Two of the remaining GST/HST place of supply rules memoranda were released today by the CRA. Both GST/HST Memorandum 3-3-5 and GST/HST Memorandum 3-3-5-1 came in a series of memoranda to replace the previously widely referred to GST/HST Technical Information Bulletin B-103 “Place of supply rules for determining whether a supply is made in a province”. GST/HST Memorandum 3-3-6-1 and GST/HST Memorandum 3-3-7 were mentioned in GST/HST Memorandum 3-3-5 but are yet to be released.

GST/HST Memorandum 3-3-5 “Place of Supply in a Province – General Rules for Intangible Personal Property” outlines the regulations determining the GST/HST implications of Intangible Personal Property (IPP) transactions within Canada. It clarifies the place of supply rules used to ascertain whether a transaction involving IPP occurs in a participating province and thus incurs the provincial portion of the HST in addition to the federal GST. Key factors include the primary use of the property, the nature of the rights associated with it, and the addresses obtained from the recipient during the transaction.

In addition to general rules, the memorandum outlines specific exceptions for different types of IPP, such as those related to telecommunications and transportation services (GST/HST Memoranda 3-3-6-1 and 3-3-7 respectively). It also emphasizes the importance of addressing limitations on the use of such rights, which may affect the applicable tax rate. For instance, if a supply has no restrictions on its primary location of use, the rules allow for greater flexibility in determining the place of supply based on the recipient's home or business address.

GST/HST Memorandum 3-3-5-1 “Place of Supply in a Province Specific Rules for Intangible Personal Property” focuses on the specific rules concerning the place of supply for IPP. The memorandum details the specific place of supply rules for those related to passenger transportation and tangible and real property.

For instance, when a transportation pass is sold, the place of supply is determined by the locations where the transportation services commence and terminate. If the service begins and terminates in a participating province, it is subject to HST. Conversely, if it begins in a non-participating province or terminates outside Canada, it is subject to the GST. These specific rules aim to create a clear framework for taxation based on the nature and location of the supply.

Furthermore, the memorandum outlines how supplies of IPP related to tangible personal property are treated. For these supplies, the ordinary location of the tangible property plays a crucial role in determining the place of supply. If the tangible property is primarily located in participating provinces, the intangible supply is taxed at the harmonized rate; otherwise, it falls under the non-participating province rules.