GST/HST registrants that pay or credit the rebate under the FCTIP

 

Notice to the reader

Under proposed changes, a GST/HST rebate is no longer available to non-residents for the Canadian accommodation portion of eligible tour packages under the Foreign Convention and Tour Incentive Program if the accommodations are supplied after March 22, 2017. However, the rebate may still be available if the accommodations are supplied in 2017 and the amount owing for those accommodations is paid in full before January 1, 2018.

On this page

As a GST/HST registrant, how to verify that you can pay or credit the rebate amount
As a GST/HST registrant, how to calculate the rebate amount to credit or pay
How and when to claim a deduction on a GST/HST return for the amount of GST/HST paid or credited
What to do if you credited or paid an amount in error (joint and several liability)
What to do if you are completing and filing the rebate application on behalf of your client


As a GST/HST registrant, how to verify that you can pay or credit the rebate amount

Before paying or crediting a rebate amount to a person, you should verify that the person qualifies for the rebate. You should have the supporting documentation to generally confirm that you can pay or credit the rebate amount to the person. You do not have to include information used to confirm the person’s eligibility to claim a rebate with the application but you should keep this information in case we ask to see it.

For rebates paid or credited to a non-resident tour operator you should get all of the following information:

  • the name of the tour operator
  • confirmation that the tour operator is a non-resident and is not registered for the GST/HST
  • confirmation that the tour operator supplies the eligible tour package in the ordinary course of its business to another non-resident(s)
  • confirmation that payment for the tour package was made at a place outside of Canada at which you or your agent was conducting business (CRA will consider where the payment was processed and deposited)
  • confirmation that the accommodation included in the tour package was made available to a non-resident individual

For rebates paid or credited to a non-resident individual, an organization, or a business (other than a tour operator), your invoices must show that you charged GST/HST in respect of a supply and paid or credited the rebate amount to the non-resident. Also, you must maintain supporting documents to confirm that one of the following applies:

  • the non-resident paid for the eligible tour package at a place outside Canada where you or your agent normally does business
  • the non-resident paid a deposit of at least 20% of the total price of the tour package at least 14 days before the 1st day any accommodation included in the package is made available to the non-resident

For rebates paid or credited to a sponsor or non-registered organizer of a foreign convention you should obtain documentation to confirm that the event was a foreign convention. This may include:

  • a convention agenda, itinerary, or event program
  • a complete hotel folio
  • copies of invoices or receipts
  • other documents that confirm that the event was a foreign convention

The following examples of written documentation generally may be used to support whether a person is eligible to claim a FCTIP rebate. The CRA will determine at the time of audit whether an eligible supplier could have paid or credited a rebate amount and claimed a deduction from its net tax.

See example - Written documentation that generally confirms that the person to whom the sale is made is not a resident

See example - Written documentation that generally confirms that a sponsor or a non-registered organizer is eligible for a rebate on foreign convention

See example - Written documentation that generally confirms that a non-resident (other than tour operator) is eligible for a rebate on tour packages

See example - Written documentation that generally confirms that a non-resident non-registered tour operator is eligible for a rebate on tour packages

As a GST/HST registrant, how to calculate the rebate amount to credit or pay

Criteria and how to calculate
If you choose to credit or pay Criteria How to calculate

A non-resident individual, business, or organization (other than a tour operator) that is not registered for the GST/HST

They meet all of the eligibility conditions for claiming a rebate.

AND

One of the following applies:

  • The non-resident paid for the eligible tour package at a place outside Canada where you or your agent were conducting business.
  • The non-resident paid a deposit of at least 20% of the total price of the tour package at least 14 days before the first day any accommodation included in the eligible tour package is made available to the non-resident. Note that under this option, the deposit must be paid by credit card or charge card, cheque, bank draft, or other bill of exchange, drawn on an account outside Canada with a non-resident institution that is a bank, cooperative credit society, trust company, or similar institution. A deposit paid by debit card drawn on an account outside Canada with any of these non-resident institutions is also acceptable.

See How to calculate and claim the rebate

A non-resident tour operator who is not registered for the GST/HST

They meet all of the eligibility conditions for claiming a rebate.

Suppliers cannot pay or credit the rebate amount for short-term or camping accommodation they provide separate from an eligible tour package.

See How to calculate and claim the rebate

A sponsor of a foreign convention

OR


An organizer of a foreign convention who is not registered for the GST/HST

They meet all of the eligibility conditions for claiming a rebate.

AND

One of the following applies:

  • You are a registrant organizer paying or crediting a rebate amount to a sponsor of a foreign convention.
  • You are a registrant operator of convention facilities that is not the organizer of the convention paying or crediting a rebate amount to a sponsor or non-registered organizer of a foreign convention.
  • You are a registrant supplier of accommodation (for example, a hotel) that is not the organizer of the convention paying or crediting a rebate amount to a sponsor or non-registered organizer, and the accommodation is acquired exclusively for supply in connection with a foreign convention.
To calculate the rebate amount, see How to calculate and claim the rebate

A non-resident exhibitor of a foreign or domestic convention who is not registered for the GST/HST

You cannot credit or pay the rebate amount.

 

If you are a supplier who sells tour packages and you are required to identify the various elements of the package in order to determine the amount of the GST/HST you must collect, see GST/HST Memorandum 27-1 Calculating the GST/HST on Tour Packages.

How and when to claim a deduction on a GST/HST return for the amount of GST/HST paid or credited

You have to file Form GST106, Information on Claims paid or credited for Foreign Conventions and Tour Packages for each reporting period in which:

  • you are a GST/HST registrant
  • you paid or credited a rebate amount for a foreign convention or a tour package
  • you claimed a deduction on your GST/HST return for the amount of GST/HST paid or credited

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

File your GST/HST return and GST106 online

The due date to file this form is the same as the due date of your GST/HST return. The consequences for not filing this form by the due date depend on when you file it. For more information, see GST/HST - Penalties and interest.

See example - How to report the amount paid or credited on account of a rebate of tax paid for an eligible tour package on your GST/HST return

See example - How to report the amount paid or credited to a non-resident consumer on account of a rebate of tax paid for an eligible tour package on your GST/HST return

See example - How to report an amount paid or credited on account of a rebate payable to the sponsor of a foreign convention on your GST/HST return

What to do if you credited or paid an amount in error (joint and several liability)

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

What to do if you are completing and filing the rebate application on behalf of your client

If you enter into an agreement with another person to complete and file their rebate application, see How GST/HST is charged and accounted for when a GST/HST registrant acts on behalf of a consumer.

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