Platform-based short-term accommodation

On this page

• Who charges and collects the GST/HST
• What types of supplies are taxed
• What rate to charge

Once you have registered for the GST/HST as required, you are required to charge and collect the tax on the taxable supplies that you make in Canada. The rate of tax that you are required to charge and collect on those supplies is based on the place of supply that determines whether a supply is made in Canada, and the province in which a supply is made.

Who charges and collects the GST/HST

The person who is required to charge and collect the GST/HST can depend on whether the supplies are made by suppliers who are registered for the GST/HST, whether they are facilitated through an accommodation platform operator, and whether the platform operator is registered under the simplified GST/HST regime or the normal GST/HST regime.

GST/HST registered suppliers of short-term accommodation

If you are a supplier of taxable short-term accommodation that is situated in Canada and you are registered for the GST/HST, you continue to be required to charge and collect tax on those supplies, including those supplies that are facilitated by an accommodation platform operator.

Accommodation platform operators

If you are an accommodation platform operator who facilitates taxable supplies of short-term accommodation in Canada that are made by suppliers who are not registered for the GST/HST, you are required to charge and collect the GST/HST on those supplies.

If you become registered under the simplified GST/HST regime, you are required to charge and collect GST/HST on those taxable supplies of short-term accommodation and Canadian accommodation related supplies only if they are made to recipients who are not registered for the GST/HST under the normal GST/HST regime.

If you become registered under the normal GST/HST regime, you are required to charge and collect GST/HST on the taxable supplies of short-term accommodation and Canadian accommodation related supplies that are made to any recipients.

Under this measure, you are not required to charge and collect the GST/HST on your accommodation platform services to suppliers who are not registered for the GST/HST in respect of their taxable supplies of short-term accommodation in Canada that you facilitate through your platform.

An accommodation platform operator in respect of a supply of short-term accommodation made through an accommodation platform, generally means a person (other than the supplier or an excluded operator in respect of the supply) that

• controls or sets the essential elements of the transaction between the supplier and the recipient; and
• if the above does not apply to any person, then it is a person who is involved, directly or through arrangements with third parties, in collecting, receiving or charging the consideration for the supply and transmitting all or part of the consideration to the supplier.

In relation to a supply of property, an excluded operator is a person who:

• does not set, directly or indirectly, any of the terms and conditions under which the supply is made,
• is not involved, directly or indirectly, in authorizing the charge to the recipient of the supply in respect of the payment of the consideration for the supply, and
• is not involved, directly or indirectly, in the ordering or delivery of the property ;
  or
• solely provides for the listing or advertising of the property or service or for the redirecting or transferring to a digital platform on which the property is offered;
  or
• is solely a payment processor.

Accommodation platform operator registered under the simplified GST/HST regime

Figure 1

In scenario (1), the registered non-resident vendor is required to collect the GST/HST on the taxable supplies of short-term accommodation that is situated in Canada that it makes directly to recipients.

In scenario (2), the registered non-resident vendor and the registered Canadian vendor are required to collect the GST/HST on the taxable supplies of short-term accommodation that is situated in Canada that they each make and that are facilitated by the accommodation platform operator through the accommodation platform.

In scenario (3), the accommodation platform operator is required to collect the GST/HST on the supplies of Canadian accommodation related supplies that it makes to recipients who are not registered for the GST/HST under the normal GST/HST regime.

In scenario (4), the accommodation platform operator is required to collect the GST/HST on the taxable supplies of short-term accommodation that is situated in Canada that it facilitates through its platform and that are made by non-registered non-resident vendors and non-registered Canadian vendors.

Accommodation platform operator registered under the normal GST/HST regime

Figure 2

In scenario (1), the registered non-resident vendor and the registered Canadian vendor are each required to collect the GST/HST on the taxable supplies of short-term accommodation that is situated in Canada that that are facilitated by the accommodation platform operator through the accommodation platform.

In scenario (2), the accommodation platform operator is required to collect the GST/HST on the supplies of Canadian accommodation related supplies that it makes to recipients.

In scenario (3), the accommodation platform operator is required to collect the GST/HST on the taxable supplies of short-term accommodation that is situated in Canada that it facilitates through its platform and that are made by non-registered non-resident vendors and non-registered Canadian vendors.

Safe Harbour Rules

In many cases, an accommodation platform operator may rely on information provided by third-party suppliers on the transactions they make for determining whether the platform operator is required to collect and remit tax on the short-term accommodation supplies it facilitates.

A joint and several, or solidary, liability is imposed on a distribution platform operator and a third-party supplier for the collection and remittance of tax in respect of a short-term accommodation supply if the third-party supplier makes a false statement to the platform operator. The liability of the distribution platform operator for failure to collect and remit tax in respect of a short-term accommodation supply in this case is limited if the platform operator did not know and could not reasonably be expected to have known that the third-party supplier made a false statement and relied in good faith on the false statement.

An accommodation platform operator is therefore not held liable for failing to collect and remit tax in respect of a short-term accommodation supply as a result of having relied in good faith on a false statement by a third-party supplier. In this case, the platform operator is relieved from liability to the extent that it did not collect and remit tax (i.e., where it partially collected tax, it remains liable for those amounts) and the third-party supplier that made the false statement is liable for any amounts not collected. A false statement includes a statement that is misleading because of an omission from the statement.

Disclosing the tax to customers

Under the simplified GST/HST, you must indicate to your customers, such as on your receipts, invoices or contracts:

• the amount paid or payable for your digital supplies and the GST/HST paid or payable on that amount; or
• that the GST/HST paid or payable on those supplies is included in the price.

For information about charging and collecting the GST/HST under the normal GST/HST regime, go to Receipts and Invoices.

What types of supplies are taxed

You have to charge and collect to taxable supplies of short-term accommodation that are situated in Canada and to Canadian accommodation related supplies.

Taxable short-term accommodation that is situated in Canada 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.

Generally, a Canadian accommodation related supply is a taxable supply of a service that is made to a person in connection with a supply of short-term accommodation situated in Canada that is made to the person, and for which there is a booking fee, administration fee or other similar charge.

For example, this includes where an accommodation platform operator charges the guest who is renting the short-term accommodation a service fee or commission for the services it provides in helping the guest to find and book an accommodation and in facilitating the transactions between the guest and the supplier of the accommodation.

What rate to charge

The rate of tax that you are required to charge and collect on taxable supplies of short-term accommodation and Canadian accommodation related supplies depends on whether they are made in Canada, and whether they are made in a participating province.

Taxable supplies that are made in Canada are subject to GST at a rate of 5%, or HST at the harmonized rate if they are made in a participating province.

The current rates of tax are:

• 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon
• 13% (HST) in Ontario
• 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island

Place of supply rules

Generally, the normal GST/HST place of supply rules apply to taxable supplies of short-term accommodation and Canadian accommodation related supplies.

Examples

• Example 1 – Supplies of short-term accommodation through a platform – Unregistered vendor

  A non-resident vendor who owns a cottage in Ontario, Canada and is not registered for GST/HST purposes, makes supplies of taxable short-term accommodation by renting out the cottage to consumers on a weekly basis during the summer months. The supplies of short-term accommodation are all facilitated through an accommodation platform by an accommodation platform operator who is registered under the simplified GST/HST registration regime.

  The non-resident vendor rents out the cottage through the accommodation platform for two weeks in August to a family from British Columbia. The supply of the short-term accommodation is made in Ontario because the property is situated in Ontario. The accommodation platform operator is required to charge and collect HST at 13% on the supply of the accommodation to the family member as the non-resident vendor is not registered for GST/HST purposes. The accommodation platform operator is required to charge and collect HST at 13% on any booking or administration fee it charged to the family member from British Columbia in connection with the supply of the short-term accommodation because the property is situated in Ontario. The accommodation platform operator is not required to charge and collect GST/HST on the supply of accommodation platform services it makes to the non-resident vendor because the vendor is not registered for GST/HST purposes.

• Example 2 – Supplies of short-term accommodation through a platform – Registered vendor

  A Canadian vendor who owns three condominium units in downtown Vancouver, British Columbia, Canada, and is registered for GST/HST purposes, makes supplies of taxable short-term accommodation to consumers by renting out the condominiums on a daily and weekly basis. The supplies of short-term accommodation are all facilitated through an accommodation platform by an accommodation platform operator who is registered under the simplified GST/HST registration regime.

  The vendor rents out one of the condominium units through the accommodation platform for a week in July to a family from Ontario. The supply of the short-term accommodation is made in British Columbia because the property is situated in British Columbia. The Canadian vendor is required to charge and collect GST at 5% on the supply of the accommodation to the family member as the vendor is registered for GST/HST purposes. The accommodation platform operator is required to charge and collect GST at 5% on any booking or administration fee it charged to the family member from Ontario in connection with the supply of the short-term accommodation because the property is situated in British Columbia. The accommodation platform operator is not required to charge and collect GST/HST on the supply of accommodation platform services it makes to the Canadian vendor.

• Example 3 – Supplies of short-term accommodation through a GST/HST registered platform – Registered vendor

  A Canadian vendor who owns two homes in Halifax, Nova Scotia, Canada, and is registered for GST/HST purposes, makes supplies of taxable short-term accommodation to consumers by renting out the homes on a daily and weekly basis. The supplies of short-term accommodation are all facilitated through an accommodation platform by an accommodation platform operator who is registered under the normal GST/HST registration regime.

  The vendor rents out one of the homes through the accommodation platform for two weeks in December to a family from Ontario. The supply of the short-term accommodation is made in Nova Scotia because the property is situated in Nova Scotia. The Canadian vendor is required to charge and collect HST at 15% on the supply of the accommodation to the family member as the vendor is registered for GST/HST purposes. The accommodation platform operator is required to charge and collect HST at 15% on any booking or administration fee it charged to the family member from Ontario in connection with the supply of the short-term accommodation because the property is situated in Nova Scotia. The accommodation platform operator, being registered under the normal GST/HST regime, is required to charge and collect GST/HST on the supply of accommodation platform services it makes to the Canadian vendor.