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

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As a GST/HST registrant, how do you 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.

What records do you include with your application for tour operators?
What records do you include with your application for sponsors and organizers of foreign conventions?

Example of written documentation that generally confirms that the person to whom the sale is made is not a resident

Example of written documentation that generally confirms that the person to whom the sale is made is not a resident

a) In the case of a non-resident consumer:
Name of individual: ________________________
Street address: ______________________________________
I certify that I am not resident in Canada for purposes of the Excise Tax Act.
Signature of individual __________________________
Date (YYYY-MM-DD) ________________

(b) In the case of a non-resident person, other than a consumer:
Name of person: ________________________________
Name of authorized representative: __________________________
Title:__________________________
Street address: ___________________________________
______________________________________________
_______________________________________________

I certify that the above-mentioned person is not resident in Canada for purposes of the Excise Tax Act. I have personal knowledge of such matters and I am authorized to act on the person's behalf.

Signature of authorized representative ________________________
Date (YYYY-MM-DD)                          __________________________

Example of written documentation that generally confirms that a sponsor or a non-registered organizer is eligible for a rebate on foreign convention

Example of written documentation that generally confirms that a sponsor or a non-registered organizer is eligible for a rebate on foreign convention

Name of eligible supplier: ___________________________
Address: ______________________________________
__________________________________________________

Name of event (if applicable): ____________________________

Date of event: from _______________ to _______________
                                   YYYY-MM-DD            YYYY-MM-DD
Information on authorized representative of the sponsor or organizer signing this certification:
Name: ___________________________
Address: ________________________________________
____________________________________________________

We certify that the above-mentioned event is a foreign convention for purposes of the Excise Tax Act. We also agree to provide any additional information required to verify the above. If it is later proved that the event is not a foreign convention, we will pay back the rebate amount that the eligible supplier paid or credited for the convention facility and/or related convention supplies.

Signature                    ________________________
Date (YYYY-MM-DD) __________________________

Example of written documentation that generally confirms that a non-resident (other than tour operator) is eligible for a rebate on tour packages

Example of written documentation that generally confirms that a non-resident (other than a tour operator) is eligible for a rebate on tour packages

Name of registrant supplier: ___________________________
Street address: ______________________________________
__________________________________________________

Date of tour package: from _______________ to _______________
                                                YYYY-MM-DD         YYYY-MM-DD
Name of person: ____________________________
Street address: ________________________________________
____________________________________________________

If applicable:
Name of authorized representative:___________________________
Title: _________________________________________

We confirm that we would be entitled to claim a rebate for the eligible tour package under subsection 252.1(2) of the Excise Tax Act if we had paid the GST/HST and filed a rebate claim with the CRA. We agree to pay any GST/HST for any tour package purchased found not to be eligible for a rebate. We certify that we have met all of the following conditions:

  • We are not resident in Canada.
  • We purchased the eligible tour package otherwise than for resale in the ordinary course of a business.
  • The accommodation included in the tour package was made available to a non-resident individual.

Signature of individual or authorized representative
________________________________________________
Date (YYYY-MM-DD) ______________________________

Example of written documentation that generally confirms that a non-resident non-registered tour operator is eligible for a rebate on tour packages

Example of written documentation that generally confirms that a non-resident non-registered tour operator is eligible for a rebate on tour packages

Name of registrant supplier: ______________________________
Street address: _________________________________________
____________________________________________________
Date of tour package: from _______________ to _______________
                                                YYYY-MM-DD            YYYY-MM-DD
Name of person: _____________________________
Name of authorized representative: _____________________________
Title: ___________________________________
Street address: __________________________________________

We confirm that we would be entitled to claim a rebate for the eligible tour package under subsection 252.1(3) of the Excise Tax Act if we had paid the GST/HST and filed a rebate claim with the CRA. We agree to pay any GST/HST for any tour package purchased found not to be eligible for a rebate. We certify that we have met all of the following conditions:

  • We are not resident in Canada.
  • We are not registered for GST/HST purposes.
  • We purchased the eligible tour package for resale in the ordinary course of our business of selling tour packages.
  • We sold the eligible tour package to a non-resident.
  • Payment for the resale of the tour package was made outside Canada at a place where we (or our agent) was conducting business.
  • The accommodation included in the tour package was made available to a non-resident individual.

Signature of authorized representative ___________________________
Date (YYYY-MM-DD) _________________________________

 

As a GST/HST registrant, how do you 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.

To calculate the rebate amount, see How do you calculate and claim your 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.

To calculate the rebate amount, see How do you calculate and claim your 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 do you calculate and claim your 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 can you claim a deduction on your GST/HST return for the amount of GST/HST you 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 Penalties and interest for GST/HST.

Example of 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

Example of 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

On January 16, 2015, you sold 15 tour packages to a non-resident, non-registered tour operator for an all-inclusive price of $1,000 for each tour package. Each package includes the following items, taxable at 5% GST:

  • hotel accommodation (five nights in Alberta)
  • train transportation (two nights are spent on the train)

The tour operator meets all of the eligibility conditions for the rebate and confirms that it has resold the eligible tour packages to non-residents. You choose to credit a rebate amount to the tour operator.

Calculations
Details Amounts
Selling price ($ 1,000 × 15 persons) $15,000.00
GST ($15,000 × 5%) $750.00
Subtotal $15,750.00
Minus credit for rebate amount (5/7 × 50% × $750) ($267.86)
Amount the tour operator pays you $15,482.14

Note

Only the five nights in the hotel are eligible short-term accommodation. The two nights on the train do not qualify as short-term accommodation.

On your GST/HST return, you would include the following amounts:

Amounts to be included - GST/HST return
Details Amounts
Line 103 of your GST/HST return (or line 105 if you file your return electronically) $750.00
Line 107 of your GST/HST return (or line 108 if you file your return electronically) $267.86

You also have to file Form GST106 by the due date of your GST/HST return on which you claim the deduction on line 107 (or line 108 if you file your return electronically).

Example of 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

Example of 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

On May 25, 2015, you sold an eligible tour package to a non-resident consumer for an all-inclusive price of $2,000. All elements of the tour package are subject to the HST at 13%.

The package included:

  • four nights on a cruise ship
  • accommodation for six nights at a resort

The non-resident consumer paid you a deposit of 25% of the price of the tour package one month before the first night of accommodation is made available to the non-resident. You choose to credit the rebate amount to the non-resident.

Calculations
Details Amounts
Selling price $2,000
HST ($2,000 × 13%) $260
Subtotal $2,260
Less deposit ($500)
Minus credit for rebate amount (6/10 × (50% × $260)) ($78)
Amount owing $1,682
Total amount the non-resident pays you $2,182

Note

Only the six nights in the resort are short-term accommodation. The four nights on the cruise ship do not qualify as short-term accommodation.

On your GST/HST return, you would include the following amounts:

Amounts to be included - GST/HST return
Details Amounts
Line 103 of your GST/HST return (or line 105 if you file your return electronically) $260
Line 107 of your GST/HST return (or line 108 if you file your return electronically) $78

You also have to file Form GST106 by the due date of your GST/HST return on which you claim the deduction on line 107 (or line 108 if you file your return electronically).

Examples of 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

Examples of 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

You are the organizer of a foreign convention held in Ontario, and you are registered for the GST/HST. You invoice the non-resident sponsor of the convention for the following services:

  • meals and catering
  • meeting rooms and convention material
  • exhibit decorations
Calculations
Item Charge HST FCTIP rebate
Meals and catering $10,000 $1,300 $650
Meeting rooms $5,000 $650 $650
Convention materials $10,000 $1,300 $1,300
Exhibit decorations $5,000 $650 $650
Total $30,000 $3,900 $3,250

Note

A rebate is only available for 50% of the GST/HST paid for food, beverages, or items supplied under a catering contract.

Calculations
Details Amounts
Invoice total $30,000
Total HST $3,900
Subtotal $33,900
Minus credit for rebate amount ($3,250)
Net amount sponsor pays $30,650

On your GST/HST return, you would include the following amounts:

Amounts to be included - GST/HST return
Details Amounts
Line 103 of your GST/HST return (or line 105 if you file your return electronically) $3,900
Line 107 of your GST/HST return (or line 108 if you file your return electronically) $3,250

You also have to file Form GST106 by the due date of your GST/HST return on which you claim the deduction on line 107 (or line 108 if you file your return electronically).

What happens 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.

Are you 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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