Place Of Supply Rules Will Determine Application Of GST Or HST
Open Jaw

Canada’s Association of Retail Travel Agents (ARTA Canada and travel industry stakeholders, including airlines, GDSs, and airline associations met Wednesday to discuss a wide array of HST-related issues, including new "place of supply" rules released by the Government at the end of last month. The new proposed rules will now be used to determine whether HST or GST applies to a particular transaction and are a dramatic departure from today’s regulations which focus on the physical location of the supplier or travel agency as opposed to the location of the consumer receiving the services.

In most all cases, other than those involving passenger transportation with a specified origin, the new rules mandate that the provincial or territorial location of the travel service provider or travel agency will no longer be relevant or a factor in determining whether GST or HST applies.

"This is game-changing and will affect the entire travel industry in Canada particularly regarding service fees, commissions, mark-ups, and similar travel sales services. This is no longer just a question of the new HST regime in B.C. and Ontario, but a complete change to the way we assess and collect taxes across the full spectrum of travel transactions in Canada", said ARTA Canada President Bruce Bishins, CTC.

Bishins, in his capacity as Executive Director of the Airline Training Council, presented a detailed overview and preliminary interpretation during the industry conference to help facilitate an understanding of the passenger transportation issues and the new place of supply rules. He went on to advise attendees that there are a number of key issues and travel transaction scenarios which still need to be resolved and that he will be discussing these with Canada Revenue Agency officials during the next few days.

"We are much closer to getting all concerned on the same page than we were a month ago, and that is an important step forward. Our biggest challenge will be to take years of current practice and make the necessary adjustments to conform to the new rules. Our industry is complex with unique transactions not common to typical retail sales in other areas of commerce. We need to assure that those complying with the new tax rules and those charged with imposing them are clear as to how all this fits within the travel industry", added Bishins.

ARTA Canada wishes to remind travel agents that it and its education partner, the Airline Training Council (ATC), will provide travel agents with a series of webinars to assist in the implementation of the Harmonized Sales Tax (HST) as well as the new "place of supply" regulations.

Two training options will be made available and are timed to assist travel agencies in calculating and collecting HST for applicable passenger transportation sold on/after 01 May 2010 for travel on/after 01 July 2010.  See for complete details and online registration.

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