umerous businesses have contacted the NOTO office asking if the new Visitor GST Rebate allows them to continue applying the rebate on their invoices and the answer is a very guarded “yes”. We offer guarded because the rules have changed several times and could change again, you’ll have to absorb the loss if the rebate is denied for whatever reason, and applying for the rebate is not a simple process. However for those of you who are determined to provide the rebate directly to your guests, we have attempted to outline the process.
We suggest that you take a look at the forms that are referred to below so that you can decide whether you wish to go ahead with applying the rebate directly.
First Step: Are your packages eligible?
Refer to the article in this issue entitled “Does Your Package Qualify for the GST Rebate?” If your answer is yes then proceed to the next step.
Second Step: Can you apply the rebate directly?
Note: The following information is all included in the guide that can be found at http://www.cra-arc.gc.ca/E/pub/gi/gi-032/README.html
You can provide the rebate directly if ONE of the following conditions is met:
payment must be made for the package outside of Canada where you conduct business
a deposit of at least 20% of the total price for the package is paid by the non-resident. The deposit must be paid at least 14 days before the first day that any short-term accommodation included in the package is made available to the guest. The deposit must be made by credit, debit, or charge card, cheque, bank draft, or other bill of exchange, drawn on an account from a financial institution outside Canada.
Third Step: Documentary evidence
Once you have determined that you can apply the rebate you must keep documentary evidence that the guest you have given the rebate to is a non-resident. You have to do this for each person that is included in the package. There is a form that they have developed that can be used for each person and kept on file (Appendix A in the link provided above). Included on this form must be their home street address (a postal box will not do).
You also must keep evidence that the person(s) that you are providing the rebate to would be entitled to the rebate if they had applied for it directly to the CRA themselves. They have a suggested form (Appendix B in the link provided above) that can be used for this as well. The form contains some confusing language that we have interpreted for your assistance. It reads “We purchased the eligible tour package otherwise than for resale (this means that the guest purchased the package for themselves) in the ordinary course of a business.”
Fourth Step: Applying the Rebate
Once you have satisfied Steps 1 through 3 you can go ahead and apply the rebate. The GST rebate is 50% of the GST on your total package. You must show on the invoice the total GST on the package as well as the total GST that you are rebating.
Another note of caution: Hunting and fishing licences, tags and seals CANNOT be included as part of the package.
Therefore if you have included any of these items in the package that you have sold to your guest you must show that you have deducted it from the package before you calculate the GST and the rebate on the eligible package.
Keep a copy of the forms listed above as well as the invoice for your records.
Fifth Step: Filing your GST Return
When you file your GST return you will record the full amount of GST charged on the total package on line 103 and the rebate that you have provided on line 107. At the time that you submit your GST return you will also be required to complete and submit the form at the link below to list the number of rebates and amounts that you have included in your report. http://www.cra-arc.gc.ca/E/pbg/gf/gst106/gst106-10e.pdf
This is much more complicated than the former program was but at least they have brought back the ability to apply the rebate. We would be interested in hearing your comments.
Editorial Note: For more information on which types of packages qualify for the GST Rebate program, please click here
This article was taken from pages 16 & 17 of NOTO's "The Outfitter" publication, Spring 2008 Issue