budget proposes to update the clean technology manufacturing ITC for production of qualifying minerals (such as copper, nickel, cobalt, lithium, graphite and rate earth elements) that occur at polymetallic projects (i.e. projects engaged in the production of multiple minerals) by:

clarifying that the value of qualifying materials will be used as the appropriate output metric when assessing the extent to which property is used (or expected to be used) for qualifying mineral activities producing qualifying materials
modifying eligible expenditures to include investments in eligible property used in qualifying mineral activities that are expected to produce primarily qualifying materials at mine or well sites, including tailing ponds and mills located at these sites (50% or more of the financial value of the output comes from qualifying materials)

A safe harbour rule will apply to the recapture rule for all qualifying mineral activities, to mitigate against the effects of mineral price volatility on the potential recapture of the ITC, the details of which will be provided at a later date.

Accelerated Capital Cost Allowance (CCA)

Purpose-built rental housing.

The budget provides an accelerated CCA of 10% for new eligible purpose-built rental projects that begin construction after April 15, 2024 and before January 1, 2031, and are available for use before January 1, 2036.

Eligible property will be new purpose-built rental housing that is a residential complex:

with at least four private apartment units, or 10 private rooms or suites, and
in which at least 90% of residential units are held for long-term rental

The Accelerated Investment Incentive (AII), which suspends the half-year rule, will continue to apply to eligible property put in use before 2028. The accelerated CCA will not apply to renovations of existing residential complexes, but new additions to an existing structure will be eligible. Projects that convert existing non-residential real estate into a residential complex will be eligible.

Productivity-enhancing assets

The budget provides immediate expensing (i.e. a 100% first-year CCA deduction) for property that is acquired after April 15, 2024 and becomes available for use before January 1, 2027, for the following CCA classes of assets:

class 44 (patents or rights to use patented information for a limited or unlimited period)
class 46 (data network infrastructure equipment and related systems software)
class 50 (general-purpose electronic data-processing equipment and systems software)

The accelerated CCA will be available only for the year in which the property becomes available for use. For a short taxation year, the accelerated CCA must be prorated and will not be available in the following taxation year. Property that becomes available for use after 2026 and before 2028 will continue to benefit from the AII.

Property that has been used (or acquired for use) for any purpose before it is acquired by the taxpayer will be eligible for the accelerated CCA only if both of the following conditions are met:

neither the taxpayer nor a non-arm’s length person previously owned the property, and
the property has not been transferred to the taxpayer on a tax-deferred “rollover” basis

The excessive interest and financing expenses limitation (EIFEL) rules restrict a Canadian taxpayer’s deductions for interest and financing expenses, based upon a percentage of its “tax-EBITDA” (i.e. its taxable income, adjusted for items such as interest expenses, depreciation and amortization). For a discussion of the EIFEL rules, see our Tax Insights “ Bill C-59 ─ Excessive interest and financing expenses limitation (EIFEL) regime .” The EIFEL rules currently include a single sector-specific exemption, for certain interest and financing expenses relating to public-private partnership (P3) infrastructure projects. The budget proposes to extend this election, on an elective basis, for certain interest and financing expenses relating to arm’s length financing that is used to build or acquire certain purpose-built rental housing located in Canada. This exemption will be effective for taxation years beginning after September 30, 2023, consistent with the EIFEL rules more generally. However, this exemption will be available only for expenses incurred before January 1, 2036.

The government is concerned that some landowners are holding residentially zoned vacant land as a speculative investment. The budget announces that the government will consider introducing a new tax on residentially zoned vacant land to spur development. The government will launch consultations later this year.

In March 2024, the government began consultations on how federal policies can better support the needs of all Canadians seeking to become homeowners. The government will provide an update in the 2024 Fall Economic Statement.

The budget announces the government’s intention to restrict the acquisition of existing single-family homes by very large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement.

The budget announces that the government is exploring new measures to expand access to alternative financing products for home purchasers, such as halal mortgages. These measures could include changes in the tax treatment of these products or a new regulatory regime for financial service providers, while ensuring adequate consumer protections are in place.

The budget proposes several amendments to the CRA’s information gathering provisions in the ITA, with the intent of enhancing the efficiency and effectiveness of tax audits and facilitating the collection of tax revenues on a timelier basis. These changes include:

allowing the CRA to issue a new type of notice, referred to as a “notice of non-compliance” and to levy a monetary penalty
permitting the CRA to specify that any required information (oral or written) or documents be provided under oath or affirmation
imposing a penalty when the CRA obtains a compliance order against a taxpayer, and
extending the stop the clock rules (which suspend the counting of days in the assessment limitation period), so that these rules apply when a taxpayer seeks judicial review of any requirement or notice issued to the taxpayer by the CRA in relation to the audit and enforcement process, and during any period that a notice of non-compliance is outstanding

Analogous amendments are also proposed to other federal tax statutes administered by the CRA. The budget also proposes certain technical amendments to ensure the rules meet their policy objectives.

These amendments would come into force upon royal assent of the enacting legislation.

The ITA allows a corporation to deduct the amount of any dividends received on a share of a corporation resident in Canada, subject to certain limitations.

One of these limitations is an anti-avoidance rule that denies the dividend received deduction in connection with synthetic equity arrangements. Synthetic equity arrangements include arrangements in which a person receives a dividend on a share, but all or substantially all of the risk of loss and opportunity for gain or profit (the “economic exposure”) in respect of the share are provided to another person.

Where a taxpayer enters into a synthetic equity arrangement in respect of a share, the taxpayer is generally obligated to compensate the other person for the amount of any dividends paid on the share. This compensation payment may result in a tax deduction for the taxpayer in addition to the dividend received deduction. Unless the anti-avoidance rule applies to deny the dividend received deduction, a tax loss would generally arise as a result of the two deductions.

The anti-avoidance rule incorporates certain exceptions, including where the taxpayer establishes that no tax-indifferent investor has all or substantially all of the economic exposure in respect of the share. An associated exception is also available for synthetic equity arrangements traded on a derivatives exchange.

The budget proposes to remove the tax-indifferent investor exception (including the exchange traded exception) to the anti-avoidance rule. This measure would prevent taxpayers from claiming the dividend received deduction for dividends received on a share in respect of which there is a synthetic equity arrangement.

This measure would apply to dividends received after December 31, 2024.

A mutual fund is a type of investment vehicle that allows investors to pool their money and invest in a portfolio of investments without purchasing the investments directly. A mutual fund corporation is a mutual fund organized as a corporation that meets certain conditions set out in the ITA.

The ITA includes special rules for mutual fund corporations that facilitate conduit treatment for investors (shareholders). For example, these rules generally allow capital gains realized by a mutual fund corporation to be treated as capital gains realized by its investors. In addition, a mutual fund corporation is not subject to mark-to-market taxation and can elect capital gains treatment on the disposition of Canadian securities.

To qualify as a mutual fund corporation under the ITA, a corporation must satisfy several conditions, including that it must be a “public corporation”. A corporation can meet this condition if a class of its shares is listed on a designated stock exchange in Canada. A corporation that is controlled by a corporate group may satisfy this condition, and qualify as a mutual fund corporation, even though it is not widely held. The government is concerned that this could allow a corporate group to use a mutual fund corporation to benefit from the special rules available to these corporations in an unintended manner.

Although the government believes this planning can be challenged based on existing rules in the ITA, the budget proposes specific amendments to the ITA to preclude a corporation from qualifying as a mutual fund corporation where it is controlled by or for the benefit of a corporate group (including a corporate group that consists of any combination of corporations, individuals, trusts, and partnerships that do not deal with each other at arm’s length). Exceptions would be provided to ensure that the measure does not adversely affect mutual fund corporations that are widely held pooled investment vehicles.

This measure would apply to taxation years that begin after 2024.

The budget introduces the Canada Carbon Rebate for Small Business, to return a portion of the federal backstop pollution pricing fuel charge proceeds collected from a province. This will be an automatic refundable tax credit for CCPCs with less than 500 employees in Canada in the calendar year in which the fuel charge begins. The tax credit in respect of the 2019-20 to 2023-24 fuel charge years will be available to a CCPC that files a tax return for its 2023 taxation year by July 15, 2024 (with similar timelines for future fuel charge years).

The tax credit amount:

is determined for each applicable province in which the eligible corporation had employees in the calendar year in which the fuel charge year begins; and
is equal to the number of persons employed by the eligible corporation in the province in that calendar year multiplied by a payment rate specified by the Minister of Finance for the province for the corresponding fuel charge year

The ITA includes an anti-avoidance rule that is intended to prevent taxpayers from avoiding payment of their tax liabilities by transferring their assets to non-arm’s length persons. The effect of this tax debt avoidance rule is to make the transferee jointly and severally, or solidarily, liable with the transferor for the transferor’s tax debts, to the extent that the value of the property transferred exceeds the amount of consideration given by the transferee for the property.

The ITA contains a number of rules that address various planning techniques employed by taxpayers attempting to circumvent the tax debt avoidance rule, as well as a penalty for those who engage in, participate in, assent to, or acquiesce in planning activity that they know, or would reasonably be expected to know, is tax debt avoidance planning.

The budget includes a new specific measure to address tax debt avoidance planning (although the government believes this planning can also be challenged based on existing rules in the ITA). The measure would apply in the following circumstances:

there has been a transfer of property from a tax debtor to another person
as part of the same transaction or series of transactions, there has been a separate transfer of property from a person other than the tax debtor to a transferee that does not deal at arm’s length with the tax debtor, and
one of the purposes of the transaction or series is to avoid joint and several, or solidary, liability

Where these conditions are met, the property transferred by the tax debtor would be deemed to have been transferred to the transferee for the purposes of the tax debt avoidance rule. This would ensure that the tax debt avoidance rule applies in situations where property has been transferred from a tax debtor to a person and, as part of the same transaction or series, property has been received by a non-arm’s length person. The penalty applicable to those who participate in tax debt avoidance planning would also be extended to this proposed new rule.

In many cases, tax debt avoidance planning is facilitated by a planner who receives a significant fee, which is effectively funded by a portion of the avoided tax debt. The courts have held that a taxpayer who engages in tax debt avoidance planning is normally not jointly and severally, or solidarily, liable for the portion of the tax debt that has effectively been retained by the planner as a fee. The budget proposes that taxpayers who participate in tax debt avoidance planning be jointly and severally, or solidarily, liable for the full amount of the avoided tax debt, including any portion that has effectively been retained by the planner.

Similar amendments would be made to comparable provisions in other federal statutes.

These measures would apply to transactions or series of transactions that occur after April 15, 2024.

The ITA includes a general rule providing that a person who fails to file or make a return or comply with certain specified rules is guilty of an offence, and liable to penalties of up to $25,000 and imprisonment for up to a year. The mandatory disclosure rules in the ITA also include specific penalties that apply in these circumstances, making the application of this general penalty provision unnecessary.

The budget therefore proposes to remove from the scope of the general penalty provision the failure to file an information return in respect of a reportable or notifiable transaction under the mandatory disclosure rules.

This amendment would be deemed to have come into force on June 22, 2023, which is the day the enhanced mandatory disclosure rules received royal assent.

Under the ITA, losses and other tax attributes that arise from expenditures for which a taxpayer did not ultimately bear the cost are generally not recognized. The ITA contains a set of debt forgiveness rules that apply where a commercial debt is settled for less than its principal amount. These rules generally reduce tax attributes by the amount of debt that is forgiven and, where tax attributes have been fully reduced, the rules cause an income inclusion equal to half of the remaining forgiven amount. The ITA also contains a rule that entitles an insolvent corporation to a corresponding deduction to offset all or part of an income inclusion from the debt forgiveness rules.

Bankrupt taxpayers are generally excluded from these debt forgiveness rules. Instead, a separate loss restriction rule applies to extinguish the losses of bankrupt corporations that have received an absolute order of discharge.

The government is concerned that some taxpayers have sought to manipulate the bankrupt status of an insolvent corporation, with a view to benefiting from the exception in the debt forgiveness rules while also avoiding the loss restriction rule applicable to bankrupt corporations. This planning seeks to preserve the losses and other tax attributes of the insolvent corporation (which would otherwise be eliminated upon the forgiveness of its debts), so that these attributes can be acquired and used by a profitable corporation. This planning is the subject of a designated transaction under the notifiable transactions element of the mandatory disclosure rules.

Although the government believes that manipulation of bankrupt status can be challenged based on existing rules in the ITA, the budget proposes a specific legislative measure to address this issue: repealing the exception to the debt forgiveness rules for bankrupt corporations and the loss restriction rule applicable to bankrupt corporations. This change would subject bankrupt corporations to the general rules that apply to other corporations whose commercial debts are forgiven. The bankruptcy exception to the debt forgiveness rules would remain in place for individuals. While bankrupt corporations would be subject to the reduction of their loss carryforward balances and other tax attributes upon debt forgiveness, as insolvent corporations they could qualify for relief from the debt forgiveness income inclusion rule provided under the existing deduction for insolvent corporations.

These proposals would apply to bankruptcy proceedings that are commenced on or after April 16, 2024.

Scientific Research and Experimental Development (SR&ED)

The government launched a consultation on the existing SR&ED tax incentives on January 31, 2024, which closed on April 15, 2024. The budget announces a second phase of consultations, to focus on specific policy parameters, explore how Canadian public companies could become eligible for the enhanced SR&ED ITC and inform how additional funding announced by the budget can support future enhancements to the SR&ED program. Further details of the consultation will be released on the Department of Finance Canada website at a later date.

International tax measures

The Organisation for Economic Co-operation and Development (OECD) has developed a framework for the automatic exchange of tax information relating to transactions in crypto-assets, the Crypto-Asset Reporting Framework (CARF). The budget proposes to implement the CARF in Canada. The new reporting rules will apply to crypto-asset service providers that are resident in Canada, or carry on business in Canada, and that provide services effectuating exchange transactions in crypto-assets. These service providers will need to report certain information regarding their customers and crypto-asset transactions. The budget also includes proposed amendments to the Canadian rules implementing the OECD’s Common Reporting Standard, including changes relating to electronic money products and central bank digital currencies. These measures will apply to 2026 and subsequent calendar years.

A person who makes a payment to a non-resident for services rendered in Canada is currently required to withhold 15% of the payment and remit that amount to the CRA. This is intended to serve as a prepayment of tax that the non-resident may ultimately owe in Canada. Certain non-residents do not owe Canadian tax for these services, e.g. due to exemptions in tax treaties, or exemptions for specific activities like international shipping. In these circumstances, the CRA may provide an advance waiver from the withholding obligation for specific transactions, or the non-residents may apply for refunds of amounts that have already been withheld. The budget proposes to give the CRA legislative authority to grant single waivers that cover multiple transactions occurring over a specific time period, where certain conditions are satisfied. This measure will take effect upon royal assent of the enacting legislation.

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting has developed a two-pillar plan to reform the international tax system, as part of the “BEPS 2.0” initiative. On October 8, 2021, Canada and 135 other countries in the Inclusive Framework committed to adopt this plan (for a discussion on that commitment, see our Tax Insights “ The new international tax framework and Canada’s digital services tax ”). The budget provides an update on the two pillars of this international tax reform initiative.

Pillar One will introduce new rules for allocating taxing rights between countries to address challenges raised by the digital economy. These rules will generally apply to multinational enterprises (MNEs) with annual revenue above €20 billion and profit margins above 10%. The right to tax a portion of these MNEs’ profits will be reallocated to market countries (i.e. the countries where the MNEs’ users and customers are located).

The budget reaffirms Canada’s commitment to bringing Pillar One into effect as soon as a critical mass of countries is willing to participate. In the meantime, Canada is moving ahead with its plan to enact the Digital Services Tax (DST). Implementing legislation for the DST is currently before Parliament in Bill C-59. The DST will take effect beginning in calendar year 2024, with the first year covering taxable revenues earned since January 1, 2022. (For a discussion of the DST, see our Tax Insights “ Digital Services Tax: One step closer to becoming a reality .”)

Pillar Two will introduce a 15% global minimum tax. This tax will generally apply to MNEs with global revenues of at least €750 million. These MNEs will be required to compute their effective tax rate (ETR) in each country where they operate. If the ETR for a particular country is below 15%, a top-up tax will be imposed, to raise that ETR to 15% (this top-up tax may be reduced by a substance-based income exclusion, which is computed based on the payroll costs and net book value of tangible assets located in the jurisdiction). Draft legislative proposals for a Global Minimum Tax Act to implement the Pillar Two regime in Canada were released for public comment in August 2023 (for a discussion of those proposals, see our Tax Insights “ Canada releases draft Global Minimum Tax Act ”). The budget states that Canada is moving forward with this implementing legislation and intends to introduce it in Parliament soon.

Sales tax measures

Extending goods and services tax (gst) relief to student residences.

On September 14, 2023, the government announced that it would temporarily remove the GST from new purpose-built rental housing projects (i.e. apartment buildings, student housing and senior residences built specifically for long-term rental accommodation) by implementing an Enhanced (100%) GST Rental Rebate for new qualifying purpose-built rental housing projects (for more information, see our Tax Insights “ Enhanced GST rental rebate for rental apartments that begin construction after September 13, 2023 ").

To ensure that universities, public colleges and school authorities can also claim the Enhanced (100%) GST Rental Rebate for student residences that are built for short-term use, the budget proposes to amend the Excise Tax Act to allow them to apply the normal GST/Harmonized sales tax (HST) rules that apply to other builders (i.e. paying GST/HST on the final value of the building) in respect of new student housing projects.

The budget also proposes to relax the rebate conditions so that universities, public colleges and school authorities that operate on a not-for-profit basis (i.e. those that would currently qualify for the Public Service Body rebates under the GST/HST) can claim the 100% rebate in respect of any new student residence that they acquire or construct provided it is primarily for the purpose of providing a place of residence for their students.

The proposed measures would apply to student residences that begin construction after September 13, 2023 and before 2031, and that complete construction before 2036.

The budget proposes to repeal the temporary zero rating of certain face masks or respirators and certain face shields under the GST/HST for supplies made after April 30, 2024.

Previously Announced Measures

The budget confirms that the government will proceed with the following previously announced measures, as modified to take into account consultations, deliberations and legislative developments since their announcement or release:

legislative proposals released on December 20, 2023, which include measures relating to the clean hydrogen ITC, the clean technology manufacturing ITC, concessional loans and short-term rentals
legislative and regulatory proposals announced in the 2023 Fall Economic Statement, which include measures relating to the Canadian journalism labour tax credit, the expansion of eligibility for the clean technology and clean electricity ITC, the GST/HST joint venture election rules and the Underused Housing Tax
legislative and regulatory amendments to implement the Enhanced (100%) GST Rental Rebate for purpose-built rental housing announced on September 14, 2023
the carbon capture, utilization and storage and the clean technology ITCs and labour requirements related to certain “clean economy” ITCs
enhancing the reduced tax rates for zero-emission technology manufacturers
flow-through shares and the critical mineral exploration tax credit – lithium from brines
Retirement Compensation Arrangements
strengthening the Intergenerational Business Transfer framework
the income tax and GST/HST treatment of credit unions
a tax on repurchases of equity
modernizing the General Anti-Avoidance Rule
global minimum tax and DST
technical amendments to GST/HST rules for financial institutions
providing relief in relation to the GST/HST treatment of payment card clearing services
extending the quarterly duty remittance option to all licensed cannabis producers
revised Luxury Tax draft regulations to provide greater clarity on the tax treatment of luxury items
technical tax amendments to the ITA and the Income Tax Regulations
legislative amendments to implement changes discussed in the transfer pricing consultation paper released on June 6, 2023
tax measures announced in the 2023 budget, including the dividend received deduction by financial institutions
substantive CCPCs
technical amendments to the ITA and Income Tax Regulations
legislative amendments to implement the hybrid mismatch arrangements rules announced in the 2021 budget

The budget also reaffirms the government’s commitment to move forward, as required, with technical amendments to improve the certainty and integrity of the tax system.

Integration – Capital gains ($)

(taxation year ended December 31, 2024, and $10,000 of capital gains earned after June 24, 2024)

This table shows:

the income tax deferral (prepayment) if capital gains in excess of $250,000 are earned and retained in a corporation as opposed to being earned directly by an individual
the tax (cost) if the after-tax corporate income is paid out as a dividend to the shareholder in 2024

The table assumes:

the individual is in the top marginal tax rate
no capital gains deductions are available
the non-taxable portion of the capital gain is distributed as a tax-free capital dividend
the taxable dividend paid is sufficient to generate a full refund of refundable tax

Download a PDF

Tax Insights: 2024 Federal budget ─ Supporting housing, raising taxes

Dean Landry

National Tax Leader, PwC Canada

Tel: +1 416 815 5090

© 2018 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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GST/HST Information for the Travel and Convention Industry

Notice to reader.

The information on this page replaces the information in Guide RC4036 GST/HST Information for the Travel and Convention Industry, which has been discontinued.

Unless otherwise stated, all legislative references are to the Excise Tax Act or, where appropriate, the GST/HST Regulations.

The CRA uses the term "Indian" as it has legal meaning under the Indian Act.

This page uses plain language to explain the most common tax situations. It is provided for information only and does not replace the law.

Gst/hst and quebec.

What's New?

Definitions

What is the gst/hst, who charges the gst/hst, who pays the gst/hst, taxable supplies (other than zero-rated), zero-rated supplies, exempt supplies, voluntary registration, reporting the gst/hst.

Are long-term stays at my hotel taxable?
Accommodation – related supplies

Food and beverages

Banquet and catering services, reimbursable coupons, non-reimbursable coupons, other coupons, gift certificates, third-party transactions, passenger transportation service, continuous journey.

Taxation area

Which tax rate applies – GST or HST?

Sales of domestic passenger transportation services to travel providers, continuous journey that includes air travel.

Continuous journey that does not include air travel

Other services provided with a transportation service

Sales of taxable property and services on board conveyances in canada, sales of goods and services on board conveyances in international travel, what is a travel provider.

When are my services zero‑rated?
Which rate of tax applies – GST or HST?

Collecting and reporting the GST/HST

What qualifies as short‑term or camping accommodation?
What is an all‑inclusive price?

Examples of tour packages

Examples of packages that are not tour packages for gst/hst purposes, domestic tour packages, tour packages combining supplies that are taxable, exempt, and made outside of canada, foreign tour packages, what is a related convention supply, convention facilities, related convention supplies, exhibition space, who can claim a rebate, what expenses are eligible for the rebate, can i pay or credit a rebate amount, how to pay or credit a rebate amount, rebate for non-resident exhibitors, find out if this page is for you.

This page gives information on how to charge the goods and services tax/harmonized sales tax (GST/HST) on accommodation, tour packages, passenger transportation services, conventions, meeting facilities, and related convention supplies. It explains what is and is not considered to be a tour package for GST/HST purposes. It also explains rebates for foreign conventions and non-resident exhibitors and includes information on how Canadian suppliers can pay or credit certain rebate amounts to eligible persons.

Digital economy businesses

This page does not provide detailed information for the new digital economy measures applicable to digital economy businesses including businesses that are registered or required to be registered under the simplified GST/HST registration regime of the digital economy provisions of Subdivision E of Division II of the Excise Tax Act (ETA) and to platform operators and non resident digital economy businesses that are registered or required to be registered under the normal GST/HST registration regime. You can refer to " GST/HST for digital economy businesses: Overview ", or contact us at 1-833-585-1463 ( from Canada and the U.S .) or 1-613-221-3154 (from elsewhere – collect calls are accepted) for more information.

If you are a charity, different rules may apply. For more information, see Guide RC4082, GST/HST Information for Charities .

In Quebec, Revenu Québec generally administers the GST/HST. If the physical location of your business is in Quebec, you have to file your returns with Revenu Québec using its forms, unless you are a person that is a selected listed financial institution (SLFI) for GST/HST or Quebec sales tax (QST) purposes or both. For more information, see the Revenu Québec publication IN‑203‑V, General Information Concerning the QST and the GST/HST . If you are an SLFI, go to GST/HST and QST – Financial institutions, including selected listed financial institutions .

Commercial activity means any business or adventure or concern in the nature of trade carried on by a person, but does not include :

the making of exempt supplies
any business or adventure or concern in the nature of trade carried on without a reasonable expectation of profit by an individual, a personal trust, or a partnership where all of the members are individuals

Commercial activity also includes a supply of real property, other than an exempt supply, made by any person, whether or not there is a reasonable expectation of profit, and anything done in the course of making the supply or in connection with the making of the supply.

Consumer means a particular individual who acquires or imports property or services for personal consumption, use, or enjoyment or the personal consumption, use, or enjoyment by another individual at the particular individual's expense. It does not include individuals who acquire or import property or services for their commercial activitiy or to make an exempt supply.

Coupon includes a voucher, receipt, ticket or other device that can be redeemed for a product or service or can be used to buy a product or service, but does not include a gift certificate or a barter unit.

Exempt supplies means supplies of property and services that are not subject to the GST/HST. GST/HST registrants generally cannot claim input tax credits to recover the GST/HST paid or payable on property and services acquired to make exempt supplies.

Input tax credit (ITC) means a credit that GST/HST registrants can claim to recover the GST/HST paid or payable for property or services they acquired, imported into Canada, or brought into a participating province for use, consumption, or supply in the course of their commercial activities.

Participating province means a province that has harmonized its provincial sales tax with the GST to implement the harmonized sales tax (HST). Participating provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, but do not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities, as defined in subsection 123(1) of the Excise Tax Act, are carried on in that area.

Person means an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or a body that is a society, a union, a club, an association, or a commission or other organization of any kind.

Property means any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share and a chose in action, but does not include money.

Registrant means a person that is registered or required to be registered for the GST/HST.

New measures for digital economy businesses are in effect as of July 1, 2021 . Digital economy businesses, including platform operators, may have new potential GST/HST obligations under these new measures. This means these businesses may have new obligations, including registering, charging, collecting and reporting the GST/HST .

Service means anything other than:

anything that is supplied to an employer by an employee in the course of employment

Supply means the provision of property or a service in any way, including sale, transfer, barter, exchange, licence, rental, lease, gift, or disposition.

Taxable supply means a supply that is made in the course of a commercial activity and is generally subject to the GST/HST (including zero-rated supplies).

Zero-rated supplies are supplies of property and services that are taxable at the rate of 0%. This means there is no GST/HST charged on these supplies, but GST/HST registrants may be eligible to claim ITCs for the GST/HST paid or payable on property and services acquired to provide these supplies.

The goods and services tax (GST) is a tax that applies to many supplies of property and services made in Canada .

The participating provinces harmonized their provincial sales tax with the GST to implement the harmonized sales tax (HST) in those provinces. Generally, the HST applies to the same base of property (for example, goods) and services as the GST. In some participating provinces, there are point-of-sale rebates equivalent to the provincial part of the HST on certain qualifying items. For more information, see Guide RC4022, General Information for GST/HST Registrants .

GST/HST registrants who make taxable supplies (other than zero‑rated supplies) in the participating provinces collect tax at the applicable HST rate. GST/HST registrants collect tax at the 5% GST rate on taxable supplies they make in the rest of Canada (other than zero-rated supplies). Special rules apply for determining the place of supply. For more information on the HST and the place-of-supply rules, see 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 .

The HST rate can vary from one participating province to another. For the list of all applicable GST/HST rates, go to GST/HST calculator (and rates) .

How does the GST/HST work?

If you are a GST/HST registrant, you generally have to charge and collect the GST/HST on taxable supplies (other than zero-rated supplies) you make in Canada . You must also file regular GST/HST returns to report that tax.

You can generally claim an ITC on your GST/HST return to recover the GST/HST paid or payable on purchases and expenses to the extent you use, consume, or supply them in your commercial activities .

For the consumer, there is no difference between zero-rated and exempt supplies of property and services because tax is not collected in either case. However, one of the differences for you, as the registrant, is that although you do not collect the GST/HST on zero-rated or exempt supplies of property and services, you can only claim ITCs for the GST/HST paid or payable on purchases acquired to make zero-rated supplies of property and services.

Taxable and exempt supplies

Exempt You do not charge the GST/HST You cannot claim ITCs

When you fill out your GST/HST return, deduct your ITCs from the GST/HST you charged your customers. The result is your net tax.

If the total amount of tax you charged is more than the amount of your ITCs, send the CRA the difference. If the total amount of tax you charged is less than the amount of your ITCs, you can claim a refund.

For more information, see Guide RC4022, General Information for GST/HST Registrants . If you are a non‑resident, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non‑Residents .

Generally, GST/HST registrants have to collect the GST/HST on all taxable (other than zero-rated) supplies of property and services they provide to their customers.

Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services (other than zero-rated supplies). However, in some situations, Indians, Indian bands and band-empowered entities are relieved of paying the GST/HST on taxable supplies. In addition, some groups and organizations, such as certain provincial and territorial governments, do not always pay the GST/HST on their purchases. For more information, go to GST/HST for businesses .

We recognize that many Indigenous peoples in Canada prefer not to be described as Indians. However, the term Indian is used because it has a legal meaning in the Indian Act .

Taxable supplies

Most property and services supplied in or imported into Canada are subject to the GST/HST.

The following are examples of taxable, other than zero-rated, supplies (for the list of all applicable GST/HST rates, go to GST/HST calculator (and rates) :

hotel and other short-term accommodation in Canada
convention space and meeting rooms
services provided by travel agents (with some exceptions)
domestic tour packages
most domestic passenger transportation by bus, train, ship, or aircraft
trans–border air travel to the continental United States and the islands of St. Pierre and Miquelon
international day trips by road or rail
car rentals in Canada
a service of ticket cancellation for domestic travel services
taxi rides and commercial ride-sharing services
restaurant meals
most admissions to theatres, museums, and other places of amusement

Some supplies are zero-rated under the GST/HST – that is, GST/HST applies at a rate of 0%. This means that you do not charge GST/HST on these supplies, but you may be eligible to claim ITCs for the GST/HST paid or payable on property and services acquired to provide these supplies. The following are examples of supplies taxable at 0% (zero-rated):

basic groceries such as milk, bread, and vegetables
prescription drugs and drug-dispensing services
certain medical devices such as hearing aids, and artificial teeth
feminine hygiene products
international passenger air travel, except to the continental United States and the islands of St. Pierre and Miquelon
international passenger transportation by road and rail, except day trips
most property and services supplied in Canada when exported under certain circumstances

For more information, see GST/HST Memoranda Series, Chapter 4, Zero-Rated Supplies .

Some supplies are exempt from the GST/HST – that is, no GST/HST applies to them. This means that you do not charge the GST/HST on these supplies of property and services, and you are generally not entitled to claim ITCs on property and services acquired to provide these supplies. Generally, you cannot register for the GST/HST if your business provides only exempt supplies; one exception is if you are a listed financial institution resident in Canada.

The following are examples of exempt supplies:

most long-term residential accommodation (of one month or more) and residential condominium fees
accommodation rented for $20 or less for each day of occupancy
travel insurance provided by an insurance company
ferry services (other than zero-rated) and the use of toll highways and toll bridges
municipal transit services
child care services where the primary purpose is to provide care and supervision to children 14 years of age or under for periods less than 24 hours per day. This does not include a service of supervising an unaccompanied child made by persons who provide taxable passenger transportation services .

Should you register?

You have to register for the GST/HST if both of the following apply:

you provide taxable supplies in Canada (other than as a non-resident who does not carry on business in Canada)
you are not a small supplier

If you are a sponsor of a foreign convention, special rules apply. For more information, see Foreign conventions .

Generally, you are a small supplier if the total amount of all revenues (before expenses) from your worldwide taxable supplies from all your businesses and those of your associates, is $30,000 or less ($50,000 for public service bodies) over the last four consecutive calendar quarters and in any one calendar quarter.

In determining the total amount of revenues from taxable supplies (including zero-rated supplies) of property and services made inside and outside Canada by you and your associates, do not include revenues from supplies of financial services, sales of capital property, and goodwill from the sale of a business. For examples of supplies that need to be included in this calculation, see Taxable supplies .

Taxi operators, commercial ride-sharing drivers and non-residents (other than a person registered under Subdivision e of Division II) who enter Canada to sell admissions to a place of amusement, a seminar, an activity, or an event have to register for the GST/HST, even if they are small suppliers.

Although you generally do not have to register if you are a small supplier , you may be able to register voluntarily. If you register, you must charge the GST/HST on your taxable supplies of property and services and report that amount on your GST/HST return. You can also claim ITCs for the GST/HST paid or payable on purchases related to these supplies. You have to stay registered for at least one year before you can ask to cancel your registration.

If you choose not to register, you cannot charge the GST/HST, and you cannot claim ITCs.

For more information, go to GST/HST for businesses or see Guide RC4022, General Information for GST/HST Registrants , or Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents .

If you are a GST/HST registrant, you have to file a GST/HST return for each reporting period (either monthly, quarterly, or annually ) to report the total amount of the GST/HST you charged your customers during the reporting period. The GST/HST you report has to include amounts you billed or invoiced, even if the amounts have not yet been paid.

As a registrant, you can also claim ITCs on your return to recover the GST/HST paid or payable on purchases and expenses made in the course of your commercial activities.

When you fill out your return, you can deduct your ITCs from the GST/HST charged. If the tax you charged your customers is more than the tax paid or payable on your purchases, remit the difference to the CRA with your return. If the tax you charged your customers is less than the tax paid or payable, you can claim a refund on your return.

For more information, go to GST/HST for businesses or see Guide RC4022 .

Accommodation and hospitality supplies

Accommodation

Generally, you have to charge the GST/HST when you rent out a suite or room in a hotel, motel, inn, boarding house, lodging house or other similar premises (collectively referred to as a hotel).

However, you do not have to charge the GST/HST if you rent a residential unit for $20 or less per day of occupancy, regardless of the rental period. A residential unit includes a house, an apartment and a suite or room in a hotel that is occupied by an individual as a place of residence or lodging under a lease, license or similar arrangement.

In addition, you do not have to charge the GST/HST if you rent a residential complex or a residential unit in a residential complex for occupancy as a place of residence or lodging by the same individual for a continuous period of one month or more.

When monthly room rentals are exempt from the GST/HST, how often the room charge is billed (for example, daily, weekly or monthly) does not change the exempt status, as long as the arrangement gives the individual or individuals continuous use or possession of the same room for at least one month.

Are long term stays at my hotel taxable?

A long term stay (a stay for continuous occupancy by the same individual for one month or longer) in a hotel is generally taxable because, in most cases, a hotel is not a residential complex.

However, under limited circumstances, a hotel could be a residential complex for GST/HST purposes and long term stays would not be taxable.

A hotel is considered to be a residential complex if more than 10% of all of the residential units in the hotel are, or are expected to be, rented for continuous possession or use of 60 days or more.

Calculation methods to determine status as a residential complex

If your hotel has rentals for less than 60 days and rentals for 60 days or more, use either the revenue method or the room supply method to determine if your hotel qualifies as a residential complex.

You can choose the method that is appropriate for your specific circumstances. Both methods are described in the example below.

The time period you can use to determine whether your hotel qualifies as a residential complex is flexible. However, the period must be reasonable for the particular rentals in question and you must use it consistently . We consider a one-year period appropriate. However, the period could differ depending on the nature of your operation, for example, a seasonal operation.

You operate a 60-room hotel. During a one-year period both situations apply:

you consistently rent 25 of the rooms for periods of less than 60 days (Type A rentals). Each of these 25 rooms is rented for a total of 300 nights during the year at a rate of $70 per night
you consistently rent the other 35 rooms for periods of 60 days or more (Type B rentals). Each of these 35 rooms is rented for a total of 200 nights during the year at a rate of $45 per night

To find out if your hotel exceeds the 10% threshold and qualifies as a residential complex, use the revenue method or the room supply method, as follows:

Revenue method

If you decide to use the revenue method, use one of the two following calculations:

This calculation is the daily revenue from Type B rentals (60 days or more) divided by the daily revenue from all rentals:

This calculation is the total revenue from Type B rentals divided by the total revenue from all rentals (in this case, for a period of one year):

Room supply method

If you decide to use the room supply method, use one of the two following calculations:

This calculation is the number of Type B rooms (60 days or more) divided by the total number of all rooms:

This calculation is the total number of nights rented for Type B rooms divided by the total number of all nights rented (in this case, for a period of one year):

In this example, the hotel qualifies as a residential complex. In this case, no matter which calculation you choose, the result is more than 10% .

This means both of the following:

you do not charge the GST/HST on a room that you rent for use as a place of residence or lodging by the same individual for a continuous period of one month or more
you have to charge the GST/HST on any room that you rent for a period of less than one month

Any room rented for $20 or less per day of occupancy remains exempt.

Accommodation – related supplies

The GST/HST applies to other supplies made to customers during their stay, regardless of the length of the stay or cost of the accommodation. These include:

room service
pay-per-view movies
telephone, photocopies, and faxes
laundry and dry cleaning

Generally, parking is taxable. However, parking is exempt if it is supplied for a period of at least one month to a guest in a residential complex and either of the following applies:

the parking space is part of the residential complex (regardless of who supplies the parking space)
the parking space is not part of the residential complex but is supplied by the accommodation provider and the use of the space is incidental to the use and enjoyment of the accommodation as a place of residence for individuals

You charge the GST/HST on food and beverages sold in dining rooms, coffee shops, bars, lounges, and convention facilities and on food and beverages sold through room service.

However, the following supplies of food are zero-rated:

pre-packaged for sale to consumers in quantities of six or more single servings
not pre-packaged for sale to consumers, and a consumer purchases six or more single servings at a time

A point-of-sale rebate of the 8% provincial part of the HST payable on qualifying prepared food and beverages is available in Ontario. For more information, see GST/HST Info Sheet GI-064, Harmonized Sales Tax for Ontario – Point-of-Sale Rebate on Prepared Food and Beverages .

The GST/HST applies to most supplies of food and beverages catered in banquet and meeting rooms, or at on-site locations. This means that you charge and collect the GST/HST on such things as prepared platters, hot meals, and beverages. Wine-corking and any other supplies made to cater a banquet or meeting function are also taxable at the applicable GST/HST rate.

Gratuities that customers voluntarily give to employees are not taxable for GST/HST purposes. However, if you include a gratuity as part of the charge for a taxable service on an invoice to your customer, the GST/HST applies to the service charge.

Your sales invoice for a banquet dinner is $1,000 plus a 15% gratuity (service charge) of $150. You charge the GST/HST on the total invoice of $1,150.

Do not collect the GST/HST when a customer gives you a deposit towards a taxable purchase. Collect the GST/HST on the deposit when you apply it to the purchase price.

If the customer does not make the purchase and loses the deposit, the forfeited deposit is subject to the GST/HST. If the customer is a GST/HST registrant, the customer can claim an ITC for the GST/HST paid on the forfeited deposit.

Calculate the GST/HST on the forfeited deposit as follows:

The GST is equal to the forfeited amount multiplied by 5/105
13/113 where the rate of 13% applies
15/115 where the rate of 15% applies

In April 2022, an organization gave you a deposit of $500 to reserve convention space in Calgary, Alberta. Later, the organization cancelled the contract and forfeited the deposit. We consider you to have collected, at that time, GST equal to 5/105 of the amount of the deposit. This means that you have to include $23.81 (5/105 × $500) in the line 105 calculation of your GST/HST return when you file electronically for the reporting period in which the amount was forfeited (or on line 103 if you file a paper return).

If the forfeited deposit was for convention space in a participating province, you would have to include an amount in the line 105 calculation of your GST/HST return when you file electronically for the reporting period in which the amount was forfeited (or on line 103 if you file a paper return) calculated using the applicable tax fraction for the participating province:

$57.52 (13/113 × $500) where the HST rate of 13% applies
$65.22 (15/115 x $500) where the HST rate of 15% applies

If the customer who forfeited the deposit is a GST/HST registrant, the customer may be entitled to claim an ITC for the GST/HST included in the forfeited amount when all of the other conditions for claiming an ITC are met because the customer is considered to have paid that tax.

Coupons, gift certificates, and discounts

Reimbursable coupons are usually called manufacturers’ coupons . They entitle the customer to a reduction of a fixed dollar amount on the purchase price. Vendors can expect to be reimbursed an amount by the manufacturer or another third party for accepting these coupons from customers. The value of the coupons includes the GST/HST, when used to purchase taxable supplies (other than zero-rated supplies). For example, a chain of hotels (franchisor) may reimburse a franchisee that redeems coupons that entitle a guest to a reduction of a fixed dollar amount for a night's stay at one of the chain's hotels.

When you, as a vendor, accept a reimbursable coupon from a customer, you treat the coupon the same as cash. If the purchase is subject to tax, you charge the GST/HST on the full price of the item and then deduct the value of the coupon. We consider you to have collected a portion of the GST/HST equal to the tax fraction of the value of the coupon.

Report the GST/HST charged on your sales when you prepare your GST/HST return. The value of the coupon does not have to be reported separately.

A customer used a $10 reimbursable coupon towards a product bought in February 2022 in Manitoba.

Price of product

GST ($25.00 × 5%)

Less reimbursable coupon value

Customer pays

Report $1.25 on your GST/HST return for the GST charged on the sale.

The tax fractions are as follows:

5/105 for the GST
13/113 for the HST where the rate of 13% applies
15/115 for the HST where the rate of 15% applies

The manufacturer who reimburses you can also claim an ITC (other than for zero-rated supplies) for the tax fraction of the coupon value. However, you, as the vendor who accepts the reimbursable coupons from the customer, cannot claim any ITCs for these coupons since you are reimbursed the tax by the manufacturer.

These are coupons that you, as the vendor, issue and accept, and for which no one reimburses you. They entitle the customer to a reduction in the price for a fixed dollar amount or a fixed percentage amount. As the issuer, you have the option to include the GST/HST in the value of the coupons when the coupons are used to purchase taxable property or services (other than zero-rated property or services).

If you choose to include the GST/HST in the value of the coupons, you treat them the same way as reimbursable coupons. This means that you charge and remit the GST/HST on the full price of the property or service and you can claim an ITC calculated on the tax fraction of the coupon value. Your coupon should state that the GST/HST is included in the value.

You operate in Halifax, Nova Scotia and you accept a non-reimbursable coupon that includes 15% HST.

Total price of item

HST ($30.00 × 15%)

Less coupon value

Report $4.50 as HST charged for the sale on your GST/HST return. You can claim an ITC of $1.30 (15/115 x $10).

If you choose not to include the GST/HST in the value of your coupons, deduct the coupon value from the selling price before calculating the GST/HST.

In this case, when you file your GST/HST return, report the GST/HST you charged on the net price, which is the price after you deduct the coupon value. You cannot claim ITCs for coupons you issue that do not include the GST/HST .

You operate in Ontario, and you accept a non-reimbursable coupon that does not include the GST/HST.

HST ($20.00 × 13%)

Report $2.60 as HST charged for the sale on your GST/HST return.

Other coupons (whether reimbursable or not) that are not for a fixed dollar amount may do any of the following:

offer a different percentage off the price of an item (such as 10% off the purchase of 5 or less boxes and 20% off the purchase of 6 or more boxes)
offer an item for no charge if another item is purchased (such as two-for-one coupons)
contain more than one monetary discount such as 25¢ off a 750 ml soft drink or 50¢ off a 1.5 litre soft drink

These coupons reduce the selling price of an item before the GST/HST is added. Therefore, deduct the value of the coupons from the selling price before calculating the GST/HST.

Two customers present a two-for-one coupon for their restaurant meals. They pay $9.95 for one meal and get the second meal free. You charge the GST/HST on $9.95.

A gift certificate (including gift cards and online gift certificates) is generally a voucher, receipt, or ticket that meets all of the following conditions:

has a stated monetary value or is for a particular supply of property or a service
is issued or sold for consideration
is accepted as payment or partial payment of the consideration for a supply of property or a service
has only to be presented as a means of payment without any obligation imposed on the holder
has no intrinsic value

Do not collect the GST/HST on the sale of a gift certificate. When a customer gives you a gift certificate towards a purchase, calculate the GST/HST on the price of the item and deduct the amount of the gift certificate as if it were cash.

You sell a taxable item in Alberta for $100, and the purchaser gives you a $20 gift certificate toward the purchase.

Price of item

$100

Plus GST ($100 × 5%)

$105

Less gift certificate

For more information about gift certificates, see GST/HST Policy Statement P-202, Gift Certificates .

Do not charge the GST/HST on property and services you offer free of charge. Generally, if you offer a discount, the GST/HST applies on the price after the discount. For example, if a room rate is regularly $99 and you offer a weekend special rate of $79, charge the GST/HST on $79 for that special rate.

A hotel may enter into an agreement with other businesses, such as restaurants or parking lots, where the other business agrees to provide property or services to the hotel's guests but the amount payable by the guest is included on the bill issued by the hotel. Depending on the terms of the agreement, the hotel may be purchasing the property or services and selling them to their guests or acting as an agent in making a transaction on behalf of the other business.

Whether a hotel is acting as an agent is a question of fact and depends on the terms of the agreement between the parties involved. For more information, see GST/HST Info Sheet GI-012, Agents .

A hotel does not have enough parking spaces for all of its guests. It enters into an agreement with the operator of a parking lot situated nearby to allow guests to use its parking spaces. The agreement provides that the parking lot operator will invoice the hotel on a monthly basis for the use of the parking spaces. The hotel invoices the guest by including the parking charges on the guest's hotel bill. The hotel is making the supply of the parking space. It is not acting as an agent of the operator of the parking lot.

The hotel reports the total amount of GST/HST charged for the room and parking on its GST/HST return. The hotel can also claim an ITC for the GST/HST paid or payable to the parking lot operator for the parking charges.

Passenger transportation services

This section gives information on how the GST/HST applies to domestic and international passenger transportation services. Before explaining whether a passenger transportation service is subject to the 5% GST or the HST at the applicable rate, several terms need to be defined.

Terms used in this section

A passenger transportation service is any mode of transportation available to the public, such as transportation by bus, taxi, train, aircraft, boat or motor vehicle as long as there is all of the following:

a mode of conveyance
an operator of the conveyance independent of the traveller
an itinerary

Generally, an itinerary describes all elements of a journey, including origin, termination, stopovers, dates and times of arrivals and departures, and all modes of conveyance throughout the journey.

Ski lifts, horseback rides, hot-air-balloon rides, and hang gliding are not considered passenger transportation services. Vehicle rentals that the traveller operates and controls, such as automobiles, motor homes, motorcycles, bicycles, snowmobiles, all-terrain vehicles, and other recreational vehicles, are also not considered to be passenger transportation services.

Continuous journey of an individual or a group of individuals means the set of all passenger transportation services provided to the individual or group for which a single ticket or voucher for all of the services is issued. A continuous journey also exists where two or more tickets or vouchers are issued for two or more legs of a single journey of the individual or group on which there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued, and all the tickets or vouchers are issued by the same supplier or by two or more suppliers through one agent acting on behalf of all the suppliers, provided that either:

all such tickets are supplied at the same time and evidence satisfactory to the Minister is maintained by the supplier or agent that there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued
the tickets or vouchers are issued at different times and evidence satisfactory to the Minister is submitted by the supplier or agent that there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued.

Origin means, in respect of a continuous journey, the place where the passenger transportation service that is included in the continuous journey and that is first provided begins.

For the purpose of determining if a supply of passenger transportation services may be zero-rated , a stopover, for a continuous journey of an individual or a group of individuals, means any place at which the individual or group embarks or disembarks a conveyance used in the provision of a passenger transportation service included in the continuous journey, for any reason other than transferring to another conveyance or to allow for servicing or refuelling of the conveyance. A stop between two legs of a journey that is 24 hours or less is not considered a stopover and will not affect whether the legs are part of a continuous journey.

However, for the purpose of determining the province where a supply of passenger transportation services is made, a stopover does not include, in the case of a continuous journey of an individual or group of individuals that does not include transportation by air and the origin and termination of which are in Canada , any place outside Canada where, at the time the journey begins, the individual or group is not scheduled to be outside Canada for an uninterrupted period of at least 24 hours during the course of the journey.

A registered tour operator sold a traveller a one-way rail ticket from Halifax to Moncton, and, at the same time, a one-way bus ticket from Moncton to Boston.

If the traveller is scheduled to leave on the bus within 24 hours of arriving in Moncton, both the bus and rail tickets are part of a continuous journey from Halifax to Boston even though separate tickets were issued for each mode of transportation. The tour operator keeps documentation showing that there is no stopover between any legs of the journey.

Termination for a continuous journey

The termination of a continuous journey means the place where the passenger transportation service that is included in the continuous journey and that is last provided ends.

Taxation area means Canada, the United States (except Hawaii), and the islands of St. Pierre and Miquelon.

Domestic passenger transportation services

Generally, the GST/HST applies to all passenger transportation services provided in Canada. This includes transportation by bus between two Canadian cities.

Municipal transit services and most domestic ferry services are exempt from the GST/HST.

However, a domestic passenger transportation service may be zero-rated if it is part of a continuous journey that has an international element. For more information, see Sales of domestic passenger transportation services to travel providers and International passenger transportation services .

The tax that applies depends on the province in which you supply the domestic passenger transportation service.

If the passenger transportation service is supplied:

in a participating province, the supply is subject to the HST
in a non-participating province, the supply is subject to the GST

Place of supply of p assenger transportation service that is part of a continuous journey

Generally, a passenger transportation service that is part of a continuous journey is made in the province in which the continuous journey originates if the termination and all stopovers are in Canada. If the termination or a stopover is outside Canada, the passenger transportation service is made in a non-participating province.

A person purchases a return flight from Ottawa, Ontario to Edmonton, Alberta. Both flights are made in Ontario because the continuous journey begins in Ontario and there is no termination or stopover outside Canada.

A person purchases a return flight from Halifax, Nova Scotia to Boston, United States. Both flights are made in a non-participating province because there is a stopover outside Canada.

Passenger transportation service that is not part of a continuous journey

A passenger transportation service that is not part of a continuous journey is made in the province in which the service originates. However, if the passenger transportation service ends outside Canada, the service is made in a non-participating province.

A domestic passenger transportation service supplied to a travel provider, such as a non-resident tour operator, is zero-rated if both of the following conditions are met:

the travel provider resells the domestic transportation service to an individual as part of a continuous journey under which all transportation services are zero-rated
the individual uses the transportation as part of a continuous journey under which all transportation services are zero-rated

The supplier must get proof from the travel provider that the transportation service was resold as part of a continuous journey under which all transportation services were zero-rated. Acceptable proof includes a passenger list, a tour itinerary, and a certificate of zero-rated entitlement.

The passenger list must contain the names and addresses of the travellers. However, the supplier can agree that the travel provider can keep the passenger list and provide it on request.

The following certificate of zero-rated entitlement is an example of the information required.

To:_________________________________________________________________ (name and address of registered supplier of transportation service) We hereby certify that the following passenger transportation services that we have purchased from you, namely: ___________________________________________________________________ (detailed description of the required services the supplier will provide) will be included in one or more continuous journeys or tour packages, and will qualify for zero-rated status under the Excise Tax Act. We will pay the GST/HST at the applicable rate in respect of any transportation service found to be taxable at the applicable rate during an audit of ___________________________________________________________________ (name of registered supplier) Dated at________________________this___________day of__________20___ ___________________________________________________________________ Signature of authorized officer of recipient ___________________________________________________________________ Name of recipient or authorized representative ___________________________________________________________________ Title of authorized representative

The supplier must determine whether all criteria to zero-rate the transportation services in the continuous journey are met, or whether the GST/HST at the applicable rate has to be charged. If the supplier determines that a domestic passenger transportation service does not meet the zero-rating criteria, the travel provider has to pay the applicable GST/HST to the supplier.

Sometimes the sale of the domestic passenger transportation service happens before the travel provider assembles and sells the continuous journey or tour package containing the transportation services to individual travellers. In this case, the supplier can accept an interim certificate or other declaration of intent from the travel provider. The travel provider must follow up on the interim document with proof that all criteria for zero-rated status have been met.

If later it is determined that the domestic passenger transportation service does not meet the zero-rating criteria, as previously thought, the supplier has to charge and collect the GST/HST on that supply. If the supplier has already filed its return for the reporting period in which it made that supply, it has to ask that the previously filed return be amended to include the GST/HST on that supply. Interest will apply on any amount due as a result of the amendment. To ask for an amendment to a return, write to your tax services office with the details.

If you have charged tax on a domestic passenger transportation service that meets the zero-rating criteria, you can refund the amount charged as tax to the client if all the refund criteria are met.

International passenger transportation services

In many cases, passenger transportation services can be zero-rated if they are part of a continuous journey that meets certain conditions. These conditions are different depending on whether air travel is included in the continuous journey.

A domestic passenger transportation service is zero-rated if it is provided to an individual (or group of individuals) as part of a continuous journey that includes air travel and any one of the following applies:

the origin of the continuous journey is outside Canada but inside the taxation area. For example, if the origin of a continuous journey is in the continental United States, all passenger transportation services in that journey are zero-rated because the origin is outside Canada but inside the taxation area
the origin or termination of the continuous journey or any stopover during the continuous journey is outside the taxation area
the origin, termination, and all stopovers during the continuous journey are outside Canada
all places where the individual or group embarks or disembarks an aircraft are outside Canada and the origin or termination of the continuous journey, or any stopover during that journey, is outside Canada.

For a continuous journey that includes air travel, as long as there is an overseas origin, termination, or stopover, all domestic passenger transportation services included in the continuous journey are zero-rated.

On behalf of several air carriers, a Canadian travel agency sells a one-way air ticket departing from Montréal, Quebec, to Tokyo, Japan. The ticket includes stops in Toronto, Ontario, and Vancouver, British Columbia, for two days each.

All of the transportation services in this journey are zero-rated because they are part of a continuous journey and there is an overseas destination. The Canadian stopovers do not cause the continuous journey to end because only one ticket was issued for all services provided.

A person buys a return air ticket with a routing from Halifax, Nova Scotia, to Paris, France. The supply of the flight is zero-rated because the continuous journey has a stopover in France, which is outside the taxation area.

Continuous journey that does not include air travel

Generally, the GST/HST applies to trans–border day trips (without air travel) when both the origin and termination are in Canada and the traveller is not scheduled to be outside Canada for more than 24 hours.

A trans-border day trip originating in a non-participating province is generally subject to the GST. Such a trip originating in a participating province is generally subject to the HST. Examples of taxable trans-border day trips taxable at the applicable rate include:

a bus tour beginning and ending in Canada, which starts in New Brunswick and has a stop in the state of Maine (subject to the HST)
a one-day, round-trip bus excursion from Alberta to the state of Montana (subject to the GST)
a one-day fall bus round-trip excursion from Montréal, Quebec, to the state of New Hampshire (subject to the GST)

However, if a passenger transportation service (other than one that is included in most trans-border day trips) is provided to an individual (or group of individuals) as part of a continuous journey that does not include air travel , that domestic passenger transportation service will be zero-rated if one of the following applies:

the origin or termination of the continuous journey is outside Canada
there is a stopover outside Canada

A stopover in Canada will not affect the zero-rated status of transportation services if all of those services are provided on a single ticket or voucher.

This includes transportation by bus or train between Canada and the United States. However, it does not apply when the transportation is included in a trans–border day trip, mentioned earlier in this section.

The following services, if provided by the same supplier of the passenger transportation service, will have the same tax status as that transportation service:

a service of issuing, delivering, amending, replacing, or cancelling a ticket, voucher, or reservation for a taxable transportation service supplied in Canada
a service of supervising an unaccompanied child
a service of transporting an individual's baggage

This means that if you provide one of these other services listed above with a transportation service that you also provide, the GST/HST will apply to the other service as follows:

if the transportation service is subject to the GST, that other service is subject to the GST
if the transportation service is subject to the HST, that other service is subject to the HST
if the transportation service is zero-rated, that other service is also zero-rated

If the passenger transportation services in a continuous journey are zero-rated, a service of supervising an unaccompanied child will also be zero-rated if it is provided during one or more legs of the child's continuous journey.

An air carrier provides a continuous journey for a child consisting of a flight from Edmonton, Alberta, to Vancouver, British Columbia, and a second flight from Vancouver to Tokyo, Japan. Since the child will be unaccompanied on the flight from Edmonton to Vancouver, the carrier also provides a service of supervising the child on that flight. The service is zero-rated because it is provided with a zero-rated passenger transportation service. The service is zero-rated even if the carrier does not supervise the child during the leg of the journey from Vancouver to Tokyo.

If the service mentioned above is not supplied with a passenger transportation service, it has to be separately considered to determine which tax rate applies.

If, while providing a passenger transportation service in Canada, you sell taxable property and services on board a conveyance during a leg of a journey, the supply is made in the province in which that leg of the journey begins. Therefore, if that leg begins in a non-participating province, the supply is subject to the GST. If that leg begins in a participating province, the supply is subject to the HST at the rate in effect in that province.

Leg of a journey on a conveyance means a part of the journey that begins where passengers embark or disembark the conveyance or where it is stopped to allow for its servicing or refuelling and ends where it is next stopped for any of those purposes.

A traveller buys an airline ticket for travel from Halifax, Nova Scotia, to Winnipeg, Manitoba, via Ottawa, Ontario. The traveller buys a glass of wine on the first leg of the journey to Ottawa, Ontario. The traveller has to pay the HST at the rate of 15% on the glass of wine because that leg of the journey begins in Nova Scotia. If the traveller buys another glass of wine on the second leg of this flight, HST at the rate of 13% also applies because that leg of the journey begins in Ontario.

For GST/HST purposes, an international flight means any flight (other than a flight originating and terminating in Canada) of an aircraft that is operated by a person in the course of a business of supplying passenger transportation services. Similarly, an international voyage means any voyage (other than a voyage originating and terminating in Canada) of a vessel that is operated by a person in the course of a business of supplying passenger transportation services.

If you supply goods or services to the individual on the aircraft or vessel on an international flight or voyage, the supply is considered to be made outside Canada and is not subject to the GST/HST if:

in the case of goods, physical possession of the goods is transferred to the individual on board the aircraft or vessel
in the case of services, the services are wholly performed on the aircraft or vessel

Travel agencies

Travel agencies usually act as agents for selling property and services on behalf of other businesses, such as airlines and hotels, and receive a commission for their services.

Travel agencies may also be suppliers of property and services. For example, if you are a travel agency that buys a block of airline flights and hotel rooms for resale, you are not acting as an agent. You are the supplier of those flights and rooms. If the flights and rooms are taxable (other than zero-rated), you have to charge and report the GST/HST on those sales.

For the purposes of this page, travel providers include travel agents, hotels, air carriers, tour operators, and cruise operators. A person that buys travel services or tour packages in the course of their business to resell is considered to be a travel provider.

When do I charge tax on commissions?

If you are acting as an agent, the GST/HST applies to your commissions, unless the services you provide are zero-rated (or you are making an exempt supply of arranging for the insurer’s issuance of an insurance policy). However, if you are an independent travel agent registered for the GST/HST and you provide services to a travel agency, your services to the travel agency are generally subject to the GST/HST even if, on behalf of the travel agency, you make zero-rated supplies.

When are my services zero-rated?

Your service is zero-rated when you act as an agent for a person providing passenger transportation services in any of the following situations:

selling a zero-rated passenger transportation service for them
selling a service of transporting an individual's baggage for them in connection with a zero-rated passenger transportation service
selling a service of supervising an unaccompanied child for them in connection with a zero-rated passenger transportation service
issuing, delivering, amending, replacing, or cancelling a ticket or reservation for a zero-rated passenger transportation service on their behalf

Also, if you are a travel agency acting as an agent for a non-resident person, your service is zero-rated in either of the following situations:

the service relates to a sale made outside Canada by or to the non-resident
the service relates to a zero-rated sale of exported property or services to the non-resident

On behalf of an air carrier, a Canadian travel agency sells a passenger transportation service from Toronto, Ontario, to Paris, France. Since the transportation service is zero-rated, the commission the airline pays to the Canadian travel agency for its service is zero-rated.

A Canadian travel agency reserves accommodation at a hotel in France for an individual. The hotel pays the travel agency a commission. Since the supply of the accommodation is made outside Canada, the commission the hotel pays to the Canadian travel agency is zero-rated.

Which rate of tax applies – GST or HST?

Generally, if the travel agency's service is performed in whole or in part in Canada, the service is considered to have been supplied in Canada and is subject to the GST/HST at the applicable rate.

For a travel agency's taxable (other than zero-rated) services supplied in Canada, the tax that applies will depend on whether the agency's services are supplied in a participating or a non-participating province.

If the service is supplied:

Place-of-supply rules apply to determine whether a supply that is made in Canada is made in a participating province or a non-participating province.

Place-of-supply rules for travel agencies' services

The general place of supply rules for services are subject to specific place of supply rules for certain services such as for supplies of services in relation to certain types of property, as described later in this section. A supply of a service is generally made in a province where the supplier obtains a single home or business address of the recipient in the ordinary course of its business and that address is situated in that province. Where the supplier does not obtain any home or business address of the recipient in the ordinary course of its business, but obtains another single address in Canada of the recipient, that address will be used in determining the place of supply.

Where, in the ordinary course of its business, the supplier does not obtain an address in Canada of the recipient, the supply of services is made in a participating province if the services that are performed in Canada are performed primarily (more than 50% ) in the participating provinces. The supply is made in the participating province in which the greatest proportion of the service is performed.

In the case where the greatest proportions of the service are performed equally in two or more participating provinces and it therefore cannot be determined in which participating province the greatest proportion of the service is performed, the HST will apply at the rate that is highest among those participating provinces.

If the services are performed primarily in the non-participating provinces or are performed equally in participating and non-participating provinces, the supply of services is made in a non-participating province and will be subject to the GST at 5%.

A supply of a service in relation to real property that is situated in Canada and is situated primarily in the participating provinces is made in the participating province in which the greatest proportion of the real property that is situated in the participating provinces is situated.

If this rule does not result in the determination of a single participating province because the greatest proportions of the real property are equally situated in two or more participating provinces, the supply of the service is made 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 of the HST, HST will be required to be charged by the supplier using that particular rate.

A supply of a service in relation to real property that is situated in Canada and otherwise than primarily (50% or less) in participating provinces is made in a non-participating province.

A travel agency in Yarmouth, Nova Scotia, acts as an agent on behalf of a hotel chain in Canada and receives commissions for booking accommodations at one of the hotel chain's hotels in London, Ontario. The agency charges 13% HST on the commission payable because the supply of the service is in relation to real property that is situated in the participating province of Ontario.

For more information on determining the place of supply under the general rules when multiple addresses are obtained or with respect to services in relation to real property or for other specific place of supply rules, see 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 .

If a travel agency is the supplier of travel products, the travel agency has to charge, collect, and report the GST/HST on the travel products (unless they are zero-rated).

When a travel agency is not the supplier of the travel products, but instead acts as an agent for another person who is the supplier, the travel agency only has to charge, collect, and report the GST/HST on the commission it charges (unless the supplies are zero-rated). The supplier of the travel products is responsible for charging, collecting, and reporting the GST/HST on the supply of the travel products (unless they are zero-rated). Although the supplier of the products is responsible for charging and accounting for the GST/HST, the travel agency may invoice and collect the tax from the purchaser and pass it on to the supplier.

A travel agency in Manitoba, acting as agent for an air carrier, sells two domestic airline tickets for $1,400 ($700 each) for travel from Winnipeg, Manitoba, to Calgary, Alberta. The agency collects the total purchase price for the tickets plus the GST from the purchaser (customer) for the air carrier.

The agency forwards this amount, minus its commission and the GST on that commission, to the air carrier. The agency's commission is 8.25% of the selling price of the ticket, not including the GST.

Sample invoice by travel agency

Airline tickets (2 × $700)

GST ($1,400 × 5%)

Amount paid by customer

Commission:

($115.50 × 5%) = 5.78

Amount due to air carrier:

The travel agency includes the $5.78 GST it charged the air carrier on its commission in the line 105 calculation of its electronically filed GST/HST return (or on line 103 if it files a paper return).

The air carrier includes the $70 GST that the customer paid on the airline ticket in the line 105 calculation of its electronically filed GST/HST return (or on line 103 if it files a paper return). It can also claim $5.78 as an ITC for the GST it paid on the travel agency's commission in the line 108 calculation of its GST/HST return.

Tour packages

What is a tour package.

As in any transaction, it is important to properly characterize what is being supplied to determine how the GST/HST applies to that transaction. For example, when a registrant combines two or more services or property and services together, the registrant must determine whether it is making one supply or multiple supplies and must characterize that supply or those supplies accordingly.

A tour package is a combination of two or more services or of property and services that includes transportation services, accommodation, a right to use a campground or trailer park, or guide or interpreter services when the property and services are supplied together for an all-inclusive price. A tour package is a single supply for GST/HST purposes. Generally, a tour package is a combination of various components to create something new.

However, not all combinations of two or more services, or of property and services, are considered to be tour packages. A combination that includes elements such as transportation services or accommodation may not be a tour package for GST/HST purposes. The nature and purpose of the package being sold has to be considered to determine whether it is a tour package or something else. For example, if the overall purpose of a package is to provide a specialized service (such as wellness packages, educational or counselling packages, children's overnight camps, sports tournaments, or concert tours), it is not considered to be a tour package for GST/HST purposes.

As illustrated in the following examples, the meaning of tour package could result in a combination of two or more services, or of property and services, being considered a tour package for GST/HST purposes even though the package may not fit the common perception of a tour package. However, the reverse is also possible. That is, something that may appear to be a tour package may not be a tour package for GST/HST purposes.

A registrant in Calgary, Alberta, sold a package to Japanese tourists. The package includes a meal in a restaurant, a ticket to a sports event, and the services of an interpreter. The property and services were sold together for an all-inclusive price. Although this package may not fit the common perception of a tour package, it is a tour package for GST/HST purposes.

A business in Vancouver, British Columbia, sold an all-inclusive package to international students. This package included instruction in English as a second language, books, accommodation, three meals per day, and recreational activities. This supply is an exempt service of instructing individuals in English as a second language. It is not a tour package.

What qualifies as short term or camping accommodation?

Short term accommodation means the rental of a residential unit or residential complex in Canada as a place of residence or lodging for an individual who will occupy it continuously for a period of less than one month and for which the GST/HST is payable. It includes any type of overnight shelter (except those noted on the next page) supplied as part of a tour package that also includes food and the services of a guide.

For example, overnight or week long accommodation in any of the following would usually be considered short term accommodation:

hotels and motels
resorts and lodges
bed and breakfast establishments

Short term accommodation does not include any of the following:

shelter on a train, trailer, boat, or other structure that is, or could be self propelled (for example, cruise ship cabins, train berths, houseboats, travel trailers, and all recreational vehicles)
a residential unit supplied under a timeshare arrangement
accommodation outside Canada
accommodation that costs $20 or less each day

Camping accommodation means a campsite at a campground or recreational trailer park in Canada that is rented continuously as a place of lodging for periods of less than one month to the same individual. It includes water, electricity, and waste disposal services, if provided with the campsite and accessed by an outlet or hook up at the campsite.

What qualifies as a service?

A service means anything other than property, money, and anything that is supplied to an employer by an employee in the course of employment. Some examples include:

guide or interpreter services
transportation services
sightseeing excursions
ski lessons

The following do not qualify as services because they are property:

accommodation (including a right to use a campground or trailer park)
a right to enter or attend an event, such as tickets to a show or a hockey game
car rentals
ski rentals
ski lift tickets
golf green fees
park passes

What is an all inclusive price?

All inclusive price generally means a single price for all property and services sold together in a package. However, in the tourism industry, sometimes prices for certain property or services that are included in a tour package are listed on an invoice for information purposes. The CRA accepts that such packages are sold for an all inclusive price.

A package includes round trip air transportation, hotel accommodation in Canada , guided sightseeing tours, and meals. The package was sold for an all inclusive price.

This package is a tour package for GST/HST purposes since at least one property (short term accommodation in Canada ) and services ( both the air transportation and the sightseeing tours are services) are provided for an all inclusive price.

A package includes accommodation at a bed and breakfast i n Canada , bus transportation to and from an outlet shopping center in a neighbouring city, and attendance at a festival. The package was sold for an all inclusive price.

This package is a tour package for GST/HST purposes since at least one property (short term accommodation in Canada ) and a service (intercity bus transportation) are provided for an all inclusive price.

A buyer asks that an advertised package be altered to add theatre tickets and a car rental. The advertised package included hotel accommodation in Canada and round trip air transportation. The altered package was sold for an all inclusive price.

This package is a tour package for GST/HST purposes since at least one property (short term accommodation in Canada ) and a service (air transportation) are provided for an all inclusive price.

A tour operator offers customized packages to buyers.

The tour operator offers short term accommodation in Canada , meals, air transportation, and admission ticket options. The buyers build their own package by choosing one of each option. The package was sold for an all inclusive price.

This package is a tour package for GST/HST purposes since at least one property (short term accommodation in Canada) and a service (air transportation) are provided for an all inclusive price.

A package includes short term accommodation in Canada, meals, and admission to a heritage site sold for an all inclusive price.

This package is not a tour package for GST/HST purposes. Although the package includes property (short term accommodation in Canada, meals and the admission), it does not include a service.

A hotel in Canada provides short term accommodation and a shuttle to and from a nearby casino. The shuttle is included in the room price .

This is not a tour package for GST/HST purposes because the shuttle is part of the accommodation. Therefore, this package does not include a service.

A stay at an all inclusive resort in Canada includes accommodation at the resort, meals at the resort, access to the resort swimming pool, access to the resort tennis court, and a spa service at the resort spa.

This is not a tour package for GST/HST purposes because in the case of an all inclusive resort, items such as the meals, complimentary access to the swimming pool and tennis court, and complimentary service at the resort spa are amenities that are part of the accommodation. Therefore, this package does not include a service.

An amenity is an item that plays a minor role or subordinate role, or if no part of the consideration can reasonably be attributed to it. Some examples are:

housekeeping at a hotel
baggage handling
parking in a parking lot
access to a hotel facility
complimentary transfers or shuttles to and from the accommodation and an airport, or shuttles to and from a nearby casino

How does the GST/HST apply to tour packages?

To determine the amount of the GST/HST you have to charge when you sell a tour package, you begin by identifying the tax rate(s) that would have applied to each element of that tour package if you had sold each element separately and not as part of a tour package. For each element, you have to determine in which province the supply is made.

Same tax rate

When you sell an entirely Canadian tour and all of the parts of the tour package would have been taxable at the same rate if these elements had been supplied separately and not as part of a tour package, you charge that rate on the total selling price of the tour package. You can generally claim an ITC for the GST/HST paid or payable on property and services you bought and included in the tour package.

A registrant tour operator assembles round-trip airfare, hotel accommodation, and a bus excursion into a domestic tour package. All of these elements, if supplied separately and not as part of a tour package would have been taxed at 5% (GST). The tour operator adds a 20% mark-up to the cost (not including the GST) of the elements in the package.

Tour operator's purchases

3 double hotel rooms in Saskatoon

6 airline tickets

6 bus tickets – excursion

Subtotal

GST ($2,900 × 5%)

Tour operator pays

Tour operator's charges

Cost after claiming ITC of $145

20% mark-up ($2,900 × 20%)

GST ($3,480 × 5%)

The tour operator reports $174.00 as GST collected in the line 105 calculation of its electronically filed GST/HST return (or on line 103 if it files a paper return). It can claim the $145 of GST it incurred to assemble the tour package as an ITC in the line 108 calculation of its GST/HST return.

Combined tax rates

When you sell an entirely Canadian tour package and elements of the package would have been taxable at different rates if they had been supplied separately and not as part of a tour package, you have to consider each element separately to determine the total tax payable on the tour package. To do this, for each element, you have to consider the place-of-supply rules to determine in which province the supply is made.

A registered tour operator sold a 10-day package that included a return flight from Edmonton, Alberta to Halifax, Nova Scotia, and hotel accommodation in Halifax. The GST would have applied to the air transportation part of the package if the operator had supplied the air transportation separately because the flight originates in a non-participating province. The HST would have applied at the rate of 15% to the hotel accommodation if the operator had supplied it separately because the accommodation is supplied in the participating province of Nova Scotia. The tour operator has a 20% profit margin.

The GST taxable portion of the tour package is 40% of the total cost to the tour operator ( $600 ÷ $1,500 = 40% ). Therefore, the GST applies to 40% of the tour package selling price. The HST taxable portion of the tour package is 60% of the total cost to the tour operator ($900 ÷ $1,500 = 60%) . Therefore, the HST applies to 60% of the tour package selling price.

Therefore, the tax to be paid on the selling price of the tour package is as follows:

Total selling price

GST ($1,800 × 40% × 5%)

HST ($1,800 × 60% × 15%)

When you sell a tour package that includes elements that are taxable at different rates, exempt, or are supplied outside of Canada, you have to determine the tax status of each element separately (as if you were selling each element separately and not as part of a tour package). The cost of the taxable elements of the tour package then has to be prorated as a percentage of the total cost of the tour package so that you can determine the total tax payable on the selling price of the tour package.

The taxable portions of a tour package are the portions of the tour package that would be subject to the GST/HST, other than zero-rated supplies (taxable elements) if you had supplied the element separately. To calculate the taxable portions, determine in which province each element is supplied. Then, add up the elements that are subject to the same tax rate and divide each result by the total cost of property and services included in the package.

The non-taxable portion of a tour package includes elements that, if supplied separately from the tour package, would be zero-rated, supplied outside Canada, or exempt.

A registered tour operator sold a package that included a flight from Winnipeg, Manitoba, to Orlando, Florida, hotel accommodation in Orlando, and a sightseeing excursion in Orlando. The airfare element represents the taxable portion of the package on which the GST is charged.

The non-taxable portion includes the hotel accommodation and the sightseeing excursion in Orlando as they would have been supplied outside Canada if they had been supplied separately and not part of the tour package.

Round-trip flight from Winnipeg to Orlando (taxable at 5%)

Accommodation and sightseeing (non-taxable)

GST paid to suppliers ($550 × 5%)

Cost after claiming ITC of $27.50

20% mark-up ($850 × 20%)

Taxable part: Cost of taxable services ÷ total cost $550 ÷ $850 = 65% Subtotal: $1,020 × 65% = $663.00

GST on tour ($663 × 5%)

Customer pays

If some elements in the taxable portions of a tour package would have been taxed at 5% if supplied separately and not as part of the package, and some would have been taxed at different HST rates, you have to determine the percentage of the taxable portions subject to each rate of tax.

Usually, a tour operator continues to use the same percentages for each tax rate to determine the amount of tax to charge (even if a discount is offered) whenever it sells the tour package.

If the tour operator sells the tour package to another registrant tour operator, the other operator has to charge the GST/HST using the same percentage for each tax rate when it resells the tour package. The other tour operator applies these percentages to its selling price for the tour package to determine how much tax it charges. If the tour operator changes the tour package by adding or deleting elements, it is likely a new tour package and the tour operator has to recalculate the percentages. For more information, refer to GST/HST Memorandum 27.1, Calculating the GST/HST on Tour Packages .

Change in tour package

If there is a significant change in the cost of acquiring the elements included in the package, you may have to recalculate the taxable portions and the non-taxable portions before calculating the GST/HST to be charged on the tour package. For more information, refer to GST/HST Memorandum 27.1, Calculating the GST/HST on Tour Packages .

You have to keep records to show how you calculated the taxable portions of tour packages and the percentages. It is your responsibility to make sure any travel agency acting on your behalf collects the correct amount of GST/HST from your customer.

Tour operators do not charge the GST/HST on exclusively foreign tour packages. For example, a tour operator does not charge a traveller the GST/HST on a tour package that includes hotel accommodation and bus excursions in Scotland. The accommodation and excursions in Scotland are not subject to tax because they are supplied outside Canada.

Also, if airfare from Canada to Scotland is included with the accommodation and excursion in Scotland, the airfare is zero-rated and the tour operators do not charge tax.

Conventions

A convention is a formal meeting or assembly that is not open to the general public.

A convention does not include a meeting or assembly if the main purpose of which is any of the following:

to provide any type of amusement, entertainment, or recreation
to conduct contests or games of chance
to conduct the business of the convenor or attendees either in the course of a trade show that is open to the general public or other than in the course of a trade show

A convention may be either a domestic or a foreign convention. For more information, see:

Domestic conventions

Foreign conventions.

A society of professionals holds its annual general meeting at a hotel in Canada and also delivers information sessions to the attendees. The event is only open to members of the society.

This is a convention because the formal meeting and the assemblies are not open to the general public and none of the exclusions in the definition of convention apply.

An environmental association holds a trade show at a convention centre in Canada. Exhibitors set up booths to promote the sale of their products and services. The event is open to the general public.

This is not a convention because the trade show does not meet the definition of convention.

An amateur athletic association holds try-out sessions at a gymnasium in Canada to determine whether athletes qualify to participate in an international competition. The event is only open to the participating athletes.

This is not a convention because the main purpose of the sessions is to conduct contests.

The following are definitions of terms we use for conventions:

Convention facility means any real property that is rented by the sponsor or organizer of a convention for use exclusively as the site for the convention.

Exclusively , for the purposes of related convention supplies, means property or services used all or substantially all (90% or more) in connection with a convention.

Exhibitor means a person who rents exhibition space exclusively for use as a site for the promotion at a convention of the property or services provided by the exhibitor or its business.

Organizer of a convention means a person who acquires the convention facility or related convention supplies and organizes the event for the sponsor.

When a sponsor organizes its own convention or when the convention is organized by an in-house organizer, the sponsor is still a sponsor for GST/HST purposes and not an organizer.

A professional organizer, when acting as an agent of a sponsor, is not an organizer for the purposes of the Convention rebate.

Sponsor of a convention means the person who convenes the convention and supplies admissions to it.

Related convention supplies generally means property or services that were acquired, imported, or bought into a participating province by a person exclusively for consumption, use, or supply by the person in connection with a convention. They do not include any property or services that are provided for a separate charge, except if they are acquired exclusively to be consumed or used by an exhibitor in promoting its business, services, or property at the convention.

The following property and services are examples of possible related convention supplies.

hotel accommodation for use by the convention sponsor, organizer, or exhibitor, or supplied to attendees as part of the admission.

Audio-visual

audio, audio-visual, and video services, including equipment and labour associated with the technical services.

Business equipment

computers, photocopiers, desks, and chairs.

Convention materials

banners, flags, signs, papers, shields, floral arrangements, stand decorations, backdrops and other decorations, and office supplies.

Convention show services

equipment, furnishings, and labour to install such items as carpeting, tables, chairs, exhibit booths, decorative plants, draping, banners, displays, and signs.

Destination management services

local planning, management, and co-ordination services in organizing elements of the convention for the incoming organization.

Food, beverages, and catering services (rebate limited to 50% of the GST/HST paid)

food, beverages, and catering services related to the convention, including any gratuities charged.

Food, beverages, and catering services, including any gratuities charged, are not related convention supplies when supplied to exhibitors.

Memorabilia

lapel buttons, billfolds, key chains, pens, pencils, corsages, T-shirts, scarves, mugs, jewellery, badges, and similar promotional items.

Moving and storage services

labour and equipment to deliver exhibit materials to the assigned space, including the storage of crates during the convention.

On-site services

personnel for on-site work such as the staffing of the registration desk, photographic services, and security services.

Printed matter

identification badges
information bulletins, on-site newsletters, booklets, programs, and memoranda relating to a convention or to products displayed at a convention.

Professional services

customs brokerage, legal, accounting, and freight forwarders' services.

Simultaneous interpretation equipment

simultaneous interpretation and audio-related equipment and labour.

Speakers and educational seminars

facilitators and course materials.

Telecommunications

telephone, fax, video, audio, or computer link-ups.

Translators and interpreters

individuals who translate and interpret the languages being used.

Transportation services

chartered group transportation services used solely to transport attendees of the convention between any of the convention facilities, places of lodging for the attendees, or the transportation terminals (for example, airport shuttle services).

The following property and services are not related convention supplies:

transportation services (other than the chartered transportation services described above)
entertainment such as city tours
property and services provided to the attendees of the convention for a separate charge from the admission fee, such as souvenirs, books, and videos sold during the convention

A domestic convention is a convention held in Canada that is not a foreign convention .

Is GST/HST registration required?

If you are a resident sponsor of a domestic convention, you may be able to, or you may have to, register for the GST/HST.

If you are a non-resident sponsor of a domestic convention and are not already registered for the GST/HST, you have to register for the GST/HST before you make supplies of admissions to the convention.

For more information, see Should you register?

If you are a resident or non-resident organizer of a domestic convention, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register?

If you are an exhibitor at a domestic convention and you are resident in Canada, you may be able to, or you may have to, register for the GST/HST. For more information, see Should you register?

If you are a non-registered, non-resident exhibitor who is in Canada only to promote your products or services at a convention, you do not have to register for and charge the GST/HST on any orders taken from attendees during the convention. However, if you bring products to the convention to sell to attendees, you may be considered to be carrying on business in Canada and may have to register. For more information, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents .

A rebate may be available to non-resident, non-registered exhibitors for the GST/HST paid on related convention supplies (other than food or beverages) and on the lease of space at the convention site. For more information, see Rebate for non-resident exhibitors .

Charging tax for domestic conventions

This section gives information on how the GST/HST applies to the following supplies for domestic conventions:

convention facilities
related convention supplies
exhibition space

If you are the operator of a convention facility in Canada and a GST/HST registrant, you have to charge the GST/HST when you lease out space. This applies whether you are leasing to a resident or a non-resident of Canada.

If you are a registrant, you have to charge the GST/HST on the admissions you sell to the attendees of a domestic convention.

If you are a sponsor of a domestic convention and you sell an admission to a non-resident attendee, you only have to charge the GST/HST on part of the admission.

To calculate the part of the admission that is not subject to the GST/HST, first add up the costs of acquiring the convention facility and related convention supplies (for food, beverages, or items provided under a contract for catering, include only 50% of the cost in your calculation).

Divide this result by your total convention costs. The result is the percentage of the admission that is not subject to the GST/HST when sold to a non-resident. The remainder is subject to the GST/HST when sold to a non-resident.

You are a sponsor of a domestic convention to be held in Halifax, Nova Scotia, in December 2022 and you are registered for the GST/HST. You start selling admissions to the convention in July 2022 and c harge $100 for each admission. You expect both resident and non-resident attendees.

You have to charge the HST because the convention is in a participating province.

You have to charge tax on the admissions as follows:

On admissions you sell to residents , charge the HST on the full admission.
On admissions you sell to non-residents , charge the HST on part of the admission.

For the admissions sold to non-residents, you need to calculate what part of the admission is subject to the HST. Start by calculating what part of the admission is not subject to the HST.

Your total convention expenses were $300,000, of which $210,000 was for acquiring the convention facility and related convention supplies.

You calculate the percentage of the admission that is not taxable as follows:

$210,000 ÷ $300,000 = 70%

Therefore, 70% of the admission you charge to non-resident attendees is not subject to the HST. This means that 30% (100% – 70%) of the admission you sell to non-residents is subject to the HST.

You will only charge non-residents the HST on $30 of the admission (30% of the $100 admission charge).

Canadian residents

Non-residents

HST ($100 × 15%)

HST ($30 × 15%)

If you are a sponsor of a domestic convention and you sell an admission to an Indian band or a band-empowered entity which plans to send its employees, band officials or members of the band to the convention, the convention provider does not charge the GST/HST on those admissions, where all the remaining conditions in Technical Information Bulletin B-039 , GST/HST Administrative Policy – Application of the GST/HST to Indians , are met.

While Indian individuals are entitled to acquire a right to attend a convention held on a reserve relieved of tax, they are required to pay the tax on a right to attend a convention held off a reserve.

If a convention organized by a registrant takes place on the lands of a First Nations who has imposed a First Nations Goods and Services Tax (FNGST), everyone, including First Nations and their members, pays the FNGST when acquiring the right to attend the convention. For more information, go to First Nations Goods and Services Tax .

You are a sponsor of a domestic convention to be held in downtown Toronto, Ontario, where there are no Indian reserves, and you are registered for the GST/HST. You have to charge the HST because the convention is in a participating province.

The administration officer of an Indian band calls and wants to acquire a number of admissions for employees of the band. She says that she will fax from the band office to you a copy of the certificate attesting that the acquisition is for band management activities.

You do not have to charge the HST on those admissions.

If you are a registrant, you have to charge the GST/HST on related convention supplies.

If you are the sponsor of a domestic convention, do not charge the GST/HST on related convention supplies you provide to non-resident exhibitors at the convention if you also lease exhibition space to the exhibitor.

For more information, see What is a related convention supply?

If you are a registrant, you have to charge the GST/HST when you lease exhibition space to exhibitors at the convention.

If you are the sponsor of a domestic convention, do not charge the GST/HST on the lease of exhibition space to non-resident exhibitors at the convention who will use the space exclusively as a site to promote their business, services, or property.

A foreign convention is a convention held in Canada where both of the following applies:

at the time the sponsor of the convention determines the amount to be charged for the admissions, it is reasonably expected that at least 75% of the admissions will be provided to non-residents of Canada (to determine the percentage of non-resident attendees, see below)
the sponsor of the convention is an organization whose head office is situated outside Canada or, if the organization has no head office, the member or the majority of members having management and control of the organization are non-residents

To determine the percentage of admissions reasonably expected to be provided to non-resident attendees, you could use the percentage of non-resident attendees under any of the following methods:

who attended previous conventions
who are usually invited to attend the convention
who are listed as members of the organization

You can also use any other reasonable method.

If a convention is a foreign convention because it is reasonably expected that at least 75% of the total of the admissions will be supplied to non-residents, and it is later discovered that less than 75% of the admissions were supplied to non-residents, the convention would still be considered a foreign convention.

If you are a sponsor of a foreign convention , you cannot register for the GST/HST if your only commercial activity in Canada is making sales of admissions or related convention supplies or leasing exhibition space at a foreign convention.

However, if you sell books, posters, education material, or other items at the foreign convention, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register? For information on carrying on business in Canada and GST/HST registration for non-residents, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents .

Are you already registered for the GST/HST?

If you are the sponsor of a foreign convention and you are already registered for the GST/HST, your activities related to the foreign convention are not part of your commercial activities.

This means that you do not charge the GST/HST on supplies related to the foreign convention (such as supplies of admissions, related convention supplies, and exhibition space). You also cannot claim ITC for the GST/HST you pay on purchases related to the foreign convention. However, you may be able to apply for a rebate. For more information, see Rebate for foreign conventions .

If you are an organizer of a foreign convention, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register?

If you are an exhibitor at a foreign convention and you are resident in Canada, you may be able to, or you may have to register for the GST/HST. For more information, see Should you register?

If you are a non-registered, non-resident exhibitor who is in Canada only to promote your products or services at a foreign convention, you do not have to register for and charge the GST/HST on any orders taken from attendees during the convention. However, if you bring products to the convention to sell to attendees, you may be considered to be carrying on business in Canada and you may have to register. For more information, see Guide RC4027, Doing Business in Canada – GST/HST Information for Non‑Residents .

A rebate may be available to non-resident non-registered exhibitors for the GST/HST paid on related convention supplies (other than food or beverages) and on the lease of space at the convention site. For more information, see Rebate for non-resident exhibitors .

Charging tax for foreign conventions

This section provides information on how the GST/HST applies to the following supplies for foreign conventions:

If you are a GST/HST registrant, you have to charge the GST/HST when you lease out space in Canada. This applies whether you are leasing to a resident or a non-resident of Canada.

If you are a sponsor of a foreign convention, do not charge the GST/HST on admissions you sell to the attendees of a foreign convention, even if you are registered for the GST/HST.

If you are the sponsor of a foreign convention, do not charge the GST/HST on related convention supplies you provide to exhibitors at the convention.

If you are a registrant, you have to charge the GST/HST when you lease exhibition space to exhibitors at the convention.

If you are a sponsor of a foreign convention, do not charge the GST/HST on the lease of exhibition space to exhibitors at the convention who will use the space exclusively as a site to promote their business, services, or property.

Rebate for foreign conventions

A rebate may be available for either :

sponsors of foreign conventions
organizers of foreign conventions who are not registered for the GST/HST

A rebate may also be available to non-resident exhibitors. For more information, see Rebate for non-resident exhibitors .

A sponsor and a non-registered organizer of a foreign convention can claim a rebate for each of the following:

the tax paid for the convention facilities and related convention supplies that are not food, beverages, or items purchased under a contract for catering
50% of the tax paid for food, beverages, or items purchased under a contract for catering

A sponsor or non-registered organizer of a foreign convention can apply for the rebate by sending the CRA a filled out Form GST386, Rebate Application for Conventions , or, if you are the supplier of the convention facility or related convention supplies, you may be able to pay or credit a rebate amount to the sponsor or organizer.

Only the following suppliers can pay or credit a rebate amount:

a registrant organizer can pay or credit a rebate amount to a sponsor
a registrant operator of convention facilities that is not the organizer of the convention can pay or credit a rebate amount to a sponsor or non-registered organizer
a registrant supplier of accommodation (for example, a hotel) that is not the organizer of the convention can pay or credit a rebate amount to a sponsor or non-registered organizer if the accommodation is acquired exclusively for supply in connection with a foreign convention

In any other case, the sponsor or organizer of the convention has to fill out Form GST386 and send it to the CRA to apply for its rebate.

If you pay or credit a rebate amount on the supplies, the sponsor or non-registered organizer cannot apply to the CRA for a rebate of that amount.

Documentary evidence

When you pay or credit a rebate amount, the sponsor or non-registered organizer must provide you with documentation showing it is entitled to the rebate. This could include a convention agenda, itinerary or event program, complete hotel folios, copies of invoices, and receipts or other documents that confirm that the event was a foreign convention.

Joint liability

If we determine that the sponsor or non-registered organizer was not entitled to a rebate, or that the amount paid or credited was more than the amount of the rebate the non-resident was entitled to, and you knew or ought to have known this, you and the non-resident are jointly liable to pay us any amount owing. Otherwise, only the non-resident is liable to pay us any amount owing.

If you choose to pay or credit a rebate amount, you still have to charge the full amount of the tax due on the convention facility or related convention supplies. You have to show the full amount of the tax payable by the sponsor or non-registered organizer on the invoice and also show the rebate amount you paid or credited.

The rebate amount you can pay or credit is the same as the amount that the sponsor or non-registered organizer would have received if it had paid the tax and filed a rebate claim with the CRA.

Include the full amount of the GST/HST collected or collectible from the sponsor or organizer in the line 105 calculation of your electronically filed GST/HST return (or on line 103 if you file a paper return). Then include the amount that you paid or credited in your line 108 calculation (or on line 107 if you file a paper return).

You can include the amount on any GST/HST return that is filed within one year of whichever of the following dates is later :

the last day the tax became payable
the day the rebate was paid or credited

You also have to file Form GST106, Information on Claims Paid or Credited for Foreign Conventions , by the due date of the electronically filed GST/HST return for the period in which you claim the deduction in your line 108 calculation (or on line 107 if you file a paper return). For more information, see Form GST106 .

You are the organizer of a foreign convention held in Toronto, Ontario, and you are registered for the GST/HST. You invoice the non-resident sponsor of the convention for the following services:

meals and catering
meeting rooms and convention material
exhibit decorations

Net amount payable by sponsor

Invoice total

Less rebate amount credited

Net amount sponsor pays

Your invoices have to show that you credited a rebate amount to the sponsor.

As the organizer, you include the $3,900 HST as the GST/HST collected or collectible in the line 105 calculation of your electronically filed GST/HST return (or on line 103 if you file a paper return). You include the $3,250 amount you credited as a deduction in the line 108 calculation of your return (or on line 107 if you file a paper return).

You can claim the deduction on any GST/HST return that is filed within one year of whichever of the following dates is later :

the day any tax related to the rebate became payable
the day the amount was paid or credited.

You also have to file Form GST106 Information on Claims Paid or Credited for Foreign Conventions , by the due date of your GST/HST return for the period in which you claim the deduction in your line 108 calculation (or on line 107 if you file a paper return).

For more information, see GST/HST Info Sheet GI-031, Foreign Convention and Tour Incentive Program – Registrant Organizers and Convention Facility Operators: Paying and Crediting the Rebate Amount for Foreign Conventions .

Non-registered, non-resident exhibitors who rented or leased exhibition space exclusively to promote their business or products can claim a rebate for the GST/HST paid on the following supplies, if rented or purchased from a GST/HST registrant that is not the sponsor:

related convention supplies, except for food, beverages, or items purchased under a contract for catering (see What is a related convention supply? )

Suppliers cannot pay or credit the rebate amount to non-resident exhibitors. Non-resident exhibitors have to send the CRA a completed Form GST386, Rebate Application for Conventions , within one year after the last day of the convention to claim their rebate.

Non-resident exhibitors have to pay the GST/HST on exhibition space and related convention supplies rented or purchased from a registrant that is not the sponsor.

Non-resident exhibitors do not pay the GST/HST on exhibition space or related convention supplies rented or purchased from the sponsor of the convention (whether foreign or domestic). A non-resident exhibitor that has paid tax in error on these items can ask a sponsor for a refund or credit of the amount. If the sponsor does not provide a refund or credit, the exhibitor can claim a rebate for tax paid in error. For more information, see Guide RC4033, General Application for GST/HST Rebates .

Page details

IMAGES

A Quick Look at Tax (Tourist) Refund Schemes
How to Complete a Canadian GST Return (with Pictures)
GST Official Refund Process
The Canada GST Tax Everything You Need To Know In 2022
GST Guide on the Electronic Tourist Refund Scheme (eTRS)
GST Refund: What is it and How to Claim it?

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COMMENTS

Canadian Visitor Tax Refund
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Foreign Convention and Tour Incentive Program
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General GST/HST rebate application
To claim your rebate, use Form GST189, General Application for GST/HST Rebate. You can only use one reason code per rebate application. If you are eligible to claim a rebate under more than one code, use a separate rebate application for each reason code. You may need to use Form GST288, Supplement to Forms GST189 and GST498 if there is not ...
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PDF January 2021 Visitor Rebate Program
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GST/HST Refund to Non-Residents on Eligible Tourist Packages
The tourist part offers a GST/HST refund to non-residents on eligible tourist packages (see ETA 252.1). The tourist package must cost at least $200 and make available short term accommodation and/or camping to the non-resident. The refund is half the GST/HST paid on the package adjusted down for time covered by the tourist package where ...
TaxTips.ca
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PDF Tax Refund for Visitors to Canada
accommodation at the same facility in Canada is before April 1, 2009. A refund is still available for the GST/HST paid on eligible tour packages. Use Form GST176, Application for Visitor Tax Refund, included in this pamphlet, to claim the refund if: the first night of accommodation in Canada included in the package is before April 1, 2007; or
PDF APPLICATION FOR VISITOR TAX REFUND Processed free of charge
Use this form to claim a refund of goods and services tax / harmonized sales tax (GST/HST), and Quebec sales tax (TVQ) if: • you are an individual and a non-resident of Canada; and • the total of your eligible purchases, before taxes, is CAN$200 or more. GST176 E (00) Only receipts for CAN$50 or more, are eligible for the refund. Number of ...
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Published Sept. 27, 2022 3:32 p.m. PDT. Share. A group of major Canadian retailers is asking the federal government to re-implement a Visitor Tax Refund in an effort to boost tourism and ...
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PDF APPLICATION FOR VISITOR TAX REFUND (Processed free of charge)
Visitors to Canada Use this form if you are a non-resident visitor to Canada who paid goods and services tax / harmonized sales tax (GST/HST) on eligible short-term accommodation or goods. Except for Quebec sales tax (TVQ), as explained below, sales taxes from other provinces are not eligible for this refund. We must receive your
Retailers and Landlords in Canada Ask for Tax Refund to Attract
The program proposed would allow international shoppers to reclaim the Goods and Services Tax (GST) and provincial sales tax on their purchases. The Alliance strongly believes this would boost both the number of visitors to Canada and the amount of money spent by those visitors. An ongoing decline in per-capita tourist spending had already been ...
GST115 GST/HST Rebate Application for Tour Packages
Government of Canada. All contacts; Departments and agencies; About government; Themes and topics. Jobs; Immigration and citizenship; Travel and tourism; Business; Benefits; Health; Taxes; Environment and natural resources; National security and defence; Culture, history and sport; Policing, justice and emergencies; Transport and infrastructure ...
GST refund for tourist
130 reviews. 189 helpful votes. 1. Re: GST refund for tourist. 7 years ago. That program ended 10 years ago. The only rebate now is on tour or convention GST expenses, I believe ... a category to which very few visitors would belong. Try googling " Canada Revenue Agency GST Visitor Rebate" if you are interested in further details.
GST refund for tourist
130 reviews. 189 helpful votes. 1. Re: GST refund for tourist. 6 years ago. Save. That program ended 10 years ago. The only rebate now is on tour or convention GST expenses, I believe ... a category to which very few visitors would belong. Try googling " Canada Revenue Agency GST Visitor Rebate" if you are interested in further details.
Tourist Refund Scheme (TRS)
This does not submit your claim. as a military personnel passenger on a military transport, claim a TRS refund. If you are calling the TRS from outside Australia: +61 2 6245 5499. You can claim a refund of the goods and services tax (GST) and wine equalisation tax (WET) that you pay on goods you buy in Australia.
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43,337 posts. 16 reviews. 26 helpful votes. 1. Re: Can tourist/Visitor can claim the GST Refund ? 7 years ago. As noted on your other post, you cannot.
RC4036 CANCELLED GST/HST Information for the Travel and Convention
This publication was cancelled as of 2024-01-18 and replaced with GST/HST Information for the Travel and Convention Industry. This guide explains how GST/HST applies to the Canadian travel and convention industry. It also explains the non-resident tax refund.
2024 Federal Budget analysis
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Tax refunds
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GST/HST Information for the Travel and Convention Industry
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