Canada Revenue Agency
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Postage and mail delivery services
There are no changes to the place of supply rules that apply to postage and mail delivery services.
Postage stamp and mail delivery service
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.
Examples
An individual purchases several postage stamps at a retail postal outlet in Ontario that will eventually be used by the individual to mail letters. The supply of the stamps is made in Ontario because the individual takes delivery of the stamps in Ontario. The HST will apply to the postage stamps at the rate of 13%.
An individual orders by mail-order a booklet of postage stamps. The supplier sends the booklet by mail to the individual's address in Ontario, and as a result, the booklet is considered to be delivered in Ontario. The supply of the booklet of postage stamps is made in Ontario because the supplier delivered the stamps to the individual in Ontario. The HST will apply to the supply of the booklet of postage stamps at the rate of 13%.
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.
Example
A Canadian charity headquartered in Vancouver, British Columbia (BC) raises funds by seeking donations through direct mail solicitations. To facilitate the receipt of these donations, the charity enters into a Business Reply Mail Agreement with Canada Post for the use of a domestic business reply indicia on return address envelopes that accompany the charitable solicitations. Under the Agreement, the charity uses the address of its headquarters in Vancouver as its unique business return address on the business reply envelopes. The charity pays an annual registration fee for the right to use a business reply indicia with its Vancouver address, and a fee for the mail delivery service that is charged on a per returned envelope basis.
The supply of the mail delivery service for which there is a per returned envelope charge is made in BC and the HST will apply at the rate 12% based on the fact that the destination of the returned business reply envelopes is the address of the charity in Vancouver, BC. The supply of the right to use a business reply indicia for its Vancouver address is considered to be a supply of IPP that relates to a mail delivery service. Therefore, the supply of the right to use a business reply indicia in this circumstance is considered to be made in BC and the HST will apply at the rate of 12% based on the fact that the supplier can determine at the time the supply of the right is made, that all of the services to which the right relates will all be supplied in BC (such as, the returned envelope mail delivery service is made in BC because the envelopes are sent to the address of the charity in BC) if supplies of those services were made.
