GST/HST and place of supply rules

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A taxable supply, other than a zero-rated supply, made in a non-participating province is subject to the GST. When such a supply is made in a participating province, it is subject to the HST.

Specific rules apply to determine whether a supply is made in Canada and whether it's made in or outside of a participating province. The rate of tax to charge for a supply is determined by the province or territory in which the supply is made, which is referred to as the place of supply.

What are the different place of supply rules?

Use the following sections to determine which place of supply rule applies.

Goods

Goods (tangible personal property)

For the purposes of the place of supply rules that determine whether a supply is made in a province,

  • a floating home and a mobile home that is not affixed to land are each deemed to be tangible personal property and not real property; and
  • where an agreement for a supply of tangible personal property is entered into but the property is never delivered to the recipient, the property is deemed to have been delivered where the property was to be delivered, as the case may be, under the terms of the agreement.
Sale of goods

Sale of goods

There is no change to the current place of supply rules for supplies of goods by way of sale. A supply by way of sale of goods is deemed to be made in a province if the supplier delivers the property or makes it available in the province to the recipient of the supply.

The application of this place of supply rule is generally based on the province in which legal delivery of the goods to the recipient occurs. However, for purposes of the rule, property is also deemed to be delivered in a particular province, and not in any other province, if the supplier either:

  • ships the property to a destination in the particular province that is specified in the contract for carriage of the property or transfers possession of the property to a common carrier or consignee that the supplier has retained on behalf of the recipient to ship the property to such a destination; or
  • sends the property by mail or courier to an address in the particular province.

See examples for the general rules - Sale of goods

Deemed delivery of goods

For purposes of the place of supply rules that apply to supplies of good, where an agreement for a supply of goods is entered into but the property is never delivered to the recipient, the property is deemed to have been delivered where the property was to be delivered, as the case may be, under the terms of the agreement.

Delivery of goods on exercise of option to purchase

Delivery of goods on exercise of option to purchase

A recipient of a supply by way of lease, licence or similar arrangement that exercises an option to purchase the good under the arrangement is for greater certainty considered to take delivery of the good supplied by way of sale at the place and time where the recipient ceases to have possession of the good as a lessee and begins to have possession of the good as a purchaser. In this case, the place of supply will be based on the place where the recipient begins to have possession of the good as a purchaser rather than the place where the recipient first obtained possession of the good as a lessee.

Sale of most vehicles

Sale of most vehicles

The supply of a vehicle is considered to be made in the province where the vehicle is registered where certain conditions are met. For more information, see How does the GST/HST apply to a sale of a specified motor vehicle from a GST/HST registrant?

Rentals and leases-three months or less

Rentals and leases-three months or less

A supply of property otherwise than by way of sale under an arrangement under which continuous possession or use of the property is provided for a period of no more than three months is deemed to be made in the province in which the supplier delivers the property or makes it available to the recipient of the supply.

The application of this place of supply rule is generally based on the province in which legal delivery of the goods to the recipient occurs. However, for purposes of this rule, the property is also deemed to be delivered in a particular province, and not in any other province, if the supplier either:

  • ships the property to a destination in the particular province that is specified in the contract for carriage of the property or transfers possession of the property to a common carrier or consignee that the supplier has retained on behalf of the recipient to ship the property to such a destination
  • sends the property by mail or courier to an address in the particular province

See example – Rentals and leases-three months or less

Rentals and leases-more than three months

Rentals and leases-more than three months

For GST/HST purposes, where a supply of property is made by way of lease, licence or similar arrangement for an amount that is attributable to a period (referred to as a "lease interval") that is the whole or a part of the period during which possession or use of the property is provided under the arrangement, a separate supply of the property for a separate amount is deemed to be made by the supplier and received by the recipient for each lease interval. Furthermore, the supply for each lease interval is deemed to be made on the earliest of the first day of the lease interval, the day on which the lease payment attributable to that interval becomes due and the day that payment is made.

A supply of goods (other than a specified motor vehicle) by way of lease, licence or similar arrangement for more than three months is deemed to be made in a province if the ordinary location of the property, as determined at the time the supply is made is in the province. A separate supply of the property is deemed to be made for each lease interval on the earliest of the first day of the lease interval, the day on which the lease payment attributable to that interval becomes due and the day that payment is made.

For purposes of the place of supply rules, the ordinary location of property is deemed to be the location where the supplier and the recipient mutually agree that the ordinary location of the property is to be at a particular point in time. In other words, the mutual agreement of the supplier and recipient will be determinative even where the property is actually located at a different place at the relevant time than what had been agreed upon. The mutual agreement of the parties may change from time to time. Therefore, even if the original written agreement for a supply of property specified that the property will be located in a particular province, the parties may mutually agree subsequent to the signing of the contract that the property is to be moved at a particular time to a location in another province in which case the latter location will be the ordinary location of the property at that particular time.

See example – Rentals and leases-more than three months

Real property

Real property

There is no change to the current place of supply rule for real property. A supply of real property is considered to be made in a province if the property is situated in the province.

See example – Supply of real property

Supply of real property partly in a province

To determine whether the HST applies to a taxable supply of real property and at what rate, we have to determine where the real property is situated. The part of the real property that is situated in the particular province, and the part of the real property that is situated in the other province or outside Canada, are each considered to be a separate taxable supply made for a separate amount equal to the portion of the total amount for all the property that is reasonably attributable for each part of the real property. As a result, it is only the part of the real property that is situated in the participating provinces that will be subject to HST.

Under the place of supply rules that determine whether a supply is made in a province, a floating home and a mobile home that is not affixed to land are each considered to be a good and not real property. For more information, see tab Place of supply rules for goods.

See example - Supply of real property partly in a province

Lease intervals– Deemed supplies of real property

Where a supply of property is made by way of lease, licence or similar arrangement for consideration that is attributable to a period (referred to as a "lease interval") that is the whole or a part of the period during which possession or use of the property is provided under the arrangement, a separate supply of the property for separate consideration is deemed to be made by the supplier and received by the recipient for each lease interval. The supply for each lease interval is deemed to be made on the earliest of:

  • the first day of the lease interval
  • the day on which the lease payment attributable to that interval becomes due
  • the day that payment is made

See example - Lease intervals, Deemed supplies of real property

Intangible personal property

Intangible personal property

Generally, there are four general place of supply rules that apply to supplies of intangible personal property (IPP). These general rules do not apply to supplies of IPP in certain cases where specific place of supply rules apply.

Rule 1

A supply of IPP in respect of which the Canadian rights can only be used primarily (more than 50%) in non-participating provinces is made in a non-participating province.

See example - Rule 1 - Intangible personal property that can only be used primarily in non-participating provinces

Rule 2

If the Canadian rights for a supply of IPP can only be used primarily (more than 50%) in the participating provinces, the supply is made in a participating province if an equal or greater proportion of the Canadian rights cannot be used in another participating province.

This rule is intended to apply where the Canadian rights can only be used primarily (more than 50%) in the participating provinces and the province in which the greatest proportion of those rights can be used can be determined because the use of at least some of those rights is specifically limited to one or more of those provinces.

This rule therefore does not apply if the use of the rights is not specifically limited to one or more of the participating provinces, which will be the case, for example, if the rights can be used on an unlimited basis in more than one of those provinces or if the province in which the greatest proportion of the Canadian rights can be used cannot be determined.

See examples - Rule 2 - Intangible personal property that can only be used primarily in participating provinces

Rule 3

If Rule 1 and 2 do not apply, the supply is made in a given province under the following conditions:

Consideration of $300 or less

If the value of the consideration for the supply of the IPP is $300 or less, the supply is made in a province if:

  • the supply is made through a permanent establishment of the supplier located in the province in the presence of an individual who is the recipient, or through a vending machine situated in the province;
  • the IPP can be used in the province.
Address in Canada obtained

If the preceding rule does not deem the supply to be made in a province, the supply may be deemed to be made in a participating province if the supplier obtains an address of the recipient in the province in the normal course of business and if the IPP can be used in the province. The address can be:

  • a home or a business address in Canada of the recipient, or
  • if more than one such address is obtained, the home or business address in Canada of the recipient that is most closely connected with the supply, or
  • if the supplier does not obtain a home or business address in Canada of the recipient, any other address in Canada of the recipient that is most closely connected with the supply.
Highest tax rate

If the preceding rules do not deem the supply to be made in a province, the supply is made in the participating province for which the tax rate is the highest among the provinces in which the property can be used.

See examples - Rule 3 - When the province in which the greatest proportion of the Canadian rights can be used cannot be determined

See examples - Rule 3 - When the supply can be used otherwise than only primarily in participating provinces or non-participating provinces

Rule 4

If the supply is not considered to be made in a single participating province under Rule 3, because the highest tax rates for two or more of the participating provinces (each of which is referred to here as a "specified province") are the same, the supply is made in the specified province among those provinces where the business address of the supplier that is most closely connected with the supply is located or, if such an address is not located in one of the specified provinces, in the specified province that is closest in proximity, determined in any reasonable manner, to such an address.

See example - Rule 4 - Participating provinces with the same highest tax rate

Special rules for certain intangible personal property

The following IPP have specific play of supply rules that applies:

IPP that relates to goods

IPP that relates to goods (tangible personal property)

The general rules for supplies of intangible personal property (IPP) will not apply to supplies of IPP that relate to goods. Instead, the following rules will apply:

Rule 1

A supply of IPP that relates to property that is ordinarily located in Canada is made in a non-participating province if the property that is ordinarily located in Canada is not ordinarily located primarily in participating provinces.

See example - Rule 1 - Intangible personal property that relates to tangible personal property that is not ordinarily located primarily in participating provinces

Rule 2

A supply of IPP that relates to property is made in a participating province if the property that is ordinarily located in Canada is ordinarily located primarily in participating provinces, and if an equal or greater proportion of the property is not ordinarily located in another participating province.

See example - Rule 2 - Intangible personal property that relates to tangible personal property ordinarily located primarily in participating provinces

Rule 3

If Rule 2 does not result in the supply being made in a province because the property is ordinarily located in equal proportions in two or more participating provinces, the IPP is deemed to be supplied in the participating province among those provinces for which the tax rate is the highest.

See example - Rule 3 - Highest tax rate

Rule 4

If a supply of IPP cannot be determined under Rule 3 to be made in a single participating province because the tax rates for two or more of the participating provinces (each of which is referred to here a "specified province") are the same, the supply is made in the specified province among those provinces where the business address of the supplier that is most closely connected with the supply is located. If such an address is not located in one of the specified provinces, in the specified province that is closest in proximity, determined in any reasonable manner, to such an address.

See example - Rule 4 - Same highest tax rate

IPP that relates to real property

IPP that relates to real property

A supply of IPP that relates to real property is considered to be made in Canada if the real property is situated in Canada and is considered to be made outside Canada if the real property is situated outside Canada. Where a supply of IPP that relates to real property is made and the real property is both situated in Canada and outside Canada, the proportion of the supply of the IPP that relates to the real property that is situated in Canada is considered to be made in Canada while the proportion of the supply of the IPP that relates to the real property that is situated outside Canada is considered to be made outside Canada. As a result, it is only the provision of the proportion of the supply of the IPP that relates to real property that is situated in Canada that may be considered made in a participating province and subject to the HST.

The general rules for supplies of intangible personal property (IPP) will not apply to supplies of IPP that relate to real property. Instead, the following rules will apply:

Rule 1

The supply of a service is made in a province and in the normal course of business, the supplier obtains a particular address of the recipient that is:

  • a home or business address in Canada of the recipient;
  • where the supplier obtains more than one home or business address in Canada of the recipient, the home or business address that is most closely connected with the supply; or
  • where the supplier does not obtain a home or business address in Canada of the recipient, another Canadian address of the recipient that is most closely connected with the supply, the supply will be regarded as made in the province in which the particular address is situated.

See example - Rule 1 - Address in Canada obtained

Rule 2

If Rule 1 does not consider the supply of the service to be made in a province and the Canadian element of the service is performed primarily (more than 50%) in the participating provinces, the supply is to be considered made in the participating province in which the greatest proportion of the Canadian element of the service that is performed in the participating provinces is performed.

See example - Rule 2 - Participating province of greatest proportion of performance

Rule 3

If Rule 2 does not result in the supply being made in a province because the real property is ordinarily located in equal proportions in two or more participating provinces, the IPP is deemed to be supplied in the participating province among those provinces for which the tax rate is the highest.

See example - Rule 3 - Highest tax rate

Rule 4

If a supply of IPP cannot be determined under the previously explained rules to be made in a single participating province, because the highest tax rates for two or more of the participating provinces (each of which is referred to here as a "specified province") are the same, the supply is made in the specified province among those provinces where the business address of the supplier that is most closely connected with the supply is located or, if such an address is not located in one of the specified provinces, in the specified province that is closest in proximity, determined in any reasonable manner, to such an address.

See example - Rule 4 - Same highest tax rate

IPP that relates to services

IPP that relates to services

A supply of IPP that relates to services to be performed is made in a province if at the time the supply is made, the supplier can determine that the services to be performed will all be supplied in a single province if supplies of those services were made based on the relevant place of supply rule for those services. If the supply of the IPP is not determined to be made in a province based on this rule, the supply is subject to the general rules for IPP.

See examples - Supply of IPP that relates to services

Services

Services

Generally, there are four general place of supply rules that apply to supplies of services. These general rules do not apply to supplies of services in certain cases where specific place of supply rules apply.

Rule 1

The supply of a service is made in a province and in the normal course of business, the supplier obtains a particular address of the recipient that is:

  • a home or business address in Canada of the recipient;
  • where the supplier obtains more than one home or business address in Canada of the recipient, the home or business address that is most closely connected with the supply; or
  • where the supplier does not obtain a home or business address in Canada of the recipient, another Canadian address of the recipient that is most closely connected with the supply, the supply will be regarded as made in the province in which the particular address is situated.

See example - Rule 1 - Address in Canada obtained

Rule 2

If Rule 1 does not consider the supply of the service to be made in a province and the Canadian element of the service is performed primarily (more than 50%) in the participating provinces, the supply is to be considered made in the participating province in which the greatest proportion of the Canadian element of the service that is performed in the participating provinces is performed.

See example - Rule 2 - Participating province of greatest proportion of performance

Rule 3

If Rule 2 does not consider the supply of a service to be made in a participating province because the service is performed equally in two or more participating provinces, the service is to be considered to be supplied in the participating province among those provinces that has the highest rate for the provincial part of the HST. If two or more of the participating provinces in this case have the same rate for the provincial part, HST is required to be charged by the supplier using that particular rate.

Rule 4

If Rule 1 does not consider the supply of the service to be made in a province and the Canadian element of the service is performed otherwise than primarily (50% or less) in the participating provinces, the supply is made in a non-participating province.

Special rules for certain services

The following services have specific place of supply rules that applies:

Air navigation services
Air navigation services

A supply of air navigation services (as defined in subsection 2(1) of the Civil Air Navigation Services Commercialization Act) is made in a province if the leg of the flight for which the services are made originates in that province. This represents a clarification to the current rule.

For purposes of this place of supply rule, a leg of a flight of an aircraft means a part of the flight that begins where passengers embark or disembark the aircraft, where freight is loaded on the aircraft or unloaded from it or where the aircraft is stopped to allow for its servicing or refuelling, and that ends where it is next stopped for any of those purposes.

See example - Supply of air navigation services

Computer-related services and internet access
Computer-related services and internet access

There are no changes to the specific place of supply rules that apply to supplies of computer-related services and Internet access. The application of the place of supply rule for the supply of a computer-related service and the supply of Internet access depends on whether the supply is made to a single final recipient or to multiple final recipients.

Single final recipient

If there is to be a single final recipient of a supply of a computer-related service or Internet access made by a particular supplier, and the recipient acquires the supply under an agreement with either the supplier or another supplier, the supply is made in a province if the final recipient avails itself of the service or access at a single ordinary location in that province, and either:

  • the particular supplier maintains information sufficient to determine that location; or
  • it is the normal business practice of the particular supplier to obtain information sufficient to determine that location.

In any other case where there is to be a single final recipient of the supply, the supply will be made in a province if the mailing address of the recipient of the supply is in that province.

See examples - Supply of computer-related services and internet access - Single final recipient

Multiple final recipients

A different place of supply rule applies if there are to be multiple final recipients of a supply of a computer-related service or Internet access made by a particular supplier and each final recipient acquires the supply under an agreement with either the particular supplier or another supplier and, in the case of each final recipient, there is a single location at which the final recipient uses the service or access and:

  • either the particular supplier maintains information sufficient to determine that location; or
  • it is the normal business practice of the particular supplier to obtain information sufficient to determine that location.

In this case, the supply of the computer-related service is made in the province, if any, that will be determined under the place of supply rules for services if the service were performed in each province in which, and to the same extent to which, the final recipients use the service. The supply of Internet access is made in the province that will be determined under the place of supply rules for intangible personal property (IPP) if the Internet access were accessible in each province in which, and to the same extent to which, the final recipients use the Internet access. In other words, the relevant place of supply rules are to be applied to the supply of a computer-related service as a supply of a service and to the supply of Internet access as a supply of IPP.

In any other case where there are to be multiple final recipients of the supply, the supply of the computer-related service or Internet access will be made in a province if the mailing address of the recipient is in that province.

See example - Supply of computer-related services and internet access - Multiple final recipients

Customs brokerage services
Customs brokerage services

A customs brokerage service means a service of arranging for the release of imported goods or of fulfilling, for the importation, any requirement under the Customs Act or the Customs TariffAct to account for the goods, to report, to provide information or to remit any amount.

The supply of a customs brokerage service for imported commercial goods will continue to be made in the province in which the goods are situated at the time of their release.

However, the supply of a customs brokerage service for imported non-commercial goods is made in a participating province if the provincial part of the HST is imposed on the importation of the goods at the rate for the participating province or will be imposed if various provisions did not apply to relieve certain types of importations from the imposition of the provincial part of the HST.

Relieving provisions apply to:

  • imported goods accounted for as commercial goods, imported specified motor vehicles or imported mobile homes or floating homes that have been used or occupied in Canada by any individual;
  • certain goods imported by or on behalf of persons who are resident in the Nova Scotia offshore area or the Newfoundland offshore area; and
  • imported goods that qualify as non-taxable importations from the imposition of the GST or federal part of the HST.

In any other case, the supply of the customs brokerage service is made in a non-participating province.

The above rules do not apply to the supply of any service provided in relation to an objection, appeal, re-determination, re-appraisal, review, refund, abatement, remission or drawback, or in relation to a request for any of the foregoing.

See example - Supply of customs brokerage services

Freight transportation services
Freight transportation services

There are no changes to the place of supply rule that currently applies to supplies of freight transportation services. A supply of a freight transportation service is made in a province if the destination of the service is in the province. This rule does not apply to most supplies of mail services supplied by the Canada Post Corporation which are subject to the place of supply rules that are explained in the section dealing with postage and mail delivery services. For more information, see How does the GST/HST apply to freight transportation services?

Passenger transportation services
Passenger transportation services

A supply of a passenger transportation service that is part of a continuous journey is made in a province if, where the ticket or voucher issued for the first passenger transportation service provided in the continuous journey specifies the origin of the continuous journey, the origin is a place in the province and the termination, and all stopovers, for the continuous journey are in Canada. There is no change to this place of supply rule. Furthermore, if the origin of the continuous journey is specified in the ticket or voucher that is issued for the first passenger transportation service provided in the continuous journey, but there is a termination or stopover outside Canada for the continuous journey, the supply of the passenger transportation service will continue to be considered made in a non-participating province.

A supply of a passenger transportation service that is part of a continuous journey for which the ticket or voucher issued for the first passenger transportation service provided in the continuous journey does not specify the origin of the continuous journey, is currently considered to be made in a province if the place of negotiation of the supply is in the province. This rule is eliminated. Instead, under the new rule, a supply of a passenger transportation service is made in the province in which the passenger transportation service originates, where the supply:

  • is part of a continuous journey for which the ticket or voucher issued for the first passenger transportation service provided in the continuous journey does not specify the origin of the continuous journey; or
  • is not part of a continuous journey.

See example - Supply of passenger transportation services

Goods and services supplied during passenger transportation services

Supplies made during international flight or international voyage

If a supply of a good or a service (other than a passenger transportation service) is made to an individual on board an aircraft on an international flight or a vessel on an international voyage and physical possession of the good is transferred to the individual, or the service is wholly performed, on board the aircraft or vessel, the supply is considered made outside Canada and is therefore not subject to GST/HST.

Goods and services supplied during passenger transportation services

Generally, under the current place of supply rule, if the supply by way of sale of a good or a service (other than a passenger transportation service) is made to an individual on board a conveyance in the course of a business of supplying passenger transportation services and physical possession of the good is transferred to the individual, or the service is wholly performed, on board the conveyance during any leg of the journey that begins in any participating province and ends in any participating province, the supply is made in the participating province in which that leg of the journey begins.

If a supply by way of sale of a good or a service (other than a passenger transportation service) is made to an individual on board a conveyance in the course of a business of supplying passenger transportation services and physical possession of the good is transferred to the individual, or the service is wholly performed, on board the conveyance during any leg of a journey that begins in any province and ends in any province, the supply of the property or service is made in the province in which that leg of the journey begins.

See example - Supply of goods and services supplied during passenger transportation services

Services related to the supply of passenger transportation services

Baggage charges

A supply made by the supplier of a passenger transportation service of a service of transporting an individual's baggage in connection with the passenger transportation service is made in the same province in which the supply of the passenger transportation service is made.

See example - Supply of services related to the supply of passenger transportation services - Baggage charges

Child supervision

A supply made by the supplier of a passenger transportation service of a service of supervising an unaccompanied child in connection with the passenger transportation service is made in the same province in which the supply of the passenger transportation service is made.

See example - Supply of services related to the supply of passenger transportation services - Child supervision

Services related to a ticket, voucher or reservation

A supply made by a supplier of a passenger transportation service of a service of issuing, delivering, amending, replacing or cancelling a ticket, voucher or reservation for the passenger transportation service is made in the same province in which the passenger transportation service will, if it were completed in accordance with the agreement for that supply, be made.

See example - Supply of services related to the supply of passenger transportation services - Services related to a ticket, voucher or reservation

Personal services
Personal services

The general rules for supplies of services will not apply to personal services. Furthermore, the place of supply rule for personal services explained below will not apply to the supply of an advisory, consulting or professional service. These services will generally be subject to the general place of supply rules for services, unless another specific rule applies to them.

A supply of a service (other than an advisory, consulting or professional service) that is all or substantially all (90% or more) performed in the presence of the individual to whom it is rendered (referred to as a "personal service") and the Canadian element of which is performed primarily (more than 50%) in the participating provinces, is made in the participating province in which the greatest proportion of the service that is performed in the participating provinces is performed.

If this rule does not result in the supply of the personal service being made in a participating province because the personal service is equally performed in two or more participating provinces, the supply of the service is made in the participating province among those provinces that has the highest rate for the provincial part of the HST. If two or more of the participating provinces in this case have the same rate for the provincial part of the HST, HST will be required to be charged by the supplier using that particular rate.

If all or substantially all (90% or more) of a personal service is performed in the presence of the individual to whom it is rendered and the Canadian element of the service is performed less than primarily (50% or less) in the participating provinces, the supply is made in a non-participating province.

See example - Supply of personal services

Postage and mail delivery services
Postage and mail delivery services

There are no changes to the place of supply rules that apply to postage and mail delivery services. A supply of a right to a mail delivery service as evidenced by a postage stamp or a postage-paid card, package or similar item (other than an item bearing a "business reply" indicia) that is authorized by the Canada Post Corporation is made in the province in which the supplier delivers the stamp or item to the recipient.

The supply of a mail delivery service for which the postage stamp or similar item is used as evidence of the payment of postage for the mail delivery service is made in the province in which the stamp or item is delivered. However, this rule does not apply in circumstances where:

  • the supply of the service is made under a bill of lading; or
  • the amount for the supply of the service is $5 or more and the address to which the mail is sent is not in a participating province.

In both of these circumstances, the place of supply rules as explained in freight transportation services determines the place of supply of the mail delivery service. As a result, the place of supply of the mail delivery service in these circumstances is based on the destination of the mail delivery service.

There is a separate place of supply rule that applies to goods delivered to which the mail delivery service relates. See Place of supply rules for goods.

See examples - Supply of postage and mail delivery services

Postage meter

If the payment of postage for a mail delivery service supplied by the Canada Post Corporation otherwise than under a bill of lading is evidenced by a postage meter impression printed by a meter, the supply of the service is made in a province if the ordinary location of the meter when the recipient of the supply pays an amount to the Corporation that postage is in the province. Where, from time to time, the supplier and the recipient mutually agree upon the ordinary location of the postage meter at a particular time, that location is considered to be the ordinary location of the postage meter at the particular time.

Where the exclusion applies because the supply is made under a bill of lading, the supply is subject to the general place of supply rule for freight transportation services. As a result, the place of supply of the mail delivery service is based on the destination of the service.

Permit imprint

If the payment of postage for a mail delivery service supplied by the Canada Post Corporation otherwise than under a bill of lading is evidenced by a permit imprint, the supply of the service is made in the province in which the recipient of the supply deposits the mail with the Corporation in accordance with the agreement between the recipient and the Corporation authorizing the use of the permit imprint.

In the circumstance where the supply is made under a bill of lading, the general place of supply rule for freight transportation services will apply. As a result, the place of supply of the mail delivery service is based on the destination of the service.

Business indicia

When an item bearing a "business reply" indicia is used, the place of supply rules that are explained in the freight transportation services section apply to determine the place of supply of the mail delivery service. As a result, the place of supply of the mail delivery service is based on the destination of the mail delivery service.

However, the place of supply rules for intangible personal property (IPP) that relates to services will apply to the supply of the right to use a "business reply" indicia or an item bearing that indicia as evidence of the payment of a mail delivery service as explained in the following example.

See example - Supply of postage and mail delivery services - Business indicia

Premium rate telephone services
Premium rate telephone services

A supply of a service provided by telephone and accessed by calling a number beginning with the digits 1-900 or 976 is made in the province in which the telephone call originates. This represents a clarification to the current rule.

See example - Supply of premium rate telephone services

Repairs, maintenance, and photographic-related goods
Repairs, maintenance, and photographic-related goods

There are no changes to the place of supply rule that applies where a supplier receives property of another person for the purpose of either:

  • supplying a service of repairing, maintaining, cleaning, adjusting or altering the property; or
  • producing a negative, transparency, photographic print or other photographic-related good.

In this case, the supply of the service (and of any property supplied in connection with it) or of the photographic-related good is made in a province if the supplier delivers the property or the photographic-related good, as the case may be, in that province to the recipient of the supply after the service or production of the photographic-related good is completed. This place of supply rule will override the place of supply rule for supplies of services in relation to goods and the place of supply rule for supplies of goods.

For purposes of this rule, property is considered to be delivered in a particular province, and not in any other province, if the supplier either:

  • ships the property to a destination in the province that is specified in the contract for carriage of the good or transfers possession of the property to a common carrier or consignee that the supplier has retained on behalf of the recipient to ship the property to such a destination; or
  • sends the property by mail or courier to an address in the particular province.

See example - Repairs, maintenance, and photographic-related goods

Services in relation to a location-specific event
Services in relation to a location-specific event

The general rule for supplies of services will not apply to a supply of a service that relates to a location-specific event (for example, a performance, festival, ceremony, convention, conference, symposium, or other similar event) if the service will be performed primarily (more than 50%) at a location of the event in a province. A supply of such a service will be considered as having been made in the province in which the service is primarily performed.

See example - Supply of services in relation to a location-specific event

Services in relation to real property
Services in relation to real property

The general rules for supplies of services will not apply to supplies of services in relation to real property. New place of supply rules apply to supplies of services in relation to real property.

A supply of a service in relation to real property that is situated in Canada that is situated primarily (more than 50%) in the participating provinces will be considered as having been made in a participating province if the real property in Canada to which the service relates is situated primarily (more than 50%) in the participating provinces. The supply will be considered as having been made in the participating province in which the greatest proportion of the real property is situated.

See example - Supply of services in relation to real property

If the greatest proportions of the real property are situated in two or more participating provinces, the supply is made in the participating province, among those in which the greatest proportions of the real property are situated, for which the rate of the provincial part of the HST is highest. In such cases where the provincial part of the HST is the same, the supplier will use that particular rate.

See example - Supply of services in relation to real property situated in two or more participating province

A supply of a service in relation to a real property will be considered to be made in a non-participating province if the real property in Canada to which the service relates is not situated primarily (more than 50%) in participating provinces.

Services in relation to real property in Canada and outside Canada

A supply of a service that relates to real property is considered to be made in Canada if the real property is situated in Canada, and is considered to be made outside Canada if the real property is situated outside Canada. As a result, where a supply of a service that relates to real property is made and the real property is both situated in Canada and outside of Canada, the proportion of the service that relates to the real property that is situated in Canada is considered to be made in Canada and the proportion of the service that relates to the real property that is situated outside Canada is considered to be made outside Canada. As a result, it is only the provision of the proportion of the service that relates to real property that is situated in Canada that may be considered to be made in a participating province and subject to the HST.

Services in relation to tangible personal property (goods)
Services in relation to tangible personal property (goods)

The general rules for supplies of services will not apply to the supply of services in relation to property that is situated in Canada when the Canadian element (the part of the service that is performed in Canada) of the service is performed.

Property remaining in same provinces while service is performed

A supply of a service in relation to property that is situated in one or more provinces at the time the Canadian element of the service begins to be performed and that remains situated in that province or those provinces, as the case may be, while the Canadian element of the service is performed will be considered as having been made in a participating province if the property is situated primarily (more than 50%) in participating provinces when the Canadian element of the service is performed. The service will be considered to be made in the participating province in which the greatest proportion of the property, which is situated in the participating provinces, is situated.

See example - Supply of services in relation to tangible personal property - Property remaining in same provinces while service is performed

If the greatest proportions of the property are situated in two or more participating provinces, the supply of the service is made in the participating province where the rate of the provincial part of the HST is highest. If two or more of the participating provinces in this case, have the same rates for the provincial part of the HST, the supplier will use that rate.

See example - Supply of services in relation to tangible personal property - Property remaining in same provinces (in two or more participating provinces) while service is performed

If the property situated in one or more provinces at the time the Canadian element of the service begins to be performed and that remains situated in that province or those provinces, as the case may be, while the Canadian element of the service is performed is situated otherwise than primarily (50% or less) in participating provinces (for example, situated primarily in non-participating provinces or situated equally in participating and non-participating provinces) when the Canadian element of the service is performed, the supply of the service in relation to the property is made in a non-participating province.

Property not remaining in same provinces while service is performed

A supply of a service in relation to property that is situated in one or more provinces at the time the Canadian element of the service begins to be performed and that does not remain situated in that province or those provinces, as the case may be, while the Canadian element of the service is performed will be considered as having been made in a participating province if:

  • the property is situated primarily in participating provinces at any time the Canadian element of the service is performed;
  • the service is performed primarily in participating provinces; and
  • the greatest proportion of the performance of the service, which is performed in the participating provinces, is performed in that participating province.

See example - Supply of services in relation to tangible personal property - Property not remaining in same provinces while service is performed

If the greatest proportions of the service are performed in two or more participating provinces, the service is made in the participating province, among those in which the greatest proportions of the services are performed, for which the rate of the provincial part of HST is highest. In such cases where the provincial part of the HST is the same, the supplier will charge tax using that rate.

A service in relation to property that is situated in one or more provinces at the time the Canadian element of the service begins to be performed and that does not remain situated in that province or those provinces, as the case may be, while the Canadian element of the service is performed will be considered as having been made in a non-participating province if the property is situated otherwise than primarily (50% or less) in participating provinces (for example, situated primarily in non-participating provinces or situated equally in participating and non-participating provinces) at any time the Canadian element of the service is performed or the service is performed otherwise than primarily (50% or less) in participating provinces.

See example - Supply of services in relation to tangible personal property - Property not remaining in same provinces (in two or more participating provinces) while service is performed

Services of a trustee for a trust governed by an RRSP, RRIF, RESP, TFSA or RDSP
Services of a trustee for a trust governed by an RRSP, RRIF, RESP, TFSA or RDSP

A supply of a service for a trust governed by an RRSP, an RRIF or an RESP provided by a trustee of the trust is made in a particular province if the mailing address of the annuitant of the RRSP or RRIF or of the subscriber of the RESP is in that province. This rule is extended to services of a trustee for trusts governed by similar plans including TFSA and RDSP.

For purposes of this place of supply rule, the following are as defined in subsection 248(1) of the Income Tax Act:

  • RRSP means a registered retirement savings plan;
  • RRIF means a registered retirement income fund;
  • RESP means a registered education savings plan;
  • TFSA means a tax free savings account; and
  • RDSP means a registered disability savings plan.

See example - Supply of services of a trustee for a trust governed by an RRSP, RRIF, RESP, TFSA or RDSP

Services rendered in connection with litigation
Services rendered in connection with litigation

The general rule for supplies of services will not apply to a service rendered in connection with criminal, civil or administrative litigation in a province. A supply of a service that is rendered in connection with criminal, civil or administrative litigation in a province (other than a service rendered before the commencement of such litigation), is made in that province. A supply of such a service rendered before the commencement of such litigation is subject to the general place of supply rules for services.

See examples - Supply of services rendered in connection with litigation

Telecommunication services
Telecommunication services

There is no change to the place of supply rules that currently apply to the supplies of telecommunication services.

Billing location

For purposes of the place of supply rules that determine the province in which a supply of a telecommunication service is made, the billing location for a telecommunication service is in a province if the fee for the service is charged or applied to an account that the recipient has with the supplier of the service and the account relates to telecommunications facilities that are used or are available for use by the recipient to obtain telecommunication services and all of those facilities are ordinarily located in the province. Where, from time to time, the supplier and the recipient mutually agree upon the ordinary location of the telecommunications facilities at a particular time, that location is considered to be the ordinary location of the telecommunication facilities at the particular time.

If the fee for the service is not charged or applied to an account that the recipient has with the supplier of the telecommunication service, the billing location is considered to be in a province if the telecommunications facility used to initiate the service is located in that province.

Telecommunication service

A supply of a telecommunication service of making telecommunications facilities available (other than a service of granting sole access to a telecommunications channel) is made in a province if:

  • all of the facilities are ordinarily located in that province; or
  • where not all of the facilities are ordinarily located in the province, the invoice for the supply is sent to an address in that province.

For other types of supplies of telecommunication services (other than a service of granting sole access to a telecommunications channel), the supply is made in a province if the telecommunication:

  • is both emitted and received in that province;
  • is either emitted or received in that province and the billing location for the service is located in that province; or
  • is emitted in the province and received outside the province and the billing location for the service is not in a province where the telecommunication is emitted or received.

See examples - Supply of telecommunication service

Dedicated telecommunications channel

A supply of a telecommunication service of granting sole access to a telecommunications channel for transmitting telecommunications between two provinces is considered to be a separate supply of the service made in each of those provinces as well as a separate supply in any province between them. The amount for the supply in each province is calculated based on the part of the overall distance over which the telecommunication will be transmitted that will occur in the particular province if the telecommunication were transmitted solely by means of cable and related facilities located in Canada that connected, in a direct line, the transmitters for emitting and receiving the telecommunications.

See example - Supply of telecommunication services - Dedicated telecommunications channel

Do you need to pay the provincial part of the HST for property and services brought into a participating province?

You may have to self-assess (pay) the provincial part of the HST if you buy goods, services or intangible personal properties (IPP) in a non-participating province, but you use, consume, or supply them within the participating provinces. You may also have to self-assess if you use, consume, or supply goods, services or IPP in a participating province with a higher HST rate than the participating province where you acquired them.

You will not have to self-assess the provincial part of the HST if the tax payable from all amounts to be self assessed in a calendar month is less than $25.

This does not apply to motor vehicles required to be registered in a participating province and to persons using simplified accounting.

Use the following sections to determine if you need to self-assess on:

Goods (does not include motor vehicles)

You have to self-assess the provincial part of the HST when:

  • you buy taxable (other than zero-rated) goods:
    • in a non-participating province and you later bring, or cause someone else to bring, the goods into a participating province; or
    • in a participating province and you later bring, or cause someone else to bring, the goods into another participating province for which the rate of HST is higher; and
  • you consume, use, or supply the goods less than 90% in your commercial activities.

You do not have to self-assess the provincial part of the HST if you are a registrant and the property is consumed, used, or supplied at least 90% in your commercial activities.

If you purchased the goods (other than a motor vehicle) from someone with whom you are dealing at arm's length, you have to remit the provincial part of the HST on the lesser of:
  • the amount paid or payable for the goods; and
  • the fair market value of the goods when they are brought into a participating province.

If you purchased goods (other than a motor vehicle) from someone with whom you are not dealing at arm's length, you have to remit the provincial part of the HST on the fair market value of the goods when they are brought into a participating province.

For more information, see Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

How to self-assess

If you are registered for the GST/HST, the tax is payable when the goods are brought into a participating province. Enter this amount on line 405 of your GST/HST return. You may be entitled to claim an ITC for the tax you self-assess on the goods depending on the percentage of use in your commercial activities. For more details on ITCs, see Input tax credits.

If you are not registered for the GST/HST and have to self-assess the part of the HST, use Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

Intangible personal property and services

Service

You pay GST when you receive a supply of a service that is made in a non-participating province. If you are a resident of a participating province and you acquire a service in a non-participating province for consumption, use or supply more than 10% in the participating provinces, you will have to self-assess the provincial part of the HST.

The same rule applies for a supply of a service that is made in a participating province where 10% or more of the service will be used, consumed, or supplied in participating provinces for which the rate of HST is higher.

You do not have to self-assess the provincial part of the HST if you are a registrant and the service is consumed, used, or supplied at least 90% in your commercial activities or on certain transportation and telecommunication services, legal services, or where the service is for goods that are removed from the participating province as soon as the service has been performed.

For more information, see Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

IPP

If you are a resident in a participating province and you receive a supply of IPP (such as franchise rights) that is made in a non-participating province that you acquired for use, consumption, or supply 10% or more in the participating province, you have to self-assess the provincial part of the HST.

The same rule applies for a supply of IPP that is made in a participating province that you acquired for use, consumption, or supply 10% or more in participating provinces for which the rate of HST is higher.

You do not have to self-assess the provincial part of the HST if you are a registrant and the IPP is used, consumed or supplied 90% or more in your commercial activities. You also do not have to self-assess the provincial part of the HST on certain supplies of IPP including IPP supplied by way of certain leases and licences and in certain instances where the person previously paid tax on the IPP.

For more information, see Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

How to self-assess

The tax is payable when the payment for the service or IPP is paid or becomes due. If you are a registrant, enter the amount on line 405 of your GST/HST return. You can also claim an ITC for the tax you self assessed on these services and IPP to the extent that they are for consumption, use, or supply in your commercial activities.

If you are not registered for GST/HST and have to self-assess the part of HST, use Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

Motor vehicles

For motor vehicles that require registration under the laws of a participating province, the tax is payable to the Receiver General, but collected by the provincial licensing authorities on the earlier of:

  • the day you register the vehicle in the participating province; or
  • the day on or before which you have to register the vehicle.

A specified motor vehicle is defined to mean a vehicle that is, or that would be, if it were imported, classified under several tariff items in Schedule I to the Customs Tariff. Generally, this includes almost all motor vehicles, other than racing cars classified under heading number 87.03, and any prescribed motor vehicles.

For more information, see How does the GST/HST apply to a sale of a specified motor vehicle from a GST/HST registrant?

Can you recover the provincial part of the HST for property and services brought into a non-participating province or into a participating province with a lower HST rate?

You may be eligible for a rebate of the provincial part of the HST you paid on property and services brought into a non-participating province, or into another participating province for which the rate for the provincial part of the HST is lower.

To determine if you can recover the provincial part of the HST for:

Related publication

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