Definitions for GST/HST
- Added property
The term added property refers to tangible personal property or software that is a component part or is property (such as a label or a screw) that is incorporated or combined with other property. Added property also includes packing materials used in packing other goods. With the use of a valid Export Distribution Centre (EDC) certificate, a registrant is entitled to import, or acquire in Canada, property for use or supply as "added property" without having to pay the GST/HST.
It does not include goods or software added to capital property you own or to any of your property that is not for sale.
If you are a sponsor of a foreign convention, do not charge the GST/HST on admissions sold to residents and non-residents, even if you are registered for the GST/HST.
- Alcoholic beverages (for the purpose of first nations tax)
- beer, ale, stout, porter, or malt liquor containing more than 0.5% alcohol by volume;
- wine containing more than 0.5% alcohol by volume;
- any beverage containing more than 0.5% alcohol by volume that is obtained from the distillation of grains, fruit, or other agricultural products or from the distillation of beer or wine; and
- any beverage that is a combination of the above beverages, which is suitable for human consumption, and that contains more than 0.5% alcohol by volume.
Generally, when we refer to alcohol, we mean ethyl alcohol.
- All-inclusive price
Generally, an all-inclusive price 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 are listed on an invoice for information purposes. We would accept that such packages are sold for an all-inclusive price.
An allowance means any payment, periodic or otherwise, which you as a member of a partnership receive from the partnership, in addition to your partnership income, without having to account for its use. A reasonable allowance is not included in your income for income tax purposes. For example, you usually do not include an allowance for a motor vehicle in your income when it is based solely on a reasonable per-kilometre rate.
- Ancillary supply (for the purpose of public service bodies)
An "ancillary supply" means an exempt supply of property or a service for which an amount (other than a nominal amount) is paid or payable to the supplier as medical funding. Also, to be an ancillary supply, one of the following conditions must be met:
- The payment is for a service of organizing or coordinating the making of facility supplies or home medical supplies.
- The payment is for the part of property or a service (other than a financial service) used to make a facility supply. However, the supply cannot be a home medical supply or a facility supply itself.
Examples of supplies that could be ancillary supplies are laboratory and diagnostic services, centralized laundry services, and in-patient meal services.
- Arm’s length
Arm's lengh generally refers to a relationship or a transaction between persons acting in their separate interests. An arm’s length transaction is generally a transaction that reflects ordinary commercial dealings between parties acting in their own interests.
"Related persons" are not considered to deal with each other at arm’s length. For example, individuals connected by blood relationship, marriage or common-law partnership, or adoption, are related persons. A corporation and another person or two corporations may also be related persons. For more information and examples of related persons, see Income Tax Folio S1‑F5‑C1, Related persons and dealing at arm's length.
"Unrelated persons" may not be dealing with each other at arm’s length at a particular time. Each case will depend upon its own facts. The following factors are useful criteria that will be considered in determining whether parties are not dealing at arm’s length:
- the existence of a common mind which directs the bargaining for both parties to a transaction;
- the parties to a transaction are "acting in concert" without separate interests; "acting in concert" means, for example, a group acting with considerable interdependence in transactions involving a common purpose; or
- the existence of control of one party by the other by way of, for example, advantage, authority, or influence.
For more information, see Income Tax Folio S1‑F5‑C1, Related persons and dealing at arm's length.
For GST/HST purposes, an associate is generally used to describe a relationship between persons where one controls the other. An association may exist between:
- Band-empowered entity
A band-empowered entity is a corporation, board, council, association, society, or other organization that is owned or controlled by a band, a tribal council, or a group of bands other than a tribal council. This policy is applicable to those band-empowered entities situated on a reserve. A band-empowered entity is considered to be situated on a reserve when the entity maintains a presence on reserve.
An entity is considered to be owned by a band, a tribal council, or a group of bands other than a tribal council if:
- the band, tribal council, or group of bands owns all or substantially all (90%) of the shares or holds all or substantially all of the memberships of the entity; or
- the band, tribal council, or group of bands holds title to the assets of the entity or controls its disposition, such that in the event of wind up or liquidation, these assets are vested in the band.
An entity is considered to be controlled by the band, tribal council, or group or bands if:
- the band, tribal council, group of bands, or individual members of the band, tribal council, or group of bands appoint or elect a majority of the members of the governing body of the entity (for example, directors); and
- the entity is required by legislation, by-laws, or an operating agreement, to submit to the band, tribal council, or group of bands, its operating budget and where applicable, its capital budget for review and approval.
- Band management activities
Band management activities are activities or programs undertaken by a band or band-empowered entity that are not commercial activities for which they would otherwise be entitled to an input tax credit (ITC). In determining whether the acquisition of a supply is for band management, the output of the activity or program will be the determining factor, as opposed to the objectives of the activity or program. For example, a band's objective of a program may be to provide employment and training to band members. To achieve this objective, the band may form a commercial enterprise which will provide on-the-job training and also create employment. Although the band's objective is to train persons, the output is a commercial activity for which there is an entitlement to ITCs. As a result, supplies acquired for use in this band program are not considered to have been acquired for use in band management activities.
Bank, in respect of a fiscal year, means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act; but does not include an insurer.
- Basic service
Basic service means a type of service that could be performed in a customs bonded warehouse. You do not have to actually perform the service in a customs bonded warehouse, but you should be able to perform it on the goods in their present stage of processing, and in a customs bonded warehouse. Basic services include the following:
- disassembling or reassembling the goods if they have been assembled or disassembled for packing, handling, or transport;
- displaying, inspecting, labelling, packing, storing, or testing the goods;
- removing a sample of the goods for soliciting orders; and
- cleaning, diluting, normal maintenance and servicing, preserving, separating defective goods from prime quality goods, sorting or grading, trimming, filing, slitting, cutting, or complying with any applicable law of Canada or a province or territory, as long as the characteristics of the goods are not materially altered.
- Basic tax content
Basic tax content of a property generally means the amount of the GST/HST that was payable for your last acquisition of the property, and for any improvements you made to the property since that last acquisition, less any amounts that you were, or would have been, entitled to recover (for example, by rebate or remission, but not by input tax credits). The calculation for the basic tax content also takes into account any depreciation in the value of the property since you last acquired it (for example, when you purchased it or were last considered to have purchased it).
You may have to calculate the basic tax content of a property if you are a registrant and you increase or decrease your use of the property in your commercial activities.
Basic tax content formula:
(A - B) × C
A is the GST/HST payable for your last acquisition of the property and for later improvements you made to the property.
B is any rebate or refund of GST/HST you were entitled to claim or would have been entitled to claim if you had not been entitled to claim an input tax credit (ITC) for the GST/HST payable for your last acquisition of the property and for later improvements you made to it, but not including ITCs you were entitled to claim. For charities, this amount usually equals 50% of the amount in "A" above.
C is the lesser of:
- 1; and
- the fair market value of the property at the time of the change-in-use divided by the total cost (not including the GST/HST) for your last acquisition of the property and for subsequent improvements you made to it.
Builder, for the purposes of GST/HST rebates, generally includes a person who is in the business of constructing or substantially renovating houses for sale. The house may be on land owned or leased by that builder. The term "builder" may also include the following:
- a manufacturer or vendor of a new mobile home or floating home;
- a person who buys an unoccupied new house for resale;
- a person who acquires an interest in a house while the house is under construction or substantial renovation, and completes or engages another person to complete the construction or substantial renovation; or
- a person who has converted a non-residential property into a house without substantially renovating the property.
A person you hire to provide construction services on land you lease or own, and that does not have an interest in that land, is not generally considered to be a builder. For example, a contractor you hire to build your new house, or to substantially renovate your existing house, on land you own is not considered to be the builder.
- Builders who sell substantially renovated housing (for the purpose of new housing rebates)
Generally, the GST/HST applies to the sale of this housing. When you sell substantially renovated housing, the purchaser is eligible to apply for a GST/HST new housing rebate, if all of the conditions for claiming the rebate are met.
Builders substantially renovating residential property to lease
If you are a builder, and you claimed ITCs for substantially renovated housing (such as a house, a residential condominium unit, or a multiple-unit residential complex), and you rent the property as a place of residence, you are considered to have sold and at once bought back (self-supplied) the housing.
You have to calculate and pay the GST/HST based on the fair market value of the housing at the later of:
- the time of substantial completion of the building
- •when the first unit is leased to an individual
You may qualify for a new residential property rebate. The rebate will go to the person who paid the GST/HST (for example, the landlord).
Builders substantially renovating residential property to occupy
If you are a builder, and you claimed ITCs for substantially renovated housing that you occupy as a place of residence, you are considered to have made a self-supply of the residential property. You have to calculate and pay the GST/HST based on the fair market value of the housing using the self-supply rules.
You may qualify for a new residential property rebate.
A business may include a profession, calling, trade, manufacture or undertaking of any kind, whether or not the activity or undertaking is performed for profit. It also includes any activity done on a regular and continuous basis that involves providing of property by way of lease, licence or similar arrangement, but does not include an office or employment.
- Calendar quarter
A calendar quarter means a period of three months beginning on the first day of January, April, July, or October in each calendar year.
- Calendar year
Calendar year means a year that begins on January 1 and ends on December 31.
- Camping accommodation
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 for the same individual. It includes water, electricity, and waste disposal services if provided with the campsite and accessed by an outlet or hookup at the campsite.
- Canadian partnership
Canadian partnership means a partnership each member of which is a corporation or a partnership and is resident in Canada.
- Canadian rights
The Canadian rights for intangible personal property means that part of the property that can be used in Canada.
- Capital personal property
A capital personal property includes depreciable property that is eligible or would be eligible for a capital cost allowance for income tax purposes. It also includes any personal property, except depreciable property, the sale of which would result in a capital gain or loss for income tax purposes. For GST/HST purposes, capital personal property does not include property in Classes 12, 14, or 44 of Schedule II to the Income Tax Regulations.
- Capital property
Capital property generally means:
- any depreciable property that is eligible or would be eligible for a capital cost allowance deduction for income tax purposes; and
- any property, other than depreciable property, which, if you disposed of it, would result in a capital gain or capital loss for income tax purposes.
Carrier means a person who supplies freight transportation services, whether that person actually performs the services or not. A person needs only to accept responsibility as the supplier of the freight transportation service to be considered the carrier.
A person who has a contract with a shipper to move the shipper's goods from one place to another is still considered to be a carrier of the goods, even if the work is subcontracted to another person who actually performs the entire freight transportation service.
For GST/HST purposes, a person does not need a carrier licence to be a carrier. For example, if independent owner-operators of highway tractors and courier vehicles provide freight transportation services, they are carriers whether or not they are required by law to be licensed as carriers.
- Certified amount
Certified amount is the part of the purchase price (excluding any GST/HST and provincial tax) that the supplier has certified as being reasonably attributable to special features that have been incorporated into, or adaptations that have been made to, the vehicle for the purpose of its use by or in transporting an individual using a wheelchair, or to equip the vehicle with an auxiliary driving control that allows an individual with a disability to operate it.
Charity means a registered charity or registered Canadian amateur athletic association for income tax purposes, but does not include a public institution. A charity can issue official donation receipts for income tax purposes.
For the purposes of the public service bodies’ rebate, a charity also includes a non-profit organization that operates, otherwise than for profit, a health‑care facility whose purpose is to provide residents of the facility who have limited physical or mental capacity for self‑supervision and self‑care with the following:
- nursing and personal care under the direction or supervision of qualified medical and nursing care staff or other personal and supervisory care;
- assistance with the activities of daily living;
- social, recreational, and other related services to meet the psycho‑social needs of the residents; and
- meals and accommodation.
- Claim period
Claim period of a person at any time means:
- where the person is at that time a registrant, the reporting period of the person that includes that time; and
- in any other case, the period that includes that time and consists of either:
- the first and second fiscal quarters in a fiscal year of the person; or
- the third and fourth fiscal quarters in a fiscal year of the person.
A particular Canadian partnership and another Canadian partnership are closely related if all or substantially all of the interest in the other Canadian partnership is held by:
- the particular Canadian partnership;
- a corporation or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member; or
- any combination of corporations or partnerships referred to above.
Two Canadian partnerships are also closely related to each other if one:
- owns at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the other partnership is a member; or
- holds all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the other partnership is a member.
- Closely related Canadian partnerships and corporations
A Canadian partnership is considered to be closely related to a particular corporation if one of the following applies:
- at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the particular corporation are owned by:
- the partnership;
- a corporation or a Canadian partnership, that is a member of a qualifying group of which the partnership is a member; or
- any combination of corporations or partnerships referred to above;
- at least 90% of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the particular corporation is a member are owned by the Canadian partnership.
- at least 90% of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the partnership is a member are owned by the particular corporation.
- all or substantially all of the interest in the partnership is held by:
- the particular corporation;
- a corporation or a Canadian partnership that is a member of a qualifying group of which the particular corporation is a member; or
- any combination of corporations or partnerships that includes the particular corporation or another member of a qualifying group of which the particular corporation is a member;
- all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the partnership is a member is held by the particular corporation; or
- all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the particular corporation is a member is held by the partnership.
- at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the particular corporation are owned by:
In generally, two corporations are considered to be closely related if at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of one of the corporations are owned by, and under proposed changes, at least 90% of the shareholder votes in respect of every corporate matter of that corporation are held and controlled by:
- the other corporation;
- a qualifying subsidiary of the other corporations;
- a corporation of which the other corporation is a qualifying subsidiary;
- a qualifying subsidiary of a corporation of which the other corporation is a qualifying subsidiary; or
- any combination of the corporations or subsidiaries referred to above.
Two corporations that are closely related to the same corporation are closely related to each other. Also, for purposes of this definition, an investment fund that is a member of a mutual insurance group is considered to be a corporation.
For purposes of Form GST303, Application to Offset Taxes by Refunds or Rebates, the proposed changes apply as of March 22, 2017.
- Commercial activity
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; or
- 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 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.
- Commercial service
Commercial service performed on goods generally means any service performed on the goods, other than:
- a service of shipping the goods when a carrier provides the shipping; and
- a financial service.
- Computer-related services
- The computer-related service means:
- a technical support service that is provided by means of telecommunications and relates to the operation or use of computer hardware or software; or
- a service involving the electronic storage of information and computer-to-computer transfer of information.
A consideration includes any amount that is payable for a supply by operation of law.
A consignee is a person to whom the goods are to be delivered.
- Constructive importer
Constructive importer means the person to whom a specified supply of goods is made outside Canada and who does not provide the goods outside Canada before their release under the Customs Act.
Consumer refers to 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 activity or to make an exempt supply.
- Continuous inbound freight movement
The supply of a freight transportation service from one place in Canada to another place in Canada is zero-rated when the service is part of a continuous freight movement that originates outside Canada and has a destination in Canada. The carrier responsible for the domestic service must keep documents proving that the domestic service is part of a continuous inbound freight movement.
A shipment arrives in Halifax, Nova Scotia, from London, England, on an ocean bill of lading. The shipper has specified on the original bill of lading that the goods are destined for Montréal, Quebec. Under a separate contract, a rail carrier is to deliver the goods to the consignee in Montréal. The freight transportation service by the rail carrier is zero-rated if the rail carrier has a copy of the original bill of lading. If the rail carrier cannot get a copy of the original bill of lading, the rail carrier should get certification from the ocean carrier or the ocean carrier's agent that the cargo originated outside Canada as specified on the shipper's bill of lading.
- Continuous freight movement
A continuous freight movement means the transportation of goods by one or more carriers to a destination specified by the shipper of the goods, where all freight transportation services supplied by the carriers are supplied due to instructions given by the shipper of the goods.
- Continuous journey
A 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 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. This is 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; or
- 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.
- Continuous outbound freight movement
Continuous outbound freight movement means the transportation of goods by one or more carriers from a place in Canada to a place outside Canada, or to another place in Canada from which the goods are to be exported. After the shipper transfers possession of the goods to a carrier, and before the goods are exported, the goods cannot be further processed, transformed, or altered in Canada, except to the extent necessary to transport the goods.
A convention means a formal meeting or assembly that is not open to the general public. However, a convention does not include a meeting or assembly mainly intended to:
- provide any type of amusement, entertainment, or recreation;
- conduct contests or games of chance; or
- conduct business, unless it is during a trade show that is not open to the general public.
Although the definition of "convention" excludes an event or assembly where the principal purpose is to conduct business, an event may be a convention if the business meetings are held in the course of a trade show that is closed to the general public.
- Convention facility
A convention facility is any real property that is rented by the sponsor or organizer of a convention for use exclusively as the site for the convention.
- Conversion (for the purpose of new housing rebates)
When you convert a property from non-residential use into housing, it is considered a substantial renovation, even if the extent of the work, if any, does not meet the requirements for substantial renovation.
An example of a conversion is a building that was used in your business that you move into and begin to use as your primary place of residence.
When you begin to use the building as your residence, you are considered to have sold and repurchased the property and you have to pay the GST/HST to us, calculated on the fair market value of the property.
- Co-operative housing corporation
Co-operative housing corporation (co-op) means a corporation established to provide a residential unit to its members by way of lease, licence, or similar arrangement for occupancy as a place of residence. A co-op operates at or near cost and at least 90% of its members are individuals or other co-ops that have only one vote in the affairs of the co-op.
A corporation is a group of people authorized to act as an individual, recognized by law as a single entity in business. That entity can enter into contracts and own property. A corporation can incorporate at either the federal, provincial or territorial level and is identified by the terms "limited", "LTD", "Incorporated", "Inc.", "Corporation", or "Corp.". Whatever the term, it must appear with the corporate name on all documents, stationary, and so on, as it appears on the incorporation document.
A coupon is a document or other device, such as a voucher, receipt, or ticket 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.
A courier means a commercial carrier that is engaged in scheduled international transportation of shipments of goods other than goods imported by mail.
- Customer's goods
Customer's goods mean another person's goods that you import or take possession of in Canada and for which you provide a service or process with added property.
- Designated charity
Designated charity means a charity that has been designated by the Minister of National Revenue to have certain exempt services it provides to registrants made taxable. To qualify for this designation, a charity must meet the two conditions:
- one of the main purposes of the charity is to provide employment or employment-related assistance to individuals with disabilities; and
- the charity must supply, on a regular basis, certain services that are performed, in whole or in part, by individuals with disabilities.
- Designated municipal property
Designated municipal property means property of a person who is, at any time, designated to be a municipality for purposes of claiming the municipal rebate. Generally, it is property, or an improvement to it, that the designated municipality intended to consume, use, or supply more than 10% in the course of activities specified in its designation, and an amount for the property or improvement to it has been included in the calculation of non-creditable tax charged. Once property qualifies as designated municipal property, it is treated as such for as long as it is held by the designated municipality.
- Designated municipality
Designated municipailty refers to a person designated by the Minister of National Revenue to be a municipality, but only in respect of activities, specified in the designation that involve the making of supplies (other than taxable supplies) by the person of municipal services.
Destination relating to a continuous freight movement of goods means the place specified by the shipper (usually on the bill of lading or other shipping documents) where possession of the goods is transferred to the person to whom the goods are consigned or addressed by the shipper.
- Direct input
Direct input means property or a service other than:
Distribution has the same meaning assigned in subsection 55(1) of the Income Tax Act. A distribution is the direct or indirect transfer of property of a corporation to one or more of its corporate shareholders such that each transferee corporation that receives property on the distribution receives its pro rata share of each type of property owned by the distributing corporation immediately before the distribution.
- Domestic inventory
Domestic inventory of a person means tangible personal property that the person acquires in Canada, or acquires outside Canada and imports, for the purpose of selling the property separately for consideration in the ordinary course of a business carried on by the person.
A duplex means a building that contains two residential units under one legal title (separate legal title does not exist for the individual units). This includes a single-family house that has a separate apartment for rent. If the housing is a condominium, it is not a duplex for purposes of the GST/HST new housing rebate. For the purposes of the GST/HST new residential rental property rebate, a duplex is a single unit residential complex.
An election is a way for businesses and organizations to choose various options that may make it easier to comply with the GST/HST. Each election has its own eligibility criteria.
- Eligible activities
Eligible activities for the purposes of the public service bodies' rebate, refers to the making of facility supplies, ancillary supplies, or home medical supplies, or operating a qualifying facility to make facility supplies.
- Eligible capital property
Eligible capital property generally means property that does not physically exist but that gives you a lasting economic benefit. Some examples are goodwill, or franchises, concessions, or licenses for an unlimited period.
- Eligible tour package
To be an eligible tour package for the Foreign Convention and Tour Incentive Program rebate, a package must be a tour package, must be sold for an all-inclusive price, and must include the following elements:
Packages that include a convention facility or related convention supplies are not tour packages.
- Established community
As a general rule, established community means a body of people who reside in the same locality and who are permanently settled in that location. A location will not be considered an established community if it lacks essential services at the location (for example, a basic food store, a basic clothing store with merchandise in stock (not a mail-order outlet), access to housing, certain medical assistance, and certain educational facilities), or if such services are not available within a reasonable commuting distance.
- Excluded input
Excluded input means capital property of a person or any property or service that is acquired, imported, or brought into a participating province by the person for use as an improvement to the capital property.
Exclusive in respect of the consumption, use, or supply of property or a service by a person (other than a financial institution) means all or substantially all of the consumption, use, or supply of the property or service. For a financial institution, exclusive in respect of the consumption, use, or supply of a property or a service means 100% of the consumption, use, or supply.
- Exclusive input
Exclusive input means property or a service (other than an excluded input) that a person acquired, imported, or brought into a participating province for the person's consumption or use:
- directly and exclusively for the purpose of making taxable supplies for consideration; or
- directly and exclusively for purposes other than making taxable supplies for consideration.
- Exempt supplies
Exempt supplies are supplies of property and services that are not subject to the GST/HST. GST/HST registrants cannot claim input tax credits to recover the GST/HST paid or payable on expenses related to making exempt supplies.
- Exhibition space
If you are a GST/HST registrant, you have to charge the GST/HST on exhibition space you lease to exhibitors at a foreign 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.
An exhibitor means a person that 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.
- Export revenue
Export revenue means revenue from:
- domestic inventory you sell outside Canada;
- zero-rated exports;
- sales of added property you acquired for use in processing property for export; and
- sales of services of processing, storing, or distributing goods of other persons where the property is exported after the service is completed.
Export revenue does not include revenue from the sales of:
- fuel you sell to registered international carriers for the transportation of people or goods by ship, aircraft, or railway;
- excisable goods, such as alcohol or tobacco, when the purchaser exports them in bond;
- goods from duty free shops you sell to individuals for export;
- a jig, die, mould, tool, or fixture (or an interest in one) to a non-registered non-resident when it will be used to manufacture or produce goods for the non-resident; and
- a continuous transmission commodity transported by pipeline or powerline, such as oil, natural gas, or electricity, that you sell to a non-registered person who exchanges the good with a registrant in Canada for an identical good that is not in Canada.
- Export revenue percentage
Export revenue percentage is your total export revenue divided by your specified total revenue.
- External supplier
External supplier means a charity, a public institution, or a qualifying non-profit organization (other than a hospital authority or a facility operator), that makes ancillary supplies, facility supplies, or home medical supplies.
- Facility operator
Facility operator means a charity, a public institution, or a qualifying non-profit organization (other than a hospital authority), that operates a qualifying facility.
- Facility supply (for the purpose of public service bodies)
A "facility supply" means an exempt supply of property or a service that is made available or provided to a patient, at least partly, at a public hospital or a qualifying facility. If the supplier does not operate the public hospital or qualifying facility, medical funding (other than a nominal amount) must be paid or payable to the supplier. The property or service must be provided as part of a medically necessary health care process and a physician or a midwife must direct or supervise the health care process. However, if no physician is available locally, a nurse practitioner can take the place of the physician.
Also, if the patient requires chronic care and must stay overnight at the public hospital or qualifying facility, both of the following conditions must be met:
A registered nurse and a physician (or in the absence of a local physician, a nurse practitioner) must be available at all times.
For more than 10% of each day, or part of the day, that the patient is at the hospital or qualifying facility, the patient must be subject to medical management and receive therapeutic health care services, including registered nursing care.
- Fair market value
Fair market value of property or a service supplied to a person is usually the highest dollar value you can get for your property in an open and unrestricted market between a willing buyer and a willing seller who are unrelated to each other. Fair market value does not include the GST/HST payable on the fair market value of the property. For sales of real property, fair market value does not include any provincial land transfer taxes payable on the sale.
- Final recipient
The final recipient for a computer-related service or access to the Internet, means a person who is the recipient of a supply of the service or access and who acquires it otherwise than for the purpose of supplying it to another person.
- Financial institution
A financial institution includes a person that is a listed financial institution as defined on this page, and a person (referred to as a de minimis financial institution) whose income from certain financial services exceeds specific thresholds. For more information, see GST/HST Memorandum 17.6, Definition of “Listed Financial Institution” and GST/HST Memorandum 17.7, De Minimis Financial Institutions.
- Finished inventory
Finished inventory means goods that are in the state in which you will sell them or use them as added property in the course of your business.
- First Nations goods and services tax (FNGST)
The FNGST is a 5% tax on taxable supplies of goods and services on certain First Nations lands. This tax applies when a band council, or other governing body, of a First Nation passes its own law imposing FNGST. The Canada Revenue Agency administers FNGST on behalf of the First Nation.
- First Nations Tax (FNT)
The FNT is a tax on the sale of listed products on some First Nations reserves. Some band councils have passed bylaws that impose FNT on listed products. A listed product refers to alcoholic beverages, fuel, and tobacco products that are specifically mentioned in the band bylaw.
- Fiscal year
Fiscal year means the tax year of the person, or where a person has elected to change their fiscal year, the period that the person elected to be their fiscal year.
- Floating home
Floating home means a structure that is made up of a floating platform and a building that is permanently affixed to the floating platform and that is designed to be occupied as a place of residence for individuals. A floating home does not include any freestanding appliances or furniture sold with the structure, and it cannot be readily adapted for self‑propulsion (it is not a house‑boat or pleasure craft).
- Foreign convention
A foreign convention is a convention held in Canada where:
- 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; and
- 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 majority of members having management and control of the organization is non-resident.
- Freight transportation service
Freight transportation service means the movement of goods. It includes postal and courier services, as well as incidental property or services supplied by a carrier, such as warehouse, packing, and loading services, whether or not a separate charge is made for them. These incidental charges may be subject to GST/HST, or zero-rated depending on the GST/HST status of the basic freight charge. A freight transportation service does not include a service provided by the supplier of a passenger transportation service of transporting an individual's baggage in connection with the passenger transportation service.
- Fuel (for the purpose of first nations tax)
- diesel fuel, including any fuel oil that is suitable for use in internal combustion engines of the compression-ignition type, other than fuel oil that is intended for and is actually used as heating oil;
- gasoline type fuels for use in internal combustion engines; and
- propane gas.
In accounting terms, goodwill is the excess of the purchase price of a business over the fair market value of the net assets of the business.
Government refers to the federal, provincial, or territorial levels of government.
- Government funding (for the purposes of public service bodies' rebate)
Government funding refers to an amount of money (including a forgivable loan) that is easily identifiable and is paid by a grantor:
- to support or promote the non profit organization's (NPO) objectives but not to pay for goods or services supplied by the NPO to the grantor; or
- for an exempt sale of goods or services made by the NPO if the goods and services are not for the use or consumption of the grantor or persons related to the grantor (for example, government funding of a local health unit to supply medical services to the public).
- Grandparented housing (for British Columbia, Ontario, and Prince Edward Island only)
A housing is grandparented where a written agreement of purchase and sale is entered into before the announcement date of harmonization of the PST with the GST and both ownership and possession of the housing transfers to the purchaser under the agreement after the date of harmonization of the PST with GST.
For more information, see GST/HST and home construction.
- Grantor (for the purposes of public service bodies' rebate)
- the federal government, provincial governments, and municipalities, but does not include federal and provincial Crown corporations, and municipal corporations, all or substantially all of whose activities are commercial activities, the supply of financial services, or any combination of the two;
- a corporation that is controlled by a government or by a municipality and one of its main purposes is to fund charitable or non-profit activities;
- a trust, board, commission, or other body that is established by a government, municipality, or corporation described in the previous bullet, and one of its main purposes is to fund charitable or non-profit activities; and
- Indian bands.
- Gross revenue for charities
Gross revenue includes business income, donations, grants, gifts, property income, and investment income, less any amount considered a capital loss for income tax purposes.
Whether your charity is incorporated or unincorporated, you have to use the gross revenue of your organization as a whole (the legal entity) to determine if you qualify as a small supplier under this test.
- Gross revenue test
The annual limit for the gross revenue test for a charity is $250,000. When calculating your gross revenue for this test, you do not have to determine if the goods and services you sell or provide are subject to GST/HST. The test is as follows:
- if you are in your first fiscal year, you do not have to register for GST/HST;
- if you are in your second fiscal year, calculate your gross revenue from your first fiscal year. If this amount is $250,000 or less, you do not have to register (regardless of your total revenue from taxable goods and services); or
- if this is neither your first nor your second fiscal year, calculate your gross revenue in each of your two previous fiscal years. If this amount is $250,000 or less in either of these years, you do not have to register, (regardless of your total revenue from taxable goods and services).
- GST and HST
The goods and services tax (GST) is a tax that you pay on most goods and services sold or provided in Canada. In New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island, the GST has been blended with the provincial sales tax and is called the harmonized sales tax (HST).
For more information, see GST/HST for businesses.
- Hospital authority
Hospital authority means an organization that operates a public hospital and that is designated by the Minister of National Revenue as a hospital authority for GST/HST purposes.
- Home medical supply (for the purpose of public service bodies)
A "home medical supply" means an exempt supply of property or a service (other than a facility supply or a prescribed supply) that you provide or make available to a patient in their home or lodging. Medical funding (other than a nominal amount) must be paid or payable for making the supply.
The supply must be part of a medically necessary process of health care for an individual to maintain health, prevent disease, diagnose or treat an injury, illness or disability, or provide palliative health care. All of the following conditions must also apply:
- The property or service is not provided at a public hospital or a qualifying facility.
- A physician has confirmed that the health care process can take place in the patient's home or lodging.
- A person responsible for coordinating the health care process has authorized that the property or service can be given to the patient. The person responsible could be, for example, a nurse acting as case manager for a patient receiving various health care services in their home after treatment in a hospital for an injury.
- It is reasonable to expect that the person coordinating the health care process must be consulting with or following instructions given by a physician. For example, this would include a nurse acting as case manager who consults with a physician about changes in a patient's treatment after discharge from the hospital.
- 10% or less of the property and services included in the main supply to a patient are meals, accommodation, ordinary household duties, assistance with daily living, social and recreational services, and other similar property or services.
A house generally includes a detached or semi-detached single-unit house, a duplex, a condominium unit, a townhouse, a unit in a co-operative housing corporation, a mobile home (including a modular home), and a floating home. It may also include nearby buildings such as a detached garage or shed, plus up to one-half hectare (1.23 acres) of the land around and underneath them all, that is reasonably necessary for the use and enjoyment of the house as a place of residence.
It may also include a bed and breakfast or similar establishment where rooms are rented for short-term accommodation to the public.
Import means import into Canada.
Improvement to capital property generally means any property or service acquired or imported to improve the capital property when the amount paid or payable for that property or service is included in the adjusted cost base of the capital property for income tax purposes.
- Incentive house or incentive travel company
Incentive house or incentive travel company is a business that assembles some or all of the elements of an incentive trip by buying them from travel service providers (for example, airline companies and hotels) and offering them for sale to another business. The incentive house bills the client for these costs along with its service charge. The client in turn offers the incentive trip to its employees or sales agents. In some cases, an incentive house may qualify as an organizer of a convention.
- Incentive travel or incentive trip
Incentive travel or incentive trip is a trip that a business offers as an award to recognize or reward the productivity of its employees or sales agents. It may include business meetings, seminars, or conventions, as long as the participants are all from the same organization. If an incentive trip includes business meetings, the meetings may qualify as a convention. In this case, an in-house planner can be a sponsor.
An Indian is a person who is registered under the Indian Act. An Indian does not have to live or maintain a residence on a reserve. Such a person may be issued a Certificate of Indian Status by the Department of Aboriginal Affairs and Northern Development Canada.
- Indian Band
An Indian Band, for purposes of the GST/HST, includes both a band council and a tribal council. The band council is the primary unit of an Indian government.
- In-house planner
An in-house planner is a member or employee of a business who organizes a business meeting or incentive trip for the business. The business cannot be a travel service provider. However, it may buy services directly from travel service providers, or buy all or part of a tour package from an incentive house or travel organizer. An in-house planner can be a sponsor of a convention, if the business meeting it organizes qualifies as a convention.
- Input tax credit (ITC)
Input tax credit 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.
- Input tax refund (ITR)
An ITR is a refund that QST registrants can claim to recover the QST paid or payable for property or services they acquired, imported into Quebec, for use, consumption, or supply in the course of their commercial activities.
Insurer, in respect of a fiscal year, means a person who is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an insurance business or under the laws of another jurisdiction to carry on in that jurisdiction an insurance business and carries on, at any time in the fiscal year, an insurance business as its principal business in Canada.
- Intangible personal property
Intangible personal property is generally a right rather than a physical object. It includes such things as contractual rights, options, intellectual property, rights in relation to goods that are not in possession, and other rights that are enforceable by the courts.
- Interest in a partnership
A person (corporation or partnership), or a group of persons, holds, at any time, all or substantially all of the interest in a partnership if at that time, the person, or every person in the group, is a member of the partnership and the person is, or the members of the group collectively are, all the following:
- entitled to receive at least 90% of the total of all amounts, each of which is the share of the partnership's income from all sources that each of its members is entitled to receive for the last fiscal period (within the meaning of the Income Tax Act) of the partnership that ended before that time (or if the partnership's first fiscal period includes that time, for that period), or if the partnership has no income, the total of all amounts each of which is the share of the income of the partnership that each member of the partnership would be entitled to receive if the income of the partnership from each source were one dollar;
- entitled to receive at least 90% of the total amount that would be paid to all members of the partnership (other than amounts that would be paid as a share of partnership income) if it were wound up; and
- able to direct the business and the affairs of the partnership, or would be able to do so if no secured creditor had any security interest in an interest in, or the property of, the partnership.
- International flight
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.
- International voyage
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.
- Joint Venture
A joint venture is an arrangement where two or more persons (participants) work together in a limited and defined business undertaking. Ordinarily, all participants of the joint venture contribute assets, share risks, and have mutual liability.
A joint venture agreement is not a continuing relationship between participants. For example, the venture may be for one specific business project. Once the project is completed, the joint venture ceases to exist. Generally, participants in a joint venture name one participant to be the "joint venture operator". This person accounts for the day-to-day operations of the joint venture. The business number (BN) of the operator is used. The operator can add GST/HST and payroll accounts to his/her BN if he/she wants to account for the joint venture activities separate from other activities.
The 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.
- Legal aid plan
Legal aid plan means a legal aid plan that is administered under the authority of a provincial government.
- Limited partnership or Limited liability partnership (LLP)
A limited partnership exists when some are partners and others are limited partners. Partners will operate the business on a day-to-day basis. The limited partners contribute capital, take no part in control or management, and have limited liability for debts.
A LLP has some characteristics of a partnership and a corporation. Normally, professionals such as accountants and lawyers form LLPs.
- Listed financial institution
A listed financial institution includes:
- a bank,
- a corporation that is authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee,
- a person whose principal business is as a trader or dealer in, or as a broker or salesperson of, financial instruments or money,
- a credit union,
- an insurer,
- a segregated fund of an insurer,
- a person whose principal business is the lending of money or the purchasing of debt,
- an investment plan,
- a tax discounter, or
- a corporation that has an election in effect to have certain supplies deemed to be exempt financial services.
For more information, see GST/HST Memorandum 17.6, Definition of "Listed Financial Institution".
- Major addition (for the purpose of new housing rebates)
To be considered a major addition, the work must be so great that the result is viewed as a newly built house. The addition, by itself, would not be considered to result in a newly built house. Significant physical and functional changes also have to be made to the existing house so that the resulting structure would be seen as a newly constructed house.
The addition should at least double the size of the livable areas of your existing house, which is absorbed into the new one. An example would be making significant structural changes to the appearance and layout of an existing bungalow and adding a full second story.
- Medical funding (for the purpose of public service bodies)
"Medical funding" means an amount paid or payable to a supplier for health care services as consideration for the supply, or to financially assist the supplier in making the supply. A forgivable loan can be considered medical funding if the other conditions are met. However, any other type of loan, refund, remission, rebate or credit of tax, duties, or fees is not considered medical funding. Also, the amount must be paid to the supplier by one of the following:
- a government
- a charity, public institution, or qualifying non-profit organization whose purpose is to organize or coordinate the delivery of health care services. The primary source of funding for the health care services must be a government and this funding must be received and payable in the same fiscal year that the services are supplied.
Membership includes a right granted by a particular person that entitles another person to services that are provided by, or to the use of facilities that are operated by, the particular person and that are not available, or are not available to the same extent or for the same fee or charge, to persons to whom such a right has not been granted, and also includes such a right that is conditional on the acquisition or ownership of a share, bond, debenture or other security.
- Midwife (for the purpose of public service bodies)
"Midwife" means a person who is entitled under the laws of a province to practise the profession of midwifery.
The definition of mineral includes the following: ammonite gemstone, bituminous sands, calcium chloride, silica, gravel, coal, kaolin, oil shale, sand and petroleum, natural gas, and related hydrocarbons.
- Mobile home
A mobile home means a building, the manufacture and assembly of which is completed or substantially completed, that is:
- equipped with complete plumbing, electrical, and heating facilities; and
- designed to be moved to a site for installation on a foundation and connection to service facilities, and to be occupied as a place of residence.
A mobile home may include a modular home, but it does not include travel trailers, motor homes, camping trailers, or other vehicles or trailers designed and used for recreational purposes. A mobile home does not include any freestanding appliances or furniture sold with the home.
- Modification service
Modification service means a service (including parts) performed on a motor vehicle to specially equip or adapt the vehicle for its use by or in transporting an individual using a wheelchair, or to specially equip the vehicle with an auxiliary driving control to facilitate the operation of the vehicle by an individual with a disability.
- Modular home
A modular home means a factory‑built house or building intended for residential occupancy made up of modules, with three walls and a roof or ceiling.
To be considered a mobile home for GST/HST purposes, a modular home has to be equipped with complete plumbing, electrical, and heating facilities, and designed to be moved to a site for installation on a foundation and to be connected to service facilities, and used as a place of residence. In addition, the modules are to be in as finished a condition as possible before leaving the manufacturer’s premises, considering that they must be transported. A modular home does not include any freestanding appliances or furniture sold with the structure.
- Multiple unit residential complex
Multiple unit residential complex means a residential complex that contains more than one residential unit, but does not include a condominium complex. For the purposes of the GST/HST new residential rental property rebate, a multiple unit residential complex does not include a duplex.
Municipality means an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality, or other incorporated municipal body however designated, and such other local authority that the Minister of National Revenue may determine to be a municipality.
For the purposes of the public service bodies' rebate, a municipality includes a person designated by the Minister of National Revenue to be a municipality, but only in respect of activities, specified in the designation, that involve the making of supplies (other than taxable supplies) by the person of municipal services.
- Municipal rebate
A municipal rebate is a public service bodies’ rebate available for municipalities at a rate of 100% of the GST and the federal part of the HST. Municipalities in British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Ontario are also entitled to a municipal rebate for a percentage of the provincial part of the HST.
- Non-attributable input
Non-attributable input of a person means property or a service that is:
- Non-creditable tax charged
Non-creditable tax charged generally means the GST/HST paid or payable on purchases and expenses for which you cannot claim ITCs, a rebate, a refund or remission under another provision of the Excise Tax Act or under any other Act of Parliament.
- Non-profit organization (NPO)
NPO means a person (other than an individual, estate, trust, charity, public institution, municipality, or government) that meets the following conditions:
- It is organized and operated solely for non-profit purposes.
- It does not distribute or make available any of its income for the personal benefit of any proprietor, member, or shareholder, unless the proprietor, member, or shareholder is a club, a society, or an association that has, as its primary purpose and function, the promotion of amateur athletics in Canada.
A non-resident means a person who does not reside in Canada.
- Non-selected public service body activities
Non-selected public service body activities are activities other than:
- those activities for which a person was designated as a municipality; or
- activities carried out in the course of:
- fulfilling responsibilities as a local authority;
- operating a public hospital, an elementary or a secondary school, a post-secondary college or technical institute, a recognized degree-granting institution or a college affiliated with, or research body of, such a degree-granting institution; or
- making facility supplies, ancillary supplies or home medical supplies or operating a qualifying facility for use in making facility supplies.
- Operative extent
The operative extent of a particular property or service is the extent to which the consumption or use of the property or service is for the purpose of making taxable supplies for consideration, or the extent to which the consumption or use of the property or service is for purposes other than making taxable supplies for consideration.
- Organizer of a convention
An organizer of a convention is a person who acquires the convention facility or related convention supplies and organizes the event for the sponsor.
A sponsor may be referred to as the host of the convention. A person that supports an event through sponsorship opportunities is not a sponsor for GST/HST purposes, but may be an exhibitor.
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. However, a professional organizer, when acting as an agent of a sponsor, is not an organizer for purposes of this GST/HST rebate.
Origin of a continuous journey means the place where the passenger transportation service that is included in the continuous journey and that is first provided begins.
Origin of a continuous freight movement means the place where the first carrier engaged in the movement takes possession of the goods being transported.
- Owner-built home
An owner-built home is a home constructed or substantially renovated by the owner of the home, the owner's contractor, or a combination of both.
- Participant in a joint venture
Participant in a joint venture means either:
- a person who, under a written joint venture agreement, makes an investment by contributing resources and takes a proportionate share of any revenue or incurs a proportionate share of the losses from the joint venture activities; or
- a person, without a financial interest, who is designated as the operator of the joint venture under a written agreement and is responsible for the managerial or operational control of the joint venture.
- 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.
A partnership exists when each member shares in the management of the business and has personal liability for the business debts and obligations. Each partner is responsible for the actions of the other partner(s). The partnership itself receives a GST/HST number, not each partner.
Characteristics of a partnership:
- association between two or more persons;
- each partner is co-owner of the business;
- each partner contributes money, property and/or skills;
- each partner shares in the profits/losses based on the partnership agreement; and
- each partner is considered self-employed and reports their share of income/loss on their income tax and benefit return.
- Passenger vehicle
This is an automobile you bought or leased after June 17, 1987. Most cars, station wagons, vans, and some pickup trucks are passenger vehicles. It includes any motor vehicles designed or adapted to carry not more than the driver and eight passengers. It does not include an ambulance, hearse, taxi, vehicles held as inventory and vans and pickup trucks with a seating capacity of not more than three people (including the driver) used primarily for the transportation of goods in the course of a business. A van, pick-up truck, or similar vehicle which in the tax year in which it is acquired is used all or substantially all for the transportation of goods, equipment, or passengers in the course of gaining or producing income would not be considered a passenger vehicle.
- Percentage of total floor space
The percentage of total floor space of a residential unit forming part of a residential complex, or part of an addition to a multiple unit residential complex, is the total square metres of floor space occupied by the unit divided by the total square metres of floor space occupied by all the residential units in the residential complex or addition.
- Permanent establishment
Permanent establishment of a person generally means:
- the person's fixed place of business through which the person supplies property or services, including a place of management, a branch, an office, a factory, or a workshop; or a mine, an oil or gas well, a quarry, timberland, or any other place where natural resources are extracted; or
- a fixed place of business of someone else (other than a broker or an independent agent) who is acting in Canada for the person and through whom the person supplies property or services in the ordinary course of business.
- Permit imprint
A permit imprint means an indicia the use of which as evidence of the payment of postage exclusively by a person is authorized under an agreement between the Canada Post Corporation and the person, but does not include a postage meter impression or any "business reply" indicia or item bearing that indicia.
A person means an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or any organization such as a society, a union, a club, an association, or a commission.
Two corporations are considered closely related to each other for the GST/HST if they are each closely related to a third corporation.
A corporation and a Canadian partnership or two Canadian partnerships are considered closely related to each other if they are each closely related to a third corporation or Canadian partnership, or would be considered to be closely related to the Canadian partnership if each member of that partnership were resident in Canada.
- Physician (for the purpose of public service bodies)
"Physician" means a person who is entitled under the laws of a province to practice the profession of médicine.
- Place of business
Place of business means any premises, facility, or installation used to carry on business, whether or not it is used exclusively for that purpose. Premises, facilities, or installations may be considered to be a place of business whether they are owned or rented, or, in some cases, where they are simply available to the business.
For GST/HST purposes, possession generally means that you hold, control, or occupy the property. For example, if you pay the property taxes, have the right to alter the land, control entry or access to the property, or pay insurance coverage, you may be considered to have possession of the property.
- Postage stamp
A postage stamp means a stamp authorized by the Canada Post Corporation for use as evidence of the payment of postage, but does not include a postage meter impression, a permit imprint or any "business reply" indicia or item bearing that indicia.
- Prescribed activity
A prescribed activity includes:
- the construction of real property; and
- activities relating to the sale or lease of real property.
Activities relating to the sale or lease of non-residential real property are not prescribed activities when a participant, or anyone associated with or related to a participant, uses all or a portion of the property less than 90% in commercial activity, and the user is not paying rent at fair market value and the tax on that rent.
- Prescribed government organization
Prescribed government organization refers to a prescribed entity that is a crown agent (for example, a Crown corporation) that is organized and operated solely for non-profit purposes and does not distribute or make available any of its income for the personal benefit of any proprietor, member, or shareholder.
- Prescribed publications
Prescribed publications include the following:
- books, newspapers, periodicals, magazines, and any similar printed publications, other than those described in Section 1 of Schedule VII to the Excise Tax Act; and
- audio recordings that relate to such publications and accompany those publications when submitted to Canada Post or a customs officer.
Primarily generally means more than 50%.
- Primary place of residence
Primary place of residence means a house, owned jointly or otherwise, that is intended to be inhabited by an individual on a permanent basis. The intention to use the residence as a primary place of residence must be evident at the outset of acquiring, constructing or substantially renovating the residence. While an individual may build or acquire a new house in Canada, if his or her primary place of residence remains outside Canada, then the house in Canada would be a secondary place of residence and not qualify for the GST/HST new housing rebate. A person may have more than one place of residence, but is considered to have only one primary place of residence.
- Procurative extent
Procurative extent of property or a service means the extent to which the property or service is acquired, imported, or brought into a participating province:
- for the purpose of making taxable supplies for consideration; or
- for purposes other than making taxable supplies for consideration.
- Proof of occupancy
Proof of occupancy is the documentation that proves you occupy a new house. This proof could be:
- the new house insurance policy with dates and coverage;
- vehicle insurance or registration that shows the new address; or
- an invoice for telephone, hydro, or natural gas hook-up and cancellation at the previous address.
Property includes goods, real property, and intangible personal property such as trademarks, rights to use a patent, and admissions to a place of amusement, but does not include money.
- Public college
A public college means an organization that operates a post-secondary college or post-secondary technical institute that:
- Public institution
Public institution means a registered charity for income tax purposes that is also a school authority, a public college, a university, a hospital authority, or a local authority determined by the Minister of National Revenue to be a municipality.
- Public sector body
A public sector body means a government or a public service body.
- Public service body (PSB)
A PSB means a charity, non-profit organization, municipality, university, public college, school authority, or hospital authority.
- Purchase price
For the purposes of GST/HST rebates, purchase price means the total amount paid for a new house not including:
- any GST/HST payable for the purchase; and
- if the builder credited the new housing rebate reducing the total amount payable for the house, the amount of the rebate by which the builder reduced the amount payable.
It does not include land transfer taxes or any provincial sales tax that may be payable by the purchaser.
- Qualifying facility (for the purpose of public service bodies)
A "qualifying facility" for a fiscal year, or any part of a fiscal year, means a facility or part of a facility (other than a public hospital) that meets all of the following conditions:
- The services that are ordinarily supplied at the facility during the fiscal year, or during that part of the fiscal year, are facility supplies.
- An amount of qualifying funding is paid or payable to the operator for the facility for the year, or for that part of the year. The funding cannot be a nominal amount.
- The facility, or the part of the facility, is federally or provincially authorized to provide health care services for that year, or for that part of the year.
- Qualifying funding (for the purpose of public service bodies)
"Qualifying funding" means an amount paid or payable to the operator of a facility as one of the following:
- financial assistance to operate the facility
- payment for an exempt supply of making the facility itself available, so that facility supplies can be made there
- payment for facility supplies it provides at the facility
A forgivable loan can be considered qualifying funding if the other conditions are met. However, any other type of loan, refund, remission, rebate or credit of tax, duties, or fees is not considered qualifying funding. Also, the amount must be paid by one of the following:
- a government
- a charity, public institution, or qualifying non-profit organization whose purpose is to organize or coordinate the delivery of health care services. The primary source of funding for the health care services must be a government and this funding must be received and payable in the same fiscal year that the services are supplied.
- Qualifying group
Qualifying group means:
- a group of corporations, each member of which is closely related to each other member of the group; or
- a group of Canadian partnerships, or of Canadian partnerships and corporations, each member of which is closely related to each other member of the group.
To determine if corporations or Canadian partnerships are closely related to other corporations or Canadian partnerships, see the meaning of closely related corporations and closely related Canadian partnerships.
- Qualifying institution
A qualifying institution, for a particular fiscal year, means a financial institution that meets the following requirements in the fiscal year:
- The financial institution is of a prescribed class at any time in the particular fiscal year. The following are prescribed classes: banks, insurers, and securities dealers.
- In each of the two fiscal years immediately preceding the particular fiscal year, the financial institutions had a tax credit amount equal to or exceeding the prescribed amount for the prescribed class of the financial institution. The prescribed amount for each prescribed class of financial institution is $500,000.
- In each of the two fiscal years immediately preceding the particular fiscal year, the financial institutions had a tax credit rate equal to or exceeding the prescribed percentage for the prescribed class of the financial institution. The prescribed percentage is 12% for banks, 10% for insurers, and 15% for securities dealers.
- Qualifying member
A qualifying member of a qualifying group means a registrant corporation resident in Canada or a registrant Canadian partnership:
- that is a member of the qualifying group;
- that is not a party to an election to treat certain taxable supplies as supplies of financial services; and
- all or substantially all of the property (other than financial instruments) was last manufactured, produced, acquired or imported by the corporation or partnership for consumption, use or supply exclusively in its commercial activities, or if the corporation or partnership does not have property (other than financial instruments), all or substantially all of its supplies are taxable.
- Qualifying motor vehicle
A qualifying motor vehicle means a motor vehicle that is equipped with a device designed exclusively to assist in placing a wheelchair in the vehicle without having to collapse the wheelchair, or with an auxiliary driving control to facilitate the operation of the vehicle by an individual with a disability.
Qualifying motor vehicles do not include ambulances, but do include vehicles such as para-transit buses and vans that are specially equipped.
- Qualifying non-profit organization (NPO)
A qualifying NPO means an NPO or prescribed government organization whose percentage of government funding is at least 40% of its total revenue.
- Qualifying portion of basic tax content
The qualifying portion of basic tax content of a property generally means the basic tax content of the property from which you removed the provincial part of the HST from all of the elements of the basic tax content calculation. For more information, see Technical Information Bulletin B-087, GST/HST New Residential Rental Property Rebate.
- Qualifying residential unit
A qualifying residential unit means:
- a residential unit the person owns, co-owns, leases, or sublets from another person;
- a residential unit the person possesses under an agreement of purchase and sale; or
- a residential unit in a residential complex that the person leases or sublets from another person.
In addition, all of the following conditions have to be met:
- The unit is a self-contained residence.
- The person holds the unit to:
- make an exempt lease or sublease of the unit;
- make an exempt supply of property or service that includes giving possession or use of the unit under a lease, licence or similar arrangement entered into for the purpose of the unit's occupancy by an individual as a place of residence;
- make an exempt sale of the unit and an exempt lease of the land; or
- occupy the unit as a primary place of residence as long as another unit situated in the same complex is a qualifying residential unit held for one of the purposes listed above.
- The first use of the unit is or can reasonably be expected to be:
- the primary place of residence of the person or a lessor (or a relation to the person or the lessor), for a period of at least one year (or for a shorter period if, after the shorter period, the unit is sold or leased to an individual who will occupy the unit as a primary place of residence); or
- the primary place of residence of an individual who will occupy the unit continuously for a period of at least one year (or for a shorter period if the unit is sold to another person for use as a primary place of residence of that person or a relation of that person, or taken by the person or lessor, or a relation of the person or the lessor, for use as their primary place of residence).
- If, after the first use, the person intends to occupy the unit or lease it as a place of residence or lodging to an individual who is a relation, shareholder, member, partner, or an individual with whom the person is not dealing at arm's length, the unit will be the primary place of residence of the person or individual.
If substantially all (90% or more) of the residential units of a multiple unit residential complex that contains ten or more residential units meet the one year occupancy requirement, then all of the residential units in the complex are considered to meet the one year occupancy requirement.
- Qualifying subsidiary
Qualifying subsidiary of a particular corporation means another corporation not less than 90% of the value and number of the issued and outstanding shares of the capital stock of which, having full voting rights under all circumstances, are owned by the particular corporation, and includes:
- a corporation that is a qualifying subsidiary of a qualifying subsidiary of the particular corporation;
- where the particular corporation is a credit union, every other credit union; and
- where the particular corporation is a member of a mutual insurance group, every other member of that group.
- Real property
Real property includes:
Recipient of a supply of property or a service means:
- where consideration for the supply is payable under an agreement for the supply, the person who is liable under the agreement to pay that consideration;
- where bullet (a) does not apply and consideration is payable for the supply, the person who is liable to pay that consideration; and
- where no consideration is payable for the supply:
- in the case of a supply of property by way of sale, the person to whom the property is delivered or made available;
- in the case of a supply of property otherwise than by way of sale, the person to whom possession or use of the property is given or made available; and
- in the case of a supply of a service, the person to whom the service is rendered.
And any reference to a person to whom a supply is made shall be read as a reference to the recipient of the supply.
- Registered charity
A registered charity (within the meaning assigned by subsection 248(1) of the Income Tax Act) is an organization established and operated for charitable purposes, and must devote its resources to charitable activities. The charity must be resident in Canada, and cannot use its income to benefit its members.
- Registered party
Registered party includes a political party, local party association, candidate, or referendum committee.
- Registered pension plan
For purposes of a GST/HST rebate, a registered pension plan is a pension plan accepted as such by the Minister for the purposes of the Income Tax Act and whose registration has not been revoked.
A registrant means a person that is registered or has to be registered for the GST/HST.
A reimbursement means a payment you receive from your partnership as a repayment for amounts you spent in connection with your partnership's business. Generally, you complete an expense report detailing the amounts you spent. Usually, a reimbursement is not taxable for income tax purposes, unless it is for payment of your personal expenses.
A related convention supply generally is a property or service that was acquired, imported, or brought into a participating province by a person exclusively for consumption, use or supply by the person in connection with a convention.
The following is a list of examples of related convention supplies that are eligible for the rebate.
- Accommodation: hotel accommodation for use by the convention sponsor, organizer or exhibitor, or supplied to attendees as part of the admission.
- Audiovisual: audio, audiovisual, and video services, including equipment and labour associated with 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 companies: 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 between venues: 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).
- Relation (related individual)
Relation of an individual means another individual related to the first individual by blood, marriage, common‑law partnership, or adoption within the meaning of the Income Tax Act.
Blood relation is limited to parents, children, or other descendants or siblings. Marriage relation includes a spouse or a person who is connected to the spouse by blood or adoption. For purposes of the GST/HST new housing rebate only, a relation can also be your former spouse, or a former common‑law partner.
- Reporting institution
A reporting institution means a person, other than a prescribed person or a person of a prescribed class, that:
- is a financial institution at any time in the fiscal year;
- is a registrant at any time in the fiscal year; and
- the total of all amounts each of which is an amount included in computing, for the purposes of the Income Tax Act, the person's income, or, if the person is an individual, the person's income from a business, for the person's last taxation year that ends in the fiscal year, exceeds the amount determined by the following formula:
$1 million × A ÷ 365
where A equals the number of days in the taxation year.
A selected listed financial institution that is a segregated fund of an insurer, an investment plan, other than a trust governed by a registered retirement savings plan, a registered retirement income fund, or a registered education savings plan, is a prescribed person under the Financial Services and Financial Institutions (GST/HST) Regulations and as a result would not be a reporting institution.
A "reserve" means a reserve within the meaning of the Indian Act, that is, a tract of land which has been set apart for the use and benefit of a band within the meaning of the Indian Act, and equivalent lands under self-government legislation, for example the Cree-Naskapi (of Quebec) Act and the Sechelt Indian Band Self-Government Act. "Reserve" also includes "designated land", which, according to the Indian Act, is a tract of land whose legal title remains vested in Her Majesty and in which the band for whose use and benefit it was set apart as a reserve has, otherwise than absolutely, released or surrendered its rights or interests.
- Residential complex
A residential complex includes a building or part of a building in which one or more residential units are located, along with areas that are reasonably necessary for the use and enjoyment of the building as a place of residence for individuals. These include:
- part of any common areas and other appurtenances to the building;
- the land on which the building is situated; and
- the part of the land immediately adjoining the building
A residential complex generally does not include a building or that part of a building that is a hotel, a motel, an inn, a boarding house, or similar place.
- Residential condominium unit
Residential condominium unit, for GST/HST rebate purposes, means a housing unit that is for use as a place of residence and that is, or is intended to be, a bounded space in a building designated or described as a separate unit on a registered condominium or strata lot plan or description (or similar plan or description registered under provincial law). A residential condominium unit includes any interest in the common areas as well as any interest in land pertaining to ownership of the unit.
For example, an apartment unit or a townhouse would generally be a residential condominium unit for new housing rebate purposes if the unit:
- is a housing unit that is for use as a place of residence;
- is registered as a condominium unit under provincial law;
- is owned under a deeded title separate from any other unit(s) in a condominium building; and
- can be sold separately from the other units in a condominium building.
- Residential trailer park
A residential trailer park generally means the land included in a trailer park and the buildings on, and appurtenances to, that land if the trailer park has at least two sites and the following three conditions are all met:
- the land, buildings, and appurtenances are reasonably necessary for the use and enjoyment of the sites in the trailer park by individuals residing in or occupying mobile homes, or travel trailers, motor homes, or similar vehicles or trailers, situated or to be situated on those sites, or for the operation of the park;
- 90% or more of the sites are, or are intended to be, supplied by way of lease, licence, or similar arrangement and continuous possession or use of a site is for at least:
- the sites would be suitable for use as a place of residence throughout the year by individuals occupying mobile homes (whether or not the park in fact has mobile homes). The sites must be serviced for use by a mobile home throughout the year.
If a person has two or more trailer parks that are located right beside each other, the sites in all of the trailer parks are considered under the conditions above, and where the conditions are met, the trailer parks are considered to be one residential trailer park.
- Residential unit
A residential unit means:
- a detached house, semi-detached house, row house unit, condominium unit, mobile home, floating home, or apartment;
- a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house, or in a residence for students, seniors, individuals with a disability, or other individuals; or
- any other similar premises;
or the part of such housing listed above that:
- is occupied by an individual as a place of residence or lodging;
- is leased as a place of residence or lodging for individuals;
- is vacant, but was last occupied or supplied as a place of residence or lodging for individuals; or
- has never been used or occupied for any purpose, but is intended to be used as a place of residence or lodging for individuals.
When a residential unit in a building allows direct internal access to another residential unit in the building, with or without the use of a key, the two units together are considered to be one unit. This rule does not apply to a residential unit that is a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house or a residence for students, seniors, individuals with a disability, or other individuals.
- Residual input
Residual input means a direct input or a non-attributable input.
- School authority
A school authority means an organization that operates an elementary or secondary school in which it provides instruction that meets the standards of educational instruction established by the government of the province or territory in which the school is operated.
- Securities dealer
In respect of a fiscal year, a securities dealer means a person who:
- is not a bank or an insurer at any time in the fiscal year;
- carries on at any time in the fiscal year a business as a trader or dealer in, or as a broker or salesperson of, securities as the principal business of the person in Canada; and
- is registered under the laws of Canada or a province to carry on in Canada at any time in the fiscal year a business as a trader or dealer in, or as a broker or salesperson of, securities.
- Selected listed financial institution (SLFI)
For purposes of the GST/HST, a financial institution would generally be considered to be an SLFI throughout a reporting period in a fiscal year that ends in a tax year of the financial institution if it is a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) of the Excise Tax Act at any time in the tax year, and the financial institution has a permanent establishment in a participating province and a permanent establishment in any other province, at any time in the tax year.
For purposes of the QST, a financial institution would generally be considered to be an SLFI throughout a reporting period in a fiscal year that ends in a tax year of the financial institution if it is described in any of paragraphs 1 to 10 of the definition of listed financial institution in section 1 of An Act Respecting the Québec Sales Tax (which parallel subparagraphs 149(1)(a)(i) to (x) of the Excise Tax Act) at any time in the tax year, and the financial institution has a permanent establishment in Quebec and a permanent establishment in any other province, at any time in the tax year.
For purposes of the definition of selected listed financial institution, the meaning of a permanent establishment is expanded such that the existence of a permanent establishment would generally be determined based on the location of the financial institution’s clients, operations, unit holders, and/or plan members in addition to where the financial institution has a fixed place of business.
- Selected public service body
A selected public service body means:
- Self-contained residence
A self-contained residence means a residential unit:
- that is a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house or in a residence for students, seniors, individuals with a disability, or other individuals; or
- that contains private kitchen facilities, a private bath, and a private living area.
- Self-government refund
Self-government refund refers to a refund available to a First Nation that has entered into an agreement with the Government of Canada that provides for a refund of GST or the federal part of the HST for property and services that are acquired for self-government activities. The terms and conditions that apply to the refund of GST or the federal part of the HST are included in each agreement.
For more information, see GST/HST public services bodies' rebate.
Service means anything other than:
- money, and
- anything that is supplied to an employer by a person who is or agrees to become an employee of the employer in the course of or in relation to the office or employment of that person.
For the Foreign Convention and Tour Incentive Program, some examples of services include:
- guide or interpreter services;
- transportation services;
- sightseeing excursions; and
- ski lessons.
The following elements, usually included in a tour package, are property, not services:
- short-term accommodation;
- 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;
- and park passes.
A shipper of goods means the person who transfers possession of the goods being shipped to a carrier at the origin of a continuous freight movement or a continuous outbound freight movement. For GST/HST purposes, a person cannot be both a shipper and a carrier for the same shipment; the person is considered a shipper only. A shipper does not include a carrier.
- Shipper's declaration
The shipper's declaration should state that the goods are being shipped for export and the carrier's freight transportation services are part of a continuous outbound freight movement of the goods. The declaration could be on the bill of lading given to the original carrier, or on a separate document given to the carrier.
If the declaration is not made, the carrier's services are taxable at 5%, 12%, 13%, 14%, or 15% and the carrier has to collect the GST/HST on the freight transportation services provided in Canada, unless interlining applies. (see Interlining).
A carrier's services are also taxable at 5%, 12%, 13%, 14%, or 15% if a shipper provides a declaration to the carrier but the goods are not exported. In this case, the carrier is not required to collect the GST/HST on its services if the carrier did not know or could not reasonably have known that the goods were being delivered to a destination in Canada. When the shipper provides a false declaration, the shipper has to account for the tax on the carrier's services.
Whether you receive qualifying funding is important in determining if you are a facility operator for all or any part of a fiscal year.
For example, if you operate a facility and you receive qualifying funding for an entire fiscal year, that funding is considered qualifying funding for the whole year if all the conditions are met. This would mean that you are a facility operator for the whole year.
If, however, you operate a facility and you receive qualifying funding for only a part of a fiscal year, that funding is considered qualifying funding for that particular part of the fiscal year if all the conditions are met. This would mean that you are a facility operator for that part of the year.
- Short-term accommodation
A short-term accommodation means the rental of an accommodation unit in Canada as a place of lodging for an individual who will occupy it continuously for a period of less than one month and that costs more than $20 per night. For example, overnight or weeklong accommodation in any of the following would usually be considered short-term accommodation:
- hotels and motels;
- resorts and lodges; and
- bed-and-breakfast establishments.
Short-term accommodation includes any type of overnight shelter (such as a tent) that is part of a tour package that also includes food and the services of a guide.
Short-term accommodation does not include 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); and
- an accommodation unit supplied under a timeshare arrangement.
- Single unit residential complex
Single unit residential complex means a residential complex that does not contain more than one residential unit, but does not include a residential condominium unit. For purposes of the new residential rental property rebate, reference to a single unit residential complex includes a residential complex containing not more than two residential units (for example, a duplex).
A single unit residential complex generally includes other structures near or adjacent to the unit, such as detached garages or sheds. It also includes the land subjacent and immediately contiguous to the unit that can reasonably be regarded as contributing to the use and enjoyment of the unit as a place of residence. We consider that up to half a hectare (1.23 acres) of land may be reasonably necessary for the use and enjoyment of a unit. However, in some cases, more than half a hectare of land may be considered to form part of the complex (such as the minimum lot size imposed by a municipality or land necessary for you to access public roads).
- Single serving
A single serving of beverages means a serving in any amount that is less than 600 ml in volume.
A single serving of ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, non-dairy substitutes for any of these products, or any product that contains any of these products means a serving in any amount that is less than 500 ml in volume or 500 grams in weight.
A single serving of cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products means a serving weighing less than 230 grams or a portion or part of any of these goods when offered for sale as a single serving.
- Small supplier
A small supplier refers to a person whose revenue (along with the revenue of all persons associated with that person) from worldwide taxable supplies was equal to or less than $30,000 ($50,000 for public service bodies) in a calendar quarter and over the last four consecutive calendar quarters.
Charities and public institutions are also considered small suppliers if they meet the gross revenue test of $250,000 or less.
- Sole proprietorship (self employed)
A sole proprietorship is an unincorporated business owned and managed by one individual.
Sole proprietors are fully responsible for all debts and obligations related to their business. A creditor with a claim against a sole proprietor would normally have a right against all business and personal assets, meaning the creditor could seize some of his personal belongings. This is known as unlimited liability.
The characteristics of a sole proprietorship are:
- the business is not incorporated;
- the owner has sole responsibility for decision making;
- the owner receives all profits and takes responsibility for all losses that are incurred by the business; and
- the owner is considered self-employed and reports their business income on their income tax and benefit return.
- Specified facility operator
Specified facility operator means a non-profit organization operating other than for profit, a health care facility, or a part of a facility, that provides residents of the facility who have limited mental or physical capacity for self-supervision and self-care with:
- nursing and personal care under the direction or supervision of qualified medical and nursing care staff, or other personal and supervisory care (other than domestic services of an ordinary household nature), as required by each resident on an individual basis;
- assistance with the activities of daily living and social, recreational, and other related services to meet the psycho-social needs of the residents; and
- meals and accommodation.
- Specified member
A specified member of a qualifying group means:
- a qualifying member of the group; or
- a temporary member of the group. A temporary member of the group only qualifies as a specified member when he is to receive a supply of property in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)(b)(i) of the Income Tax Act from the distributing corporation that is a qualifying member of the same group.
Once the reorganization is complete, the temporary member must qualify as a qualifying member to be a specified member and eligible to make this election.
- Specified motor vehicle
A specified motor vehicle means most motor vehicles, other than certain racing cars, and any prescribed motor vehicle.
A motor vehicle means any vehicle that has to be registered for highway use in your province. Examples include:
- passenger vehicles;
- trucks and other freight-transportation vehicles;
- recreational and sporting vehicles such as snowmobiles and all-terrain vehicles;
- travel and tent trailers, as well as snowmobile, boat, and other trailers or semi-trailers for on-road use;
- motorcycles, scooters, and mopeds;
- tractors; and
- special-purpose motor vehicles such as tow trucks, mobile cranes, firefighting vehicles, cement-mixer trucks, road sweepers, spraying vehicles, mobile workshops, and mobile radiology units.
- Specified partnership
A specified partnership is a selected listed financial institution during a reporting period in a fiscal year that ends in your tax year if the partnership is a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) of the Excise Tax Act during the tax year and during the preceding tax year. It also has to qualify as a specified partnership during those two years.
A partnership is a specified partnership during a tax year if it has:
- at least one member who has taxable income (or income, in the case of a member that is an individual, an estate of a deceased individual, or a trust) in that year that was earned in a participating province from a business carried on through the partnership; and
- at least one member (whether or not it is the same member) who has taxable income (or income, in the case of a member that is an individual, an estate of a deceased individual, or a trust) in that year that was earned in a non-participating province from such a business.
Where members do not have taxable income or income in the year from the partnership business, the determination is made as if the members had taxable income or income from the partnership.
- Specified supply
Specified supply means a supply of goods that:
- are imported at any time after the supply is made; or
- have been imported and are considered to have been supplied outside Canada because they are delivered or made available to the recipient before their release under the Customs Act.
- Specified total revenue
Specified total revenue means revenue from sales you have made in a year, except sales of:
- services you provide on goods you did not import or obtain physical possession of in Canada;
- goods that you did not acquire in Canada or import into Canada;
- added property that you used to process goods that you did not import into Canada or take physical possession of in Canada; and
- your own capital property.
A sponsor of a convention is the person who convenes the convention and supplies admissions to it.
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. However, 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 stop between two legs of a journey that is 24 hours or less in not considered a stopover and will not affect whether the legs are part of a continuous journey.
- Substantial alteration of property
Substantial alteration of property means:
- you manufacture or produce goods (or have another person manufacture or produce goods for you); or
- you process goods (or have another person process goods for you) and by doing so, you bring the goods to the state of finished inventory if:
- the value that is added to the goods if more than 10% from non-basic services, and
- the total value added from all processing services is more than 20%.
You can use any reasonable method for valuing the goods in finished inventory. However, once you choose a method, you have to use that method each year.
- Substantial completion
Substantial completion generally means that construction or substantial renovation of a house is at a stage where an individual can reasonably inhabit the premises. Minor repairs, adjustments, or outstanding upgrades are not considered to impair the use and enjoyment of the house as a place of residence.
- Substantial renovation (for the purpose of new housing rebates)
Major changes have to be made to meet the definition of a substantial renovation. In a major renovation project, the interior of a building is essentially gutted. Generally, 90% or more of the interior of the existing housing has to be removed or replaced to qualify as a substantial renovation (90% test).
You do not have to remove or replace the foundation, exterior and interior supporting walls, roof, floors, and staircases to meet the 90% test.
Only livable areas count towards a substantial renovation including finished basements and finished attics. Livable areas do not include garages or crawl spaces. Work done to partially complete a basement but not make it a livable basement does not count toward the 90% test.
- Substantial renovation by homeowners (for the purpose of new housing rebates)
Major changes have to be made to be considered a substantial renovation. We do not consider renovations or improvements made by homeowners, such as replacing a kitchen, to be substantial renovations.
You may qualify for the GST/HST new housing rebate when you:
- substantially renovate or hire someone to substantially renovate your home
- build, or hire someone else to build, a major addition to your home as part of a substantial renovation
- convert a property from non-residential use into your home
If your renovation does not qualify as a substantial renovation, you do not qualify for a new housing rebate.
Supplier means the person making the supply (for example, the vendor).
A supply means the provision of property or a service in any way, including sale, transfer, barter, exchange, licence, rental, lease, gift, or disposition.
- Tobacco product (for the purpose of first nations tax)
- every article made by a tobacco manufacturer includes any step in the preparation from raw leaf tobacco into the tobacco product by any process whatever, including cigarettes, tobacco sticks, and snuff;
- the leaves and stems of the tobacco plant if they have been processed further than packing, drying, and sorting; and
- Tax credit amount
Tax credit amount, for a fiscal year, generally means:
- where the person has made an election to use a prescribed rate in respect of the fiscal year, the total of all amounts each of which is an input tax credit (ITC) for the fiscal year that the person would, in the absence of having made the election, be entitled to claim in respect of a residual input for which tax in respect of the supply, importation, or bringing into a participating province of the residual input became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable;
- where the person is a qualifying institution for the fiscal year and has not made a transitional year election and has not received authorization to use particular methods in respect of the fiscal year, the total of all amounts each of which is an ITC for the fiscal year that the person would, if the person were not a qualifying institution for the fiscal year and did not make an election to use a prescribed rate in respect of the fiscal year, be entitled to claim in respect of a residual input for which tax in respect of its supply, importation, or bringing into a participating province became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable; and
- in any other case, the total of all amounts each of which is an ITC for the fiscal year that the person is entitled to claim in respect of a residual input for which tax in respect of its supply, importation, or bringing into a participating province became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable.
- Tax credit rate
Tax credit rate, for a fiscal year, generally means the percentage that is determined by dividing the tax credit amount for the fiscal year by the total of all amounts each of which is an amount of tax in respect of a supply, importation, or bringing into a participating province of a residual input that became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable.
- Taxable supplies
Taxable supplies are supplies of property and services that are made in the course of a commercial activity and are subject to the GST/HST (including zero-rated supplies).
- Telecommunications channel
A telecommunications channel means a telecommunications circuit, line, frequency, channel, partial channel or other means of sending or receiving a telecommunication but does not include a satellite channel.
- Telecommunications facility
A telecommunications facility means any facility, apparatus or other thing (including any wire, cable, radio, optical or other electromagnetic system, or any similar technical system, or any part thereof) that is used or is capable of being used for télécommunications.
- Telecommunication service
A telecommunication service means:
- the service of emitting, transmitting or receiving signs, signals, writing, images or sounds or intelligence of any nature by wire, cable, radio, optical or other electromagnetic system, or by any similar technical system, or
- making available for such emission, transmission or reception telecommunications facilities of a person who carries on the business of supplying services referred in the preceding bullet.
- Temporary member
Temporary member of a qualifying group means a registrant corporation, resident in Canada:
- that is a member of the group but not a qualifying member;
- that is not a party to an election to treat certain taxable supplies as supplies of financial services;
- that receives a supply of property in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)(b)(i) of the Income Tax Act from the distributing corporation that is a qualifying member of the same group;
- that does not carry on any business or have any property (other than financial instruments ) before receiving the supply; and
- that transfers its shares on the distribution.
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.
- Tour operator
Generally, a tour operator is a person who, in the ordinary course of business, packages tours that are ultimately sold to, or are for the use of, either a group of travellers or an individual traveller. An outfitter or an owner of a lodge, hotel, or motel may be a tour operator if the person packages tours for sale in the ordinary course of a business.
Travel agencies, when they sell tour packages for a tour operator, are not tour operators for the Foreign Convention and Tour Incentive Program rebate. A person who sells packages that include a convention facility or related convention supplies is also not a tour operator for this rebate.
- Tour package
A tour package is a combination of two or more services or of property and services that are supplied together for an all-inclusive price. This can include transportation services, accommodation, a right to use a campsite at a recreational trailer park or campground, or guide or interpreter services.
Generally, a tour package is what is produced when a tour operator combines various elements to create something new. However, not all combinations of two or more services or of property and services are tour packages. The nature and purpose of the package also has to be considered. For example, if the overall purpose of a package is to provide a specialized service, it is not considered to be a tour package for GST/HST purposes. Examples of such packages are wellness packages, educational and counselling packages, children's overnight camps, sports tournaments, and concert tours.
As well, an incentive trip that includes business meetings is not a tour package for GST/HST purposes.
- Trailer park
Trailer park of a person means a piece of land the person owns or leases and that is only composed of:
- one or more sites where each site is, or is intended to be, supplied by the person by way of lease, licence, or similar arrangement to the owner, lessee, or person in occupation or possession of a mobile home, or a travel trailer, motor home, or similar vehicle or trailer, situated or to be situated on the site; and
- other land that is reasonably necessary for:
- the use and enjoyment of the sites by individuals residing in or occupying mobile homes, or travel trailers, motor homes, or similar vehicles or trailers, situated or to be situated on those sites; or
- the purpose of operating the park.
- Transitional tax adjustment (for British Columbia, Ontario, and Prince Edward Island only)
Builders have to account for a transitional tax adjustment of up to 2% of the sale price for grandparented sales of newly constructed or substantially renovated housing (other than residential condominium units and complexes) where the housing was less than 90% complete as of the date of harmoniztion of the PST with the GST.
- Travel service provider
Travel service providers include travel agents, hotels, air carriers, tour operators, and cruise operators. If you buy travel services or tour packages in the course of your business to resell, we consider you to be a travel service provider.
- Tribal council
A tribal council is another level of Indian government. It is a grouping of bands with a common interest who have joined together to provide advisory or program services for two or more bands. Band council members compose the tribal council Board of Directors.
A university means a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution.
- 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 (other than charities using the net tax calculation for charities) may be eligible to claim ITCs for the GST/HST paid or payable on purchases and expenses made to provide them.
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