Canada Revenue Agency
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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.
Examples
A consumer in British Columbia (BC) purchases a card in BC that entitles the individual to receive upon request twenty haircuts at a barber shop in BC. When the supply of the IPP is made, the supplier can determine that the haircutting services to be performed to which the IPP relates will all be supplied in a single province if supplies of those services were made. Specifically, the haircutting services will be considered made in BC based on the place of supply rule for personal services. The supply of the IPP is therefore made in BC and the HST will apply at a rate of 12%.
An individual who lives in Ontario purchases a rail pass at a rail station in Ontario that entitles the individual to ten one-way trips from Ottawa to Toronto. When the individual wishes to travel, the individual uses the pass to obtain a rail ticket which specifies that the origin of the particular trip is Ottawa. When the supply of the IPP is made, the supplier can determine that the passenger transportation services to be performed to which the IPP relates will all be supplied in a single province if supplies of those services were made. Specifically, the passenger transportation services will be deemed made in Ontario based on the place of supply rule for passenger transportation. This is because the origin of the continuous journey to be specified on the tickets issued for those passenger transportation services is in Ontario in all cases. The supply of the IPP is therefore made in Ontario and the HST will apply at a rate of 13%.
For more examples, see GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax - Place of supply rules for determining whether a supply is made in a province.
