Glossary of HST
- Added property
The term added property refers to tangible personal property or software that is a component part or is property (such as a label or a screw) that is incorporated or combined with other property. Added property also includes packing materials used in packing other goods. With the use of a valid Export Distribution Centre (EDC) certificate, a registrant is entitled to import, or acquire in Canada, property for use or supply as “added property” without having to pay the GST/HST.
It does not include goods or software added to capital property you own or to any of your property that is not for sale.
- All-inclusive price
Generally, an all-inclusive price means a single price for all property and services sold together in a package. However, in the tourism industry, sometimes prices for certain property or services are listed on an invoice for information purposes. We would accept that such packages are sold for an all-inclusive price.
An allowance means any payment, periodic or otherwise, which you as a member of a partnership receive from the partnership, in addition to your partnership income, without having to account for its use. A reasonable allowance is not included in your income for income tax purposes. For example, you usually do not include an allowance for a motor vehicle in your income when it is based solely on a reasonable per-kilometre rate.
For GST/HST purposes, an associate is generally used to describe a voluntary relationship between persons where one controls the other. An association may exist, for example, between two or more corporations, between an individual and a corporation, or between an individual and a partnership or trust. Also, a person is associated with another person if each of them is associated with the same third person.
- Band-empowered entity
A band-empowered entity is a corporation, board, council, association, society, or other organization that is owned or controlled by a band, a tribal council, or a group of bands other than a tribal council. This policy is applicable to those band-empowered entities situated on a reserve. A band-empowered entity is considered to be situated on a reserve when the entity maintains a presence on reserve.
An entity is considered to be owned by a band, a tribal council or a group of bands other than a tribal council if:
- the band, tribal council or group of bands owns all or substantially all (90 per cent) of the shares or holds all or substantially all of the memberships of the entity; or
- the band, tribal council or group of bands holds title to the assets of the entity or controls its disposition, such that in the event of wind up or liquidation, these assets are vested in the band.
An entity is considered to be controlled by the band, tribal council or group or bands if:
- the band, tribal council, group of bands or individual members of the band, tribal council or group of bands, appoint or elect a majority of the members of the governing body of the entity (for example, directors); and
- the entity is required by legislation, by-laws, or an operating agreement, to submit to the band, tribal council or group of bands, its operating budget and where applicable, its capital budget for review and approval.
- Band management activities
Band management activities are activities or programs undertaken by a band or band-empowered entity that are not commercial activities for which they would otherwise be entitled to an input tax credit (ITC). In determining whether the acquisition of a supply is for band management, the output of the activity or program will be the determining factor, as opposed to the objectives of the activity or program. For example, a band’s objective or program may be to provide employment and training to band members. To achieve this objective, the band may form a commercial enterprise which will provide on-the-job training and also create employment. Although the band’s objective is to train persons, the output is a commercial activity for which there is an entitlement to ITCs. As a result, supplies acquired for use in this band program are not considered to have been acquired for use in band management activities.
Bank, in respect of a fiscal year, means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act; but does not include an insurer.
- Basic service
Basic service means a type of service that could be performed in a customs bonded warehouse. You do not have to actually perform the service in a customs bonded warehouse, but you should be able to perform it on the goods in their present stage of processing, and in a customs bonded warehouse. Basic services include the following:
- disassembling or reassembling the goods if they have been assembled or disassembled for packing, handling, or transport;
- displaying, inspecting, labelling, packing, storing, or testing the goods;
- removing a sample of the goods for soliciting orders; and
- cleaning, diluting, normal maintenance and servicing, preserving, separating defective goods from prime quality goods, sorting or grading, trimming, filing, slitting, cutting, or complying with any applicable law of Canada or a province or territory, as long as the characteristics of the goods are not materially altered.
- Basic tax content
Basic tax content of a property generally means the amount of GST/HST that you paid on the property, and on any improvements to the property, less any amounts that were reimbursed to you (such as rebates or remissions, but not input tax credits). You also have to consider the fair market value of the property as well as the value at last acquisition (including any improvements).
- a manufacturer or vendor of a new mobile home or floating home;
- a person who buys an unoccupied new house for resale;
- a person who acquires an interest in a house as part of that person’s business or trade while the house is under construction or substantial renovation, and completes or engages another person to complete the construction or substantial renovation; or
- a person who has converted non-residential property into a house without substantially renovating the property.
For rebate purposes, a person you hire to provide construction services on land you lease or own is not considered to be a builder. For example, a contractor you hire to build your new house, or to substantially renovate your existing house, is not normally considered to be the builder for rebate purposes.
A business may include a profession, calling, trade, manufacture or undertaking of any kind, whether or not the activity or undertaking is performed for profit. It also includes any activity done on a regular and continuous basis that involves providing of property by way of lease, licence or similar arrangement, but does not include an office or employment.
- Calendar quarter
A calendar quarter means a period of three consecutive months ending on the last day of any of the following months: March, June, September, or December.
- Calendar year
Calendar year is a year that begins on January 1 and ends on December 31.
- Camping accommodation
Camping accommodation means a campsite at a campground or recreational trailer park in Canada that is rented continuously as a place of lodging for periods of less than one month for the same individual. It includes water, electricity, and waste disposal services if provided with the campsite and accessed by an outlet or hookup at the campsite.
- Canadian partnership
- Canadian rights
The Canadian rights for intangible personal property (IPP), means that part of the property that can be used in Canada.
- Capital personal property
A capital personal property includes depreciable property that is eligible or would be eligible for a capital cost allowance for income tax purposes. It also includes any personal property, except depreciable property, the sale of which would give rise to a capital gain or loss for income tax purposes. For GST/HST purposes, capital personal property does not include property in Classes 12, 14, or 44 of Schedule II to the Income Tax Regulations.
- Capital property
For GST/HST purposes, is based on the meaning of the term for income tax purposes. It is:
- any depreciable property (that is, property that is eligible or would be eligible for a capital cost allowance deduction in calculating your income for income tax purposes); and
- any property, other than depreciable property, from which any gain or loss, if you disposed of the property, would be a capital gain or capital loss for income tax purposes.
Capital property is property that you buy for investment purposes or to earn income from its use rather than its sale. It may include real property, such as land or a building, or personal property, such as equipment or machinery that a business uses in its commercial or exempt activities.
Carrier means a person who supplies freight transportation services, whether that person actually performs the services or not. A person needs only to accept responsibility as the supplier of the freight transportation service to be considered the carrier.
A person who has a contract with a shipper to move the shipper’s goods from one place to another is still considered to be a carrier of the goods, even if the work is subcontracted to another person who actually performs the entire freight transportation service.
For GST/HST purposes, a person does not need a carrier licence to be a carrier. For example, if independent owner-operators of highway tractors and courier vehicles provide freight transportation services, they are carriers whether or not they are required by law to be licensed as carriers.
- Certified amount
Certified amount is the part of the purchase price (excluding any GST/HST and provincial tax) that the supplier has certified as being reasonably attributable to special features that have been incorporated into, or adaptations that have been made to, the vehicle for the purpose of its use by or in transporting an individual using a wheelchair, or to equip the vehicle with an auxiliary driving control that allows an individual with a disability to operate it.
Charity means a registered charity or registered Canadian amateur athletic association for income tax purposes, which has a registration number that allows it to issue official receipts for income tax purposes. A charity does not include a public institution for GST/HST purposes, however, it can include an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality.
- Claim period
Claim period of a person at any time means:
(a) where the person is at that time a registrant, the reporting period of the person that includes that time; and
(b) in any other case, the period that includes that time and consists of either:
(i) the first and second fiscal quarters in a fiscal year of the person; or
(ii) the third and fourth fiscal quarters in a fiscal year of the person.
- Closely related Canadian partnerships
A particular Canadian partnership and another Canadian partnership are closely related if all or substantially all of the interest in the other Canadian partnership is held by:
- the particular Canadian partnership;
- a corporation or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member; or
- any combination of corporations or partnerships referred to above.
Two Canadian partnerships are also closely related to each other if one:
- owns at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the other partnership is a member; or
- holds all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the other partnership is a member.
- Closely related Canadian partnerships and corporations
- at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the particular corporation are owned by:
- the partnership;
- a corporation or a Canadian partnership, that is a member of a qualifying group of which the partnership is a member; or
- any combination of corporations or partnerships referred to above;
- at least 90% of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the particular corporation is a member are owned by the Canadian partnership.
- at least 90% of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the partnership is a member are owned by the particular corporation.
- all or substantially all of the interest in the partnership is held by:
- the particular corporation;
- a corporation or a Canadian partnership that is a member of a qualifying group of which the particular corporation is a member; or
- any combination of corporations or partnerships that includes the particular corporation or another member of a qualifying group of which the particular corporation is a member;
- all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the partnership is a member is held by the particular corporation; or
- all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the particular corporation is a member is held by the partnership.
- at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the particular corporation are owned by:
- Closely related corporations
Generally, two corporations are considered to be closely related if at least 90% of the value and number of the issued and outstanding shares of the capital stock of one of the corporations, having full voting rights under all circumstances, are owned by:
- the other corporation;
- a qualifying subsidiary of the other corporations;
- a corporation of which the other corporation is a qualifying subsidiary;
- a qualifying subsidiary of a corporation of which the other corporation is a qualifying subsidiary; or
- any combination of the corporations or subsidiaries referred to above.
- Commercial activity
Commercial activity means any business or adventure or concern in the nature of trade carried on by certain persons, but does not include:
- the making of exempt supplies; or
- any business or adventure or concern in the nature of trade carried on without a reasonable expectation of profit by an individual, a personal trust, or a partnership where all the members are individuals.
However, commercial activity includes a supply of real property, other than an exempt supply, by any person, whether or not there is a reasonable expectation of profit, and anything done in the course of making the supply or in connection with the making of the supply.
- Commercial service
Commercial service performed on goods generally means any service performed on the goods, other than:
- a service of shipping the goods when a carrier provides the shipping; and
- a financial service.
- Computer-related services
The computer-related service means:
- a technical support service that is provided by means of telecommunications and relates to the operation or use of computer hardware or software; or
- a service involving the electronic storage of information and computer-to-computer transfer of information.
A consignee is a person to whom the goods are to be delivered.
- Constructive importer
Consumer refers to a particular individual who acquires or imports property or a service for his or her personal consumption, use, or enjoyment, or for the personal consumption, use, or enjoyment of another individual at the particular individual’s expense. The particular individual does not use the property or service in commercial activity or to make an exempt supply.
- Continuous freight movement
A continuous freight movement means the transportation of goods by one or more carriers to a destination specified by the shipper of the goods, where all freight transportation services supplied by the carriers are supplied due to instructions given by the shipper of the goods.
- Continuous journey
A continuous journey of an individual or a group of individuals means the set of all passenger transportation services provided to the individual or group for which a single ticket or voucher for all the services is issued. A continuous journey also exists where two or more tickets or vouchers are issued for two or more legs of a single journey of the individual or group on which there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued, and all the tickets or vouchers are issued by the same supplier or by two or more suppliers through one agent acting on behalf of all the suppliers. This is provided that either:
- all such tickets are supplied at the same time and evidence satisfactory to the Minister is maintained by the supplier or agent that there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued; or
- the tickets or vouchers are issued at different times and evidence satisfactory to the Minister is submitted by the supplier or agent that there is no stopover between any of the legs of the journey for which separate tickets or vouchers are issued.
- Continuous outbound freight movement
Continuous outbound freight movement means the transportation of goods by one or more carriers from a place in Canada to a place outside Canada, or to another place in Canada from which the goods are to be exported. After the shipper transfers possession of the goods to a carrier, and before the goods are exported, the goods cannot be further processed, transformed, or altered in Canada, except to the extent necessary to transport the goods.
A convention means a formal meeting or assembly that is not open to the general public. However, a convention does not include a meeting or assembly mainly intended to:
- provide any type of amusement, entertainment, or recreation;
- conduct contests or games of chance; or
- conduct business, unless it is during a trade show that is not open to the general public.
An event, such as one organized for incentive trips for employees that have business meetings as its principal purpose is usually not a convention because the definition of convention excludes a meeting or an assembly the principal purpose of which is to transact the business. However, the event may be a convention if the meetings are held during a trade show that is closed to the general public.
- Convention facility
A convention facility is any premises leased or provided under a licence to a sponsor or organizer of a convention for use exclusively as the site for the convention. It includes the sites that are made available to the exhibitors at the convention.
- Co-operative housing corporation
Co-operative housing corporation (co-op) is one that is established to provide a residential unit to its members by way of lease, licence or similar arrangement for occupancy as a place of residence. A co-op operates at or near cost and at least 90% of its members are individuals or other co-ops. None of its members (except other co-op corporations) have more than one vote in the affairs of the co-op.
A corporation is a group of people authorized to act as an individual, recognized by law as a single entity in business. That entity can enter into contracts and own property. A corporation can incorporate at either the federal, provincial or territorial level and is identified by the terms “limited”, “LTD”, “Incorporated”, “Inc.”, “Corporation”, or “Corp.”. Whatever the term, it must appear with the corporate name on all documents, stationary, and so on, as it appears on the incorporation document.
A coupon is a document or other device, such as a voucher, receipt, or ticket that can be redeemed for a product or service or can be used to buy a product or service, but does not include a gift certificate or a barter unit.
A courier means a commercial carrier that is engaged in scheduled international transportation of shipments of goods other than goods imported by mail.
- Customer’s goods
- Designated charity
Designated charity is a charity (within the meaning assigned by the subsection 248(1) of the Income Tax Act) that provides employment assistance to individuals with disabilities, supplies services that are performed by such individuals to clients, and has been approved by the Minister of National Revenue to make its supplies of these services taxable when provided to a GST/HST registrant.
- Designated municipal property
Designated municipal property refers to property of a person who is, at any time, designated to be a municipality for purposes of claiming the public service bodies‘ rebate. Generally, it is property, or an improvement to it, that the person intended, at the time of acquisition to consume, use or supply more than 10% in activities specified in its designation and an amount in respect of the property or improvement to it has been included in the person’s calculation of non-creditable tax charged. Once property qualifies as designated municipal property, it is always treated as such. This definition came into force on February 1, 2004.
- Designated municipality
Designated municipality refers to a person that is designated to be a municipality for purposes of claiming the public service bodies’ rebate, but only in respect of activities specified in the designation that involve the making of supplies (other than taxable supplies) by the person of municipal services.
Destination relating to a continuous freight movement of goods means the place specified by the shipper (usually on the bill of lading or other shipping documents) where possession of the goods is transferred to the person to whom the goods are consigned or addressed by the shipper.
- Direct input
Direct input means property or a service other than:
Distribution has the same meaning assigned in subsection 55(1) of the Income Tax Act. A distribution is the direct or indirect transfer of property of a corporation to one or more of its corporate shareholders such that each transferee corporation that receives property on the distribution receives its pro rata share of each type of property owned by the disrupting corporation immediately before the distribution.
- Domestic inventory
Domestic inventory of a person means tangible personal property that the person acquires in Canada, or acquires outside Canada and imports, for the purpose of selling the property separately for consideration in the ordinary course of a business carried on by the person.
A duplex is a residential complex situated on a single legal land description that contains not more than two residential units where each unit contains private kitchen facilities, a private bath and a private living area. This includes a single-family house that has a separate apartment for rent. For purposes of the new residential rental property rebate, references to a single unit residential complex include a duplex.
An election is a way for businesses and organizations to choose various options that may make it easier to comply with the GST/HST. These options allow you to adapt the administrative requirements of GST/HST to your business activities. Each election has its own eligibility requirements.
- Eligible tour package
Packages that include a convention facility or related convention supplies are not tour packages for this rebate. However, you may qualify for a rebate if you are a sponsor or organizer of a foreign convention.
- Eligible capital property
Eligible capital property generally means property that does not physically exist but that gives you a lasting economic benefit. Some examples are goodwill, or franchises, concessions or licenses for an unlimited period.
- Established community
As a general rule, established community means a body of people who reside in the same locality and who are permanently settled in that location. A location will not be considered an established community if it lacks essential services at the location (for example, a basic food store, a basic clothing store with merchandise in stock (not a mail-order outlet), access to housing, certain medical assistance, and certain educational facilities), or if such services are not available within a reasonable commuting distance.
- Excluded input
Excluded input means capital property of a person or any property or service that is acquired, imported, or brought into a participating province by the person for use as an improvement to the capital property.
Exclusive in respect of the consumption, use, or supply of property or a service by a person (other than a financial institution) means all or substantially all of the consumption, use, or supply of the property or service. For a financial institution, exclusive in respect of the consumption, use, or supply of a property or a service means 100% of the consumption, use, or supply.
- Exclusive input
- directly and exclusively for the purpose of making taxable supplies for consideration; or
- directly and exclusively for purposes other than making taxable supplies for consideration.
- Exempt supplies
Exempt supplies are goods and services that are not subject to GST/HST. GST/HST registrants cannot claim input tax credits to recover the GST/HST they paid or payable on expenses related to making these supplies.
- Export revenue
Export revenue means revenue from:
- domestic inventory you sell outside Canada;
- zero-rated exports;
- sales of added property you acquired for use in processing property for export; and
- sales of services of processing, storing, or distributing goods of other persons where the property is exported after the service is completed.
Export revenue does not include revenue from the sales of:
- fuel you sell to registered international carriers for the transportation of people or goods by ship, aircraft, or railway;
- excisable goods, such as alcohol or tobacco, when the purchaser exports them in bond;
- goods from duty free shops you sell to individuals for export;
- a jig, die, mould, tool, or fixture (or an interest in one) to a non-registered non-resident when it will be used to manufacture or produce goods for the non-resident; and
- a continuous transmission commodity transported by pipeline or powerline, such as oil, natural gas, or electricity, that you sell to a non-registered person who exchanges the good with a registrant in Canada for an identical good that is not in Canada.
- Export revenue percentage
- External supplier
An external supplier can be a charity, a public institution or a qualifying non-profit organization (other than a hospital authority or a facility operator), that makes ancillary supplies, facility supplies, or home medical supplies.
- Facility operator
- Fair market value
- Final recipient
The final recipient for a computer-related service or access to the Internet, means a person who is the recipient of a supply of the service or access and who acquires it otherwise than for the purpose of supplying it to another person.
- Financial institution
Financial institution, at any time, means a person who is at that time a financial institution under section 149.
- Finished inventory
Finished inventory means goods that are in the state in which you will sell them or use them as added property in the course of your business.
- First Nations goods and services tax (FNGST)
The FNGST is a 5% tax on taxable supplies of goods and services on certain First Nations lands. This tax applies when a band council, or other governing body, of a First Nation passes its own law imposing FNGST. The Canada Revenue Agency administers FNGST on behalf of the First Nation.
- First Nations Tax (FNT)
The FNT is a tax on the sale of listed products on some First Nations reserves. Some band councils have passed bylaws that impose FNT on listed products. A listed product refers to alcoholic beverages, fuel, and tobacco products that are specifically mentioned in the band bylaw.
- Fiscal year
Fiscal year means, where a person has elected to change their fiscal year, the period that the person elected to be the fiscal year of the person, and, in all other cases, the tax year of the person.
- Floating home
A floating home is a structure that is made up of a floating platform and a building that is permanently affixed to the floating platform and that is designed to be occupied as a place of residence for individuals. A floating home does not include any freestanding appliances or furniture sold with the structure, and it cannot be readily adapted for self-propulsion (it is not a house-boat or pleasure craft).
- Foreign convention
Foreign convention is a convention held in Canada where:
- at the time the sponsor of the convention determines the amount to be charged for the admissions, it is reasonably expected that at least 75% of the admissions will be provided to non-residents of Canada; and
- the sponsor of the convention is an organization whose head office is situated outside Canada or, if the organization has no head office, the member or majority of members having management and control of the organization is non-resident.
To determine if your convention qualifies as a foreign convention, you have to determine the percentage of non-resident delegates you can reasonably expect to attend. You can use the percentage of non-resident delegates:
- who attended previous conventions;
- who are usually invited to attend the convention; or
- who are listed as members of the organization.
You can also use any other reasonable method.
You have to keep documents to support how you determined the percentage of Canadian and non-resident delegates. You have to make this information available to us on request. Documents must be in either English or French, or you must provide a translation in English or French. You have to request permission to keep your records relating to your rebate claims outside Canada. For more information on books and records, see Books and records.
If you determined that a convention is a foreign convention because non-resident delegates will likely make up at least 75% of the total of those attending, and you discover later that there were less than 75% non-resident delegates at the convention, the convention is still a foreign convention.
- Freight transportation service
Freight transportation service means the movement of goods by rail, water, highway, or air. It includes postal and courier services, as well as incidental property or services supplied by a carrier, such as warehouse, packing, and loading services, whether or not a separate charge is made for them. These incidental charges may be subject to GST/HST, or zero-rated depending on the GST/HST status of the basic freight charge. A freight transportation service does not include a service provided by the supplier of a passenger transportation service of transporting an individual’s baggage in connection with the passenger transportation service.
In accounting terms, goodwill is the excess of the purchase price of a business over the fair market value of the net assets of the business.
Government refers to the federal, provincial or territorial levels of government.
- Government funding for the purposes of public service body rebate
Government funding refers to an amount of money (including a forgivable loan) that is easily identifiable and is paid by a grantor:
- to support or promote the non profit organization’s (NPO) objectives but not to pay for goods or services supplied by the NPO to the grantor; or
- for an exempt sale of goods or services made by the NPO if the goods and services are not for the use or consumption of the grantor or persons related to the grantor (for example, government funding of a local health unit to supply medical services to the public).
- Grantor for the purposes of public service body rebate
A grantor means:
- a government or municipality, other than a corporation all or substantially all of whose activities are commercial activities or the supply of financial services or any combination thereof;
- a band (within the meaning assigned by section 2 of the Indian Act);
- a corporation that is controlled by a government, a municipality or a band referred to in paragraph (b) and one of the main purposes of which is to fund charitable or non-profit endeavours; and
- a trust, board, commission or other body that is established by a government, municipality, band referred to in paragraph (b) or corporation described in paragraph (c) and one of the main purposes of which is to fund charitable or non-profit endeavours.
- Gross revenue for charities
Gross revenue includes business income, donations, grants, gifts, property income, and investment income, less any amount considered a capital loss for income tax purposes. You can determine your gross revenue by referring to your Form T3010-1, Registered Charity Information Return, which you file for income tax purposes.
Whether your charity is incorporated or unincorporated, you have to use the gross revenue of your organization as a whole (the legal entity) to determine if you qualify as a small supplier under this test.
- Gross revenue test
The annual limit for the gross revenue test for a charity is $250,000. When calculating your gross revenue for this test, you do not have to determine if the goods and services you sell or provide are subject to GST/HST. The test works as follows:
- if you are in your first fiscal year, you do not have to register for GST/HST;
- if you are in your second fiscal year, calculate your gross revenue from your first fiscal year. If this amount is $250,000 or less, you do not have to register (regardless of your total revenue from taxable goods and services); or
- if this is neither your first nor your second fiscal year, calculate your gross revenue in each of your two previous fiscal years. If this amount is $250,000 or less in either of these years, you do not have to register, (regardless of your total revenue from taxable goods and services).
- GST and HST
The GST is a tax that you pay on most goods and services sold or provided in Canada. In New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and British Columbia, the GST has been blended with the provincial sales tax and is called the HST.
- Hospital authority
Hospital authority means an organization that operates a public hospital and that is designated by the Minister as a hospital authority for GST/HST purposes.
Generally, a house includes a detached or semi-detached house, a condominium unit, a townhouse, a unit in a co-operative housing corporation, a mobile or modular home, a floating home, or a duplex. It may also include nearby buildings such as a detached garage or shed, plus the land around and underneath them all, up to half a hectare (1.23 acres) or more in some cases (for example, when a municipality imposes a minimum lot size or where excess land is necessary to access public roads) that is reasonably necessary for the use and enjoyment of the house as a place of residence.
It may also include a bed and breakfast, a hotel, a motel, an inn, a boarding or lodging house, or similar structures where rooms are rented for short term accommodation to the public. To be eligible for a new housing rebate in these cases, the building has to be used more than 50% as a place of residence by you or a relation, either individually or in combination. If 50% or less of the house that includes the bed and breakfast is used as your primary place of residence, or that of a relation, only the part that is the primary place of residence will be eligible for the new housing rebate.
Import means import into Canada.
Improvement to a capital property is generally any property or service acquired or imported by a person to improve the capital property when the amount paid or payable for that property or service is included in the adjusted cost base of the capital property for income tax purposes.
- Incentive house or incentive travel company
Incentive house or incentive travel company is a business that assembles some or all of the elements of an incentive trip by buying them from travel service providers (for example, airline companies and hotels) and offering them for sale to another business. The incentive house bills the client for these costs along with its service charge. The client in turn offers the incentive trip to its employees or sales agents. In some cases, an incentive house may qualify as an organizer of a convention.
- Incentive travel or incentive trip
Incentive travel or incentive trip is a trip that a business offers as an award to recognize or reward the productivity of its employees or sales agents. It may include business meetings, seminars, or conventions, as long as the participants are all from the same organization. If an incentive trip includes business meetings, the meetings may qualify as a convention. In this case, an in-house planner can be a sponsor.
An Indian is a person who is registered under the Indian Act. An Indian does not have to live or maintain a residence on a reserve. Such a person may be issued a Certificate of Indian Status by the Department of Indian Affairs and Northern Development.
- Indian Band
An Indian Band, for purposes of the GST/HST, includes both a band council and a tribal council. The band council is the primary unit of an Indian government. A tribal council is another level of Indian government. It is a grouping of bands with a common interest who have joined together to provide advisory or program services for two or more bands. Band council members compose the tribal council Board of Directors.
- In-house planner
In-house planner is a member or employee of a business who organizes a business meeting or incentive trip for the business. The business cannot be a travel service provider. However, it may buy services directly from travel service providers, or buy all or part of a tour package from an incentive house or travel organizer. An in-house planner can be a sponsor of a convention, if the business meeting it organizes qualifies as a convention.
- Input tax credit (ITC)
ITC means a credit that GST/HST registrants can claim to recover the GST/HST they paid or payable for goods or services they acquired, imported into Canada, or brought into a participating province for use, consumption, or supply in the course of their commercial activities.
Insurer, in respect of a fiscal year, means a person who is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an insurance business or under the laws of another jurisdiction to carry on in that jurisdiction an insurance business and carries on, at any time in the fiscal year, an insurance business as its principal business in Canada.
- Intangible personal property
Intangible personal property is generally a right rather than a physical object. It includes such things as contractual rights, options, intellectual property, rights in relation to goods that are not in possession, and other rights that are enforceable by the courts.
- Interest in a partnership
For the purposes of this election, a person (corporation or partnership), or a group of persons, holds, at any time, all or substantially all of the interest in a partnership if at that time, the person, or every person in the group, is a member of the partnership and the person is, or the members of the group collectively are, all the following:
- entitled to receive at least 90% of the total of all amounts, each of which is the share of the partnership’s income from all sources that each of its members is entitled to receive for the last fiscal period (within the meaning of the Income Tax Act) of the partnership that ended before that time (or if the partnership’s first fiscal period includes that time, for that period), or if the partnership has no income, the total of all amounts each of which is the share of the income of the partnership that each member of the partnership would be entitled to receive if the income of the partnership from each source were one dollar;
- entitled to receive at least 90% of the total amount that would be paid to all members of the partnership (other than amounts that would be paid as a share of partnership income) if it were wound up; and
- able to direct the business and the affairs of the partnership, or would be able to do so if no secured creditor had any security interest in an interest in, or the property of, the partnership.
- International flight
- An international flight means any flight (other than a flight originating and terminating in Canada) of an aircraft that is operated by a person in the course of a business of supplying passenger transportation services.
- International voyage
- An international voyage means any voyage (other than a voyage originating and terminating in Canada) of a vessel that is operated by a person in the course of a business of supplying passenger transportation services.
- Joint Venture
A joint venture is an arrangement where two or more persons work together in a limited and defined business undertaking. Ordinarily, all participants of the joint venture contribute assets, share risks, and have mutual liability.
A joint venture agreement is not a continuing relationship between participants. For example, the venture may be for one specific business project. Once the project is completed, the joint venture ceases to exist. Generally, participants in a joint venture name one participant to be the “joint venture operator“. This person accounts for the day-to-day operations of the joint venture. The business number (BN) of the operator is used. The operator can add GST/HST and payroll accounts to his/her BN if he/she wants to account for the joint venture activities separate from other activities.
The leg of a journey on a conveyance means a part of the journey that begins where passengers embark or disembark the conveyance or where it is stopped to allow for its servicing or refuelling and ends where it is next stopped for any of those purposes.
- Legal aid plan
Legal aid plan means a legal aid plan that is administered under the authority of a provincial government.
- Limited partnership or Limited liability partnership (LLP)
A limited partnership exists when some are partners and others are limited partners. Partners will operate the business on a day-to-day basis. The limited partners contribute capital, take no part in control or management, and have limited liability for debts.
A LLP has some characteristics of a partnership and a corporation. Normally, professionals such as accountants and lawyers form LLP’s. All partnerships should draw up an agreement with the assistance of a lawyer. This agreement is to protect all partners in the event of a disagreement, death of a partner, or closure of the business.
- Listed financial institution
A listed financial institution includes a person that is a chartered bank, an investment dealer, a trust company, an insurance company, a credit union, an investment plan, a tax discounter, or a person whose principal business is lending money.
- Major addition
For an addition to qualify for a new housing rebate, the construction of the addition must change the character of the existing unit to such a fundamental extent that the resulting structure is essentially a new single unit residential complex or residential condominium unit. This fundamental change could mean that the original unit together with the addition form a newly constructed single unit residential complex or residential condominium unit, or that the existing unit was incorporated into the major addition to form the newly constructed single unit residential complex or residential condominium unit.
Membership includes a right granted by a particular person that entitles another person to services that are provided by, or to the use of facilities that are operated by, the particular person and that are not available, or are not available to the same extent or for the same fee or charge, to persons to whom such a right has not been granted, and also includes such a right that is conditional on the acquisition or ownership of a share, bond, debenture or other security.
Sales of memberships made by public sector bodies, excluding charities, can be exempt or taxable depending on the type of benefits the members are entitled to. The following benefits are permitted when determining whether sales of memberships made by public sector bodies are exempt:
- an indirect benefit that is intended to accrue to all members collectively (e.g., a trade association that substantially improves sales or lobbying by a ratepayers’ association on behalf of all members);
- the right to receive services supplied by the public sector body that are in the nature of investigating, conciliating, or settling complaints or disputes involving members;
- the right to vote at or participate in meetings;
- the right to receive or acquire goods and services for an additional fee equal to their fair market value;
- the right to receive a discount for goods or services sold by the organization when the total value of all the discounts is insignificant (less than 30%) in relation to the membership fee. For example, a $100 membership fee provides members with a $5 discount for 10 admissions to the theatre. This membership would be taxable since the total value of the discounts is significant (30% or more) in relation to the membership fee whether or not the discounts are used; or
- the right to receive periodic newsletters, reports, or other publications if:
- the value of the newsletters, reports, and publications is insignificant (less than 30%) in relation to the membership fee; or
- the newsletters, reports, and publications provide information on the organization’s activities or financial status, except if their value is significant in relation to the membership fee and a fee is ordinarily charged to non-members.
Memberships in a club are taxable if the main purpose of the club is to provide dining, recreational, or sporting facilities to its members, such as a membership in a golf club for public sector bodies (excluding charities).
The definition of mineral includes the following: ammonite gemstone, bituminous sands, calcium chloride, silica, gravel, coal, kaolin, oil shale, sand and petroleum, natural gas, and related hydrocarbons.
- Mobile home
A mobile home is a building, the manufacture and assembly of which is completed or substantially completed, that is equipped with complete plumbing, electrical, and heating facilities. It is designed to be moved to a site for installation on a foundation and connection to service facilities, and to be occupied as a place of residence. This definition also includes a modular home. It does not include travel trailers, motor homes, camping trailers, or other vehicles or trailers designed for recreational use.
- Modification service
Modification service means a service (including parts) performed on a motor vehicle to specially equip or adapt the vehicle for its use by or in transporting an individual using a wheelchair, or to specially equip the vehicle with an auxiliary driving control to allow an individual with a disability to operate it.
A rebate for modification services is only available where the modification services have been performed on a vehicle outside Canada or outside a participating province and brought back into Canada or into a participating province (subject to tax on the value added). Modification services performed within Canada or in a participating province are zero-rated.
Before November 27, 2006, a rebate for a modification service performed outside Canada or outside a participating province and imported or brought back into Canada or into a participating province was not available if the vehicle was used by anyone except to the extent reasonably necessary to deliver it, to import it, or to bring it into NS, NB, or NL:
- after the modification service was performed; and
- before the vehicle was imported into Canada or brought into NS, NB, or NL.
After November 26, 2006, this restriction has been removed and a vehicle purchased after April 3, 1998, that was used after modification would now qualify for this rebate.
- Modular home
A modular home is considered to be a mobile home for purposes of the GST/HST new housing rebate. A modular home is a factory-built house or building intended for residential occupancy that comprises “modules” with three walls and a roof or ceiling. It has to be equipped with complete plumbing, electrical, and heating facilities, and designed to be moved to a site for installation on a foundation and to be connected to service facilities, and used as a place of residence. In addition, the modules are to be in as finished a condition as possible before leaving the manufacturer’s premises, considering that they must be transported.
- Multiple unit residential complex
Multiple unit residential complex means a residential complex that contains more than one residential unit, but does not include a condominium complex. For purposes of this rebate, a multiple unit residential complex does not include a duplex.
Municipality means an incorporated city, town, village, metropolitan authority, township, district, county, rural municipality, or other incorporated municipal body however designated, and any other local authority that the Minister of National Revenue may determine to be a municipality.
- Non-attributable input
Non-attributable input of a person means property or a service that is:
- Non-profit organization (NPO)
- It is organized and operated solely for non-profit purposes.
- It does not distribute or make available any of its income for the personal benefit of any proprietor, member, or shareholder, unless the proprietor, member, or shareholder is a club, a society, or an association that has, as its primary purpose and function, the promotion of amateur athletics in Canada.
A non-resident means a person who does not reside in Canada.
- Non-selected public service body activities
Non-selected public service body activities are activities other than:
- those activities for which a person was designated as a municipalities; or
- activities engaged in the course of:
- fulfilling responsibilities as a local authority;
- operating a public hospital, an elementary or secondary school, a port-secondary college or technical institute, a recognized degree-granting institution or a college affiliated with or research body of such a degree-granting institution;
- making facility supplies, ancillary supplies or home medical supplies or operating a qualifying facility for use in making facility supplies.
- Operative extent
The operative extent of a particular property or service is the extent to which the consumption or use of the property or service is for the purpose of making taxable supplies for consideration, or the extent to which the consumption or use of the property or service is for purposes other than making taxable supplies for consideration.
- Organizer of a convention
An organizer of a convention is a person who acquires the convention facility or related convention supplies and organizes the event for the sponsor. An in-house organizer or an organizer acting as an agent of a sponsor is not an organizer for GST/HST purposes.
When a sponsor organizes its own convention or when the convention is organized by an in-house organizer, the sponsor is still a sponsor for GST/HST purposes and not an organizer. As well, an organizer, when acting as an agent of a sponsor, is also not an organizer for this GST/HST rebate.
Origin of a continuous journey means the place where the passenger transportation service that is included in the continuous journey and that is first provided begins.
Origin of a continuous freight movement means the place where the first carrier engaged in the movement takes possession of the goods being transported.
- Owner-built home
An owner-built home is a home constructed or substantially renovated by the owner of the home, the owner’s contractor, or a combination of both.
- Participant in a joint venture
Participant in a joint venture means either:
- a person who, under a written joint venture agreement, makes an investment by contributing resources and takes a proportionate share of any revenue or incurs a proportionate share of the losses from the joint venture activities; or
- a person, without a financial interest, who is designated as the operator of the joint venture under a written agreement and is responsible for the managerial or operational control of the joint venture.
- Participating province
Participating province refers to the province of Nova Scotia, New Brunswick, or Newfoundland and Labrador that apply the harmonized sales tax (HST). Ontario and British Columbia are also a participating province, since July 1, 2010.
A partnership exists when each member shares in the management of the business and has personal liability for the business debts and obligations. Each partner is responsible for the actions of the other partner(s). The partnership itself is the business that receives a GST/HST number, not each partner.
Characteristics of a partnership:
- association between two or more persons;
- each partner is co-owner of the business;
- each partner contributes money, property and/or skills;
- each partner is entitled to a share of the profit/losses based on the partnership agreement; and
- each partner is considered self-employed and reports their share of income/loss on an Individual Tax and Benefit Return.
- Passenger vehicle
This is an automobile you bought or leased after June 17, 1987. Most cars, station wagons, vans and some pickup trucks are passenger vehicles. It includes any motor vehicles designed or adapted to carry not more than the driver and eight passengers. It does not include an ambulance, hearse, taxi, vehicles held as inventory and vans and pickup trucks with a seating capacity of not more than three people (including the driver) used primarily for the transportation of goods in the course of a business. A van, pick-up truck, or similar vehicle which in the tax year in which it is acquired is used all or substantially all for the transportation of goods, equipment, or passengers in the course of gaining or producing income would not be considered a passenger vehicle.
- Percentage of total floor space
The percentage of total floor space of a residential unit forming part of a residential complex, or part of an addition to a multiple unit residential complex, is the total square metres of floor space occupied by the unit divided by the total square metres of floor space occupied by all the residential units in the residential complex or addition.
- Permanent establishment
Permanent establishment of a person generally means:
- the person’s fixed place of business through which the person supplies property or services, including a place of management, a branch, an office, a factory, or a workshop; or a mine, an oil or gas well, a quarry, timberland, or any other place where natural resources are extracted; or
- a fixed place of business of someone else (other than a broker or an agent) who is acting in Canada for the person and through whom the person supplies property or services in the ordinary course of business.
- Permit imprint
- A permit imprint means an indicia the use of which as evidence of the payment of postage exclusively by a person is authorized under an agreement between the Canada Post Corporation and the person, but does not include a postage meter impression or any “business reply” indicia or item bearing that indicia.
- Person closely related (as defined in closely related Canadian partnerships and corporations) to the same person
A corporation and a Canadian partnership or two Canadian partnerships are considered closely related to each other for this election if they are each closely related to a third corporation or Canadian partnership, or would be considered to be closely related to the Canadian partnership if each member of that partnership were resident in Canada.
- Place of business
Place of business means any premises, facility, or installation used to carry on business, whether or not it is used exclusively for that purpose. Premises, facilities, or installations may be considered to be a place of business whether they are owned or rented, or, in some cases, where they are simply available to the business.
For GST/HST purposes, possession generally means you hold, control or occupy the property, that is, you pay property taxes, have the right to alter the land, take control of entry or access, or pay insurance coverage.
- Postage stamp
A postage stamp means a stamp authorized by the Canada Post Corporation for use as evidence of the payment of postage, but does not include a postage meter impression, a permit imprint or any “business reply” indicia or item bearing that indicia.
- Prescribed activity
A prescribed activity includes:
- the construction of real property; and
- activities relating to the sale or lease of real property.
Activities relating to the sale or lease of non-residential real property are not prescribed activities when a participant, or anyone associated with or related to a participant, uses all or a portion of the property less than 90% in commercial activity, and the user is not paying rent at fair market value and the tax on that rent.
- Prescribed government organization
- Prescribed government organization generally refers to a Crown corporation that is organized and operated for non-profit purposes and is not entitled to claim relief of the GST/HST on its purchases. For more information, call 1-800-959-8287 begin_of_the_skype_highlighting 1-800-959-8287 end_of_the_skype_highlighting.
- Prescribed publications
Prescribed publications include the following:
- books, newspapers, periodicals, magazines, and any similar printed publications, other than those described in Section 1 of Schedule VII to the Excise Tax Act; and
- audio recordings that relate to such publications and accompany those publications when submitted to Canada Post or a customs officer.
Primarily generally means more than 50%.
- Primary place of residence
Primary place of residence means a house, owned jointly or otherwise, that is intended to be inhabited by an individual on a permanent basis. The intention to use the residence as a primary place of residence must be evident at the outset of acquiring, constructing or substantially renovating the residence. While an individual may build or acquire a new house in Canada, if his or her primary place of residence remains outside Canada, then the house in Canada would be a secondary place of residence and not qualify for the GST/HST new housing rebate. A person may have more than one place of residence, but is considered to have only one primary place of residence. For purposes of the GST/HST new housing rebate, a person who has more than one place of residence should consider some of the following factors as to whether the residence may qualify as the primary place of residence:
- whether the individual considers the house as his or her main residence;
- the length of time the premises are inhabited; and
- the designation of that address on personal and public records.
This means that you cannot claim a GST/HST new housing rebate for an investment property or a recreational cottage that is not your primary place of residence.
- Procurative extent
Procurative extent of property or a service means the extent to which the property or service is acquired, imported, or brought into a participating province:
- for the purpose of making taxable supplies for consideration; or
- for purposes other than making taxable supplies for consideration.
- Proof of occupancy
Proof of occupancy is the documentation that proves you occupy a new house. This proof could be:
- the new house insurance policy with dates and coverage;
- vehicle insurance or registration that shows the new address; or
- an invoice for telephone, hydro, or natural gas hook-up and cancellation at the previous address.
Property means any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share and a chose in action, but does not include money.
- Public college
A public college means an organization that operates a post-secondary college or post-secondary technical institute:
- Public institution
A public institution means a registered charity for income tax purposes that is also a school authority, public college, university, hospital authority, or a local authority determined to be a municipality.
- Public sector body
- Public service body (PSB)
- Purchase price
The purchase price is the total amount paid for a new house less the GST/HST payable. If the new housing rebate was transferred to the builder and is included in the total amount paid, the amount of the rebate must be added to the total amount to determine the purchase price. It does not include land transfer taxes or any provincial sales tax that may be payable.
- Qualifying group
Qualifying group means:
- a group of corporations, each member of which is closely related to each other member of the group; or
- a group of Canadian partnerships, or of Canadian partnerships and corporations, each member of which is closely related to each other member of the group.
To determine if corporations or Canadian partnerships are closely related, for the purposes of this election, to other corporations or Canadian partnerships, see the meaning of closely related corporations and closely related Canadian partnerships.
- Qualifying institution
- The financial institution is of a prescribed class at any time in the particular fiscal year. The following are prescribed classes; banks, insurers, and securities dealers.
- In each of the two fiscal years immediately preceding the particular fiscal year, the financial institutions had a tax credit amount equal to or exceeding the prescribed amount for the prescribed class of the financial institution. The prescribed amount for each prescribed class of financial institution is $500,000.
- In each of the two fiscal years immediately preceding the particular fiscal year, the financial institutions had a tax credit rate equal to or exceeding the prescribed percentage for the prescribed class of the financial institution. The prescribed percentage is 12% for banks, 10% for insurers, and 15% for securities dealers.
- Qualifying member
- that is a member of the qualifying group;
- that is not a party to an election to treat certain taxable supplies as supplies of financial services; and
- all or substantially all of the property (other than financial instruments) was last manufactured, produced, acquired or imported by the corporation or partnership for consumption, use or supply exclusively in its commercial activities, or if the corporation or partnership does not have property (other than financial instruments), all or substantially all of its supplies are taxable.
- Qualifying motor vehicle
A qualifying motor vehicle means a motor vehicle that is equipped with a device designed exclusively to assist in placing a wheelchair in the vehicle without having to collapse the wheelchair, or with an auxiliary driving control to facilitate the operation of the vehicle by an individual with a disability.
Before November 27, 2006, a motor vehicle would only qualify if it was new or had not been used since being specially equipped. This restriction has been removed for motor vehicles purchased after April 3, 1998. Beginning on November 27, 2006, you have four years to claim this rebate on a motor vehicle that was purchased after April 3, 1998, and did not previously qualify for this rebate.
Qualifying motor vehicles do not include ambulances, but do include vehicles such as para-transit buses and vans that are specially equipped.
- Qualifying non-profit organization (NPO)
- Qualifying portion of basic tax content
The qualifying portion of basic tax content of a property generally means the basic tax content of the property from which you removed the provincial part of the HST from all of the elements of the basic tax content calculation. For more information, see Technical Information Bulletin B-087, GST/HST New Residential Rental Property Rebate.
- Qualifying residential unit
A qualifying residential unit means:
- a residential unit the person owns, co-owns, leases, or sublets from another person;
- a residential unit the person possesses under an agreement of purchase and sale; or
- a residential unit in a residential complex that the person leases or sublets from another person.
In addition, all of the following conditions have to be met:
- The unit is a self-contained residence.
- The person holds the unit to:
- make an exempt lease or sublease of the unit;
- make an exempt supply of property or service that includes giving possession or use of the unit under a lease, licence or similar arrangement entered into for the purpose of the unit’s occupancy by an individual as a place of residence;
- make an exempt sale of the unit and an exempt lease of the land; or
- occupy the unit as a primary place of residence as long as another unit situated in the same complex is a qualifying residential unit held for one of the purposes listed above.
- The first use of the unit is or can reasonably be expected to be:
- the primary place of residence of the person or a lessor (or a relation to the person or the lessor), for a period of at least one year (or for a shorter period if, after the shorter period, the unit is sold or leased to an individual who will occupy the unit as a primary place of residence); or
- the primary place of residence of an individual who will occupy the unit continuously for a period of at least one year (or for a shorter period if the unit is sold to another person for use as a primary place of residence of that person or a relation of that person, or taken by the person or lessor, or a relation of the person or the lessor, for use as their primary place of residence).
- If, after the first use, the person intends to occupy the unit or lease it as a place of residence or lodging to an individual who is a relation, shareholder, member, partner, or an individual with whom the person is not dealing at arms length, the unit will be the primary place of residence of the person or individual.
If substantially all (90% or more) of the residential units of a multiple unit residential complex that contains ten or more residential units meet the one year occupancy requirement, then all of the residential units in the complex are considered to meet the one year occupancy requirement.
- Qualifying subsidiary
Qualifying subsidiary of a particular corporation means another corporation not less than 90% of the value and number of the issued and outstanding shares of the capital stock of which, having full voting rights under all circumstances, are owned by the particular corporation, and includes:
- a corporation that is a qualifying subsidiary of a qualifying subsidiary of the particular corporation;
- where the particular corporation is a credit union, every other credit union; and
- where the particular corporation is a member of a mutual insurance group, every other member of that group.
- Real property
Real property includes:
(a) where consideration for the supply is payable under an agreement for the supply, the person who is liable under the agreement to pay that consideration;
(b) where paragraph (a) does not apply and consideration is payable for the supply, the person who is liable to pay that consideration; and
(c) where no consideration is payable for the supply:
(i) in the case of a supply of property by way of sale, the person to whom the property is delivered or made available;
(ii) in the case of a supply of property otherwise than by way of sale, the person to whom possession or use of the property is given or made available; and
(iii) in the case of a supply of a service, the person to whom the service is rendered.
And any reference to a person to whom a supply is made shall be read as a reference to the recipient of the supply.
- Registered Charity
A registered charity (within the meaning assigned by subsection 248(1) of the Income Tax Act)is an organization established and operated for charitable purposes, and must devote its resources to charitable activities. The charity must be resident in Canada, and cannot use its income to benefit its members.
A charity also has to meet a public benefit test. To qualify under this test, an organization must show that:
- its activities and purposes provide a tangible benefit to the public;
- those people who are eligible for benefits are either the public as a whole, or a significant section of it, in that they are not a restricted group or one where members share a private connection, such as social clubs or professional associations with specific membership; and
- the charity’s activities must be legal and must not be contrary to public policy.
To register as a charity, the organization has to be either incorporated or governed by a legal document called a trust or a constitution. This document has to explain the organization’s purposes and structure.
- Registered pension plan
A pension plan may generally be described as an arrangement between an employer and its employees, or between a union and its members, for providing pension benefits to the employees or the union members on retirement. Pension plans are regulated by federal and/or provincial legislation. For purposes of a GST/HST rebate, registered pension plan means a pension plan that has been registered by the Minister for the purposes of the Income Tax Act and whose registration has not been revoked.
A registrant means a person or an organization that is registered, or is required to be registered, for GST/HST. Registrants usually collect and remit GST/HST on their taxable supplies and have to file GST/HST returns regularly.
A reimbursement means a payment you receive from your partnership as a repayment for amounts you spent in connection with your partnership’s business. Generally, you complete an expense report detailing the amounts you spent. Usually, a reimbursement is not taxable for income tax purposes, unless it is for payment of your personal expenses.
- Related individual (relation)
A relation means an individual related to you by blood, marriage, common-law partnership, or adoption within the meaning of the Income Tax Act. A relation includes a common-law partner, a former spouse or a former common-law partner. “Blood relation” is limited to parents, children, or other descendants or siblings. “Marriage relation” includes your spouse or a person who is connected to your spouse by blood or adoption.
A “reserve” means a reserve within the meaning of the Indian Act, that is, a tract of land which has been set apart for the use and benefit of a band within the meaning of the Indian Act, and equivalent lands under self-government legislation, i.e. the Cree-Naskapi (of Quebec) Act and the Sechelt Indian Band Self-Government Act. “Reserve” also includes “designated land”, which, according to the Indian Act, is a tract of land whose legal title remains vested in Her Majesty and in which the band for whose use and benefit it was set apart as a reserve has, otherwise than absolutely, released or surrendered its rights or interests.
- Residential complex
A residential complex generally includes a building or part of a building in which one or more residential units are located, along with areas that are reasonably necessary for the use and enjoyment of the building as a primary place of residence for individuals. These include:
- part of any common areas and other appurtenances to the building;
- the land on which the building is situated; and
- the part of the land immediately adjoining the building
A residential complex includes a floating home, a mobile home, and a residential condominium unit, but generally does not include a building or that part of a building that is a hotel, a motel, an inn, a boarding house or similar place.
- Residential condominium unit
A residential condominium unit (either an apartment unit or a townhouse) means a residential complex that is a separate unit within a building that is, or is intended to be, a bounded space in a building designated or described as a separate unit on a registered condominium or strata lot plan (or similar plan or description registered under provincial law). A residential condominium unit includes any interest in the common areas as well as land pertaining to the ownership of the unit.
- Residential trailer park
A residential trailer park is a trailer park that includes at least two sites where the following two conditions are met:
- 90% or more of the sites are leased, or are intended to be leased, to individuals and continuous possession or use of a site is for at least:
- The sites must be suitable for use as a place of residence throughout the year by individuals occupying mobile homes (whether or not the park in fact has mobile homes). The sites must be serviced and accessible for use by a mobile home throughout the year.
This definition also includes any buildings, fixtures, and appurtenances to the park necessary for the use and enjoyment of the sites or for the operation of the park. If a trailer park of a person is next to one or more trailer parks of the same person, all of the trailer parks are taken into account to determine whether the land that includes all of the trailer parks is a residential trailer park.
- Residential unit
A residential unit means:
- a detached house, semi-detached house, rowhouse unit, condominium unit, mobile home, floating home, or apartment;
- a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house, or in a residence for students, seniors, individuals with a disability, or other individuals; or
- any other similar premises;
or that part thereof that
- is occupied by an individual as a place of residence or lodging;
- is leased as a place of residence or lodging for individuals;
- is vacant, but was last occupied or supplied as a place of residence or lodging for individuals; or
- has never been used or occupied for any purpose, but is intended to be used as a place of residence or lodging for individuals.
When a residential unit in a building allows direct internal access to another living area of the building, with or without the use of a key, both are considered to be one unit. This rule does not apply to a residential unit that is a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house or a residence for students, seniors, individuals with a disability, or other individuals.
- Residual input
- School authority
A school authority means an organization that operates an elementary or secondary school in which it provides instruction that meets the standards of educational instruction established by the government of the province or territory in which the school is operated.
- Securities dealer
- is not a bank or an insurer at any time in the fiscal year;
- carries on at any time in the fiscal year a business as a trader or dealer in, or as a broker or salesperson of, securities as the principal business of the person in Canada; and
- is registered under the laws of Canada or a province to carry on in Canada at any time in the fiscal year a business as a trader or dealer in, or as a broker or salesperson of, securities.
- Selected listed financial institution
A selected listed financial institution is generally an institution that is a listed financial institution, and it is required to allocate taxable income (or income, if it is an individual, an estate of a deceased individual, or a trust) for income tax purposes between at least one participating province and at least one non-participating province during its tax year and its immediately preceding tax year.
- Selected public service body
A selected public service body means:
- Self-government refund
Self-government refund refers to a refund available to a First Nation that has entered into an agreement with the Government of Canada that provides for a refund of GST for goods and services that are acquired for self-government activities. The terms and conditions that apply to the refund of GST are included in each agreement. For example, the Nisga’a Nation and certain Yukon First Nations have entered into such agreements.
- Self-contained residence
A self-contained residence means a residential unit:
- that is a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house or in a residence for students, seniors, individuals with a disability, or other individuals; or
- that contains private kitchen facilities, a private bath, and a private living area.
- Service (only applies for Foreign Convention and Tour Incentive Program)
A service means anything other than property, money, and anything that is provided to an employer by an employee in the course of employment. Some examples of services include:
- guide or interpreter services;
- transportation services;
- sightseeing excursions; and
- ski lessons.
The following elements, usually included in a tour package are property, not services:
- short-term accommodation;
- a right to enter or attend an event, such as tickets to a show or a hockey game;
- car rentals;
- ski rentals;
- ski lift tickets;
- golf green fees; and
- park passes.
A shipper of goods means the person who transfers possession of the goods being shipped to a carrier at the origin of a continuous freight movement or a continuous outbound freight movement. For GST/HST purposes, a person cannot be both a shipper and a carrier for the same shipment; the person is considered a shipper only. A shipper does not include a carrier.
- Short-term accommodation
A short-term accommodation means the rental of an accommodation unit in Canada as a place of lodging for an individual who will occupy it continuously for a period of less than one month and that costs more than $20 per night. For example, overnight or weeklong accommodation in any of the following would usually be considered short-term accommodation:
- hotels and motels;
- resorts and lodges; and
- bed-and-breakfast establishments.
Short-term accommodation includes any type of overnight shelter (such as a tent) that is part of a tour package that also includes food and the services of a guide.
Short-term accommodation does not include the following:
- shelter on a train, trailer, boat, or other structure that is, or could be, self-propelled (for example, cruise-ship cabins, train berths, houseboats, travel trailers, and all recreational vehicles); and
- an accommodation unit supplied under a timeshare arrangement.
- Single unit residential complex
For the new housing rebate, a single unit residential complex is a housing unit that does not contain more than two residential units, such as a detached single family home, a semi-detached home, an individually owned row house unit (a freehold townhouse), a mobile home, or a floating home. It may also include a duplex or a unit in a cooperative housing corporation. It does not include a residential condominium unit.
It also includes any other residential complex containing one or more residential units rented for short-term accommodation to the public. The complex must also be used primarily (more than 50%) as a place of residence of the owner (an individual), a relation of the owner, or a former spouse or common-law partner of the owner. Short-term accommodations supplied to the public include rooms in a hotel, motel, inn, boarding house, lodging house, or similar premises. For example, a home containing several rooms for rent, as part of a bed and breakfast business, may now be considered a single unit residential complex for purposes of this rebate if the home is used primarily as a place of residence of the individual, a relation, a former spouse or a former common-law partner of the individual.
A single unit residential complex generally includes other structures near or adjacent to the home, such as detached garages or sheds. It also includes the land subjacent and immediately contiguous to the unit that can reasonably be regarded as contributing to the use and enjoyment of the unit as a place of residence. We consider that half a hectare (1.23 acres) of land is generally reasonably necessary for the use and enjoyment of a unit. However, in some cases, more than half a hectare of land may be considered to form part of the complex (such as the minimum lot size imposed by a municipality or excess land necessary for you to access public roads).
- Single serving
Single serving of beverages means a serving in any amount that is less than 600 ml in volume.
Single serving of ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, non-dairy substitutes for any of these products, or any product that contains any of these products means a serving in any amount that is less than 500 ml in volume or 500 grams in weight.
Single serving of cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products means a serving weighing less than 230 grams or a portion or part of any of these goods when offered for sale as a single serving.
- Small supplier
A small supplier includes charities, and other public service bodies, that are engaged in commercial activity with revenues from worldwide taxable supplies (not including sales of capital property and financial services) equal to or less than $50,000 in the current calendar quarter and over the preceding four consecutive calendar quarters. The threshold for businesses that are not public service bodies is $30,000. Charities are also small suppliers if they meet the gross revenue test of $250,000 or less.
- Sole proprietorship (self employed)
A sole proprietorship is an unincorporated business owned and managed by one individual.
Sole proprietors are fully responsible for all debts and obligations related to their business. A creditor with a claim against a sole proprietor would normally have a right against all business and personal assets, meaning the creditor could seize some of his personal belongings. This is known as unlimited liability.
The characteristics of a sole proprietorship are:
- the business is not incorporated;
- the owner has sole responsibility for decision making;
- the owner receives all profits and takes responsibility for all losses that are incurred by the business; and
- the owner is considered self-employed and reports his business income on a T1 Individual Income Tax return.
- Specified facility operator
Specified facility operator means a non-profit organization operating other than for profit, a health care facility, or a part of a facility, that provides residents of the facility who have limited mental or physical capacity for self-supervision and self-care with:
- nursing and personal care under the direction or supervision of qualified medical and nursing care staff, or other personal and supervisory care (other than domestic services of an ordinary household nature), as required by each resident on an individual basis;
- assistance with the activities of daily living and social, recreational, and other related services to meet the psycho-social needs of the residents; and
- meals and accommodation.
- Specified member
A specified member of a qualifying group means:
- a qualifying member of the group; or
- a temporary member of the group. A temporary member of the group only qualifies as a specified member when he is to receive a supply of property in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)(b)(i) of the Income Tax Act from the distributing corporation that is a qualifying member of the same group.
Once the reorganization is complete, the temporary member must qualify as a qualifying member to be a specified member and eligible to make this election.
- Specified partnership
A specified partnership is a selected listed financial institution during a reporting period in a fiscal year that ends in your tax year if the partnership is a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) of the Act during the tax year and during the preceding tax year. It also has to qualify as a specified partnership during those two years.
A partnership is a specified partnership during a tax year if it has:
- at least one member who has taxable income (or income, in the case of a member that is an individual, an estate of a deceased individual, or a trust) in that year that was earned in a participating province from a business carried on through the partnership; and
- at least one member (whether or not it is the same member) who has taxable income (or income, in the case of a member that is an individual, an estate of a deceased individual, or a trust) in that year that was earned in a non-participating province from such a business.
Where members do not have taxable income or income in the year from the partnership business, the determination is made as if the members had taxable income or income from the partnership.
- Specified supply
Specified supply means a supply of goods that:
- are imported at any time after the supply is made; or
- have been imported and are considered to have been supplied outside Canada because they are delivered or made available to the recipient before their release under the Customs Act.
- Specified total revenue
Specified total revenue means revenue from sales you have made in a year, except sales of :
- services you provide on goods you did not import or obtain physical possession of in Canada ;
- goods that you did not acquire in Canada or import into Canada;
- added property that you used to process goods that you did not import into Canada or take physical possession of in Canada; and
- your own capital property.
A sponsor of a convention is the person who convenes the convention and supplies admissions to it. A sponsor might sometimes be referred to as the host of the convention. A person that supports an event through sponsorship opportunities is not a sponsor for GST/HST purposes, but may be an exhibitor.
If an employee of a business who is an in-house planner organizes a convention, the business would be the sponsor of the convention. If the convention is a foreign convention, the business has to follow the rebate rules that apply to sponsors of foreign conventions.
A stopover, for a continuous journey of an individual or a group of individuals, means any place at which the individual or group embarks or disembarks a conveyance used in the provision of a passenger transportation service included in the continuous journey, for any reason other than transferring to another conveyance or to allow for servicing or refuelling of the conveyance. However, a stopover does not include, in the case of a continuous journey of an individual or group of individuals that does not include transportation by air and the origin and termination of which are in Canada, any place outside Canada where, at the time the journey begins, the individual or group is not scheduled to be outside Canada for an uninterrupted period of at least 24 hours during the course of the journey.
A stop between two legs of a journey that is 24 hours or less in not considered a stopover and will not affect whether the legs are part of a continuous journey.
- Substantial alteration of property
Substantial alteration of property means:
- you manufacture or produce goods (or have another person manufacture or produce goods for you); or
- you process goods (or have another person process goods for you) and by doing so, you bring the goods to the state of finished inventory if:
- the value that is added to the goods if more than 10% from non-basic services, and
- the total value added from all processing services is more than 20%.
You can use any reasonable method for valuing the goods in finished inventory. However, once you choose a method, you have to use that method each year.
- Substantial completion
Substantial completion generally means that construction or substantial renovation of a complex is at a stage where you can reasonably inhabit the premises. Minor repairs, adjustments, or outstanding upgrades are not considered to impair the use and enjoyment of the housing unit as a place of residence.
- Substantial renovation
Major changes have to be made to meet the definition of a substantial renovation. In a major renovation project, the interior of a building is essentially gutted. This type of renovation project qualifies as a substantial renovation. Generally, 90% or more of the interior of an existing house is the minimum that has to be removed or replaced to qualify as a substantial renovation (90% test).
A supply means the provision of property or a service in any way, including sale, transfer, barter, exchange, licence, rental, lease, gift, and disposition.
- Tax credit amount
Tax credit amount, for a fiscal year, generally means:
- where the person has made an election to use a prescribed rate in respect of the fiscal year, the total of all amounts each of which is an input tax credit (ITC) for the fiscal year that the person would, in the absence of having made the election, be entitled to claim in respect of a residual input for which tax in respect of the supply, importation, or bringing into a participating province of the residual input became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable;
- where the person is a qualifying institution for the fiscal year and has not made a transitional year election and has not received authorization to use particular methods in respect of the fiscal year, the total of all amounts each of which is an ITC for the fiscal year that the person would, if the person were not a qualifying institution for the fiscal year and did not make an election to use a prescribed rate in respect of the fiscal year, be entitled to claim in respect of a residual input for which tax in respect of its supply, importation, or bringing into a participating province became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable; and
- in any other case, the total of all amounts each of which is an ITC for the fiscal year that the person is entitled to claim in respect of a residual input for which tax in respect of its supply, importation, or bringing into a participating province became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable.
- Tax credit rate
Tax credit rate, for a fiscal year, generally means the percentage that is determined by dividing the tax credit amount for the fiscal year by the total of all amounts each of which is an amount of tax in respect of a supply, importation, or bringing into a participating province of a residual input that became payable during the fiscal year without having been paid before the fiscal year or was paid during the fiscal year without having become payable.
- Taxable supplies
- Telecommunications channel
A telecommunications channel means a telecommunications circuit, line, frequency, channel, partial channel or other means of sending or receiving a telecommunication but does not include a satellite channel.
- Telecommunications facility
A telecommunications facility means any facility, apparatus or other thing (including any wire, cable, radio, optical or other electromagnetic system, or any similar technical system, or any part thereof) that is used or is capable of being used for telecommunications.
- Telecommunication service
A telecommunication service means:
- the service of emitting, transmitting or receiving signs, signals, writing, images or sounds or intelligence of any nature by wire, cable, radio, optical or other electromagnetic system, or by any similar technical system, or
- making available for such emission, transmission or reception telecommunications facilities of a person who carries on the business of supplying services referred to above.
- Temporary member
- that is a member of the group but not a qualifying member;
- that is not a party to an election to treat certain taxable supplies as supplies of financial services;
- that receives a supply of property in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)(b)(i) of the Income Tax Act from the distributing corporation that is a qualifying member of the same group;
- that does not carry on any business or have any property (other than financial instruments ) before receiving the supply; and
- that transfers its shares on the distribution.
Termination of a continuous journey means the place where the passenger transportation service that is included in the continuous journey and that is last provided ends.
- Tour operator
Generally, a tour operator is a person who, in the ordinary course of business, packages tours that are ultimately sold to, or are for the use of, either a group of travellers or an individual traveller. An outfitter or an owner of a lodge, hotel, or motel may be a tour operator if the person packages tours for sale in the ordinary course of a business.
Travel agencies, when they sell tour packages for a tour operator, are not tour operators for this rebate. A person who sells packages that include a convention facility or related convention supplies is also not a tour operator for this rebate.
- Tour package
A tour package is a combination of two or more services or of property and services that includes transportation services, accommodation, a right to use a campsite at a recreational trailer park or campground, or guide or interpreter services when the property and services are supplied together for an all-inclusive price.
Generally, a tour package is what is produced when a tour operator combines various elements to create something new. However, not all combinations of two or more services or of property and services are tour packages. The nature and purpose of the package also has to be considered. For example, if the overall purpose of a package is to provide a specialized service, it is not considered to be a tour package for GST/HST purposes. Examples of such packages are wellness packages, educational and counselling packages, children’s overnight camps, sports tournaments, and concert tours.
As well, an incentive trip that includes business meetings is not a tour package for GST/HST purposes.
- Travel service providers
Travel service providers include travel agents, hotels, air carriers, tour operators, and cruise operators. If you buy travel services or tour packages in the course of your business to resell, we consider you to be a travel service provider.
- Tribal council
A tribal council is another level of Indian government. It is a grouping of bands with a common interest who have joined together to provide advisory or program services for two or more bands. Band council members compose the tribal council Board of Directors.
A university means a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution.
- Zero-rated supplies
- Zero-rated supplies refer to a limited number of goods and services that are taxable at the rate of 0%. This means there is no GST/HST charged on the supply of these goods and services, but GST/HST registrants can claim an input tax credit for the GST/HST they pay or payable on purchases and expenses made to provide them.