GST/HST rebate for tour packages

 

Notice to the reader

Under proposed changes, a GST/HST rebate is no longer available to non-residents for the Canadian accommodation portion of eligible tour packages under the Foreign Convention and Tour Incentive Program if the accommodations are supplied after March 22, 2017. However, the rebate may still be available if the accommodations are supplied in 2017 and the amount owing for those accommodations is paid in full before January 1, 2018.


Find out if you are eligible the rebate

You may be eligible for a rebate of the GST/HST paid on an eligible tour package if one of the situations described below apply:

Eligibility and conditions
If you are Rebate eligibility To qualify you must meet all of the following conditions
A non-resident tour operator and you are not registered for the GST/HST

You may be eligible if one of the following situations apply:

  • You purchased an eligible tour package and resold it
  • You purchased short-term and/or camping accommodation in Canada and resold it as part of an eligible tour package
  • You made the purchase in the ordinary course of your business of selling tour packages.
  • You sold the eligible tour package to another non-resident person.
  • The accommodation included in the eligible tour package was made available to a non-resident individual.
  • You received payment for the eligible tour package at a place outside of Canada where you or your agent conducts business, which we will consider to be where payment is processed and deposited.
  • You are a non-resident of Canada at the time the rebate application is filed.
  • You paid at least $200 before taxes (this amount does not include property and services included in the tour package that are not subject to tax, such as overseas transportation services).
  • You send us your rebate application within one year after the last day any tax to which the rebate relates became payable. Generally, the day the tax became payable is the day you paid the amount due or the date of the invoice, whichever comes first.
  • You provide the necessary documents to prove you are eligible for the rebate.

A non-resident individual visiting Canada and you are not registered for the GST/HST

OR

A non-resident business or organization that is not registered for the GST/HST and you purchased the eligible tour package for use by an employee or client

You may be eligible if you purchased an eligible tour package and the supplier did not pay or credit you with the rebate amount

  • The short-term and/or camping accommodation included in the eligible tour package was made available to a non-resident individual.
  • You did not purchase the eligible tour package to resell in the ordinary course of a business of selling tour packages.
  • You are a non-resident of Canada at the time the rebate application is filed.
  • You paid at least $200 before taxes (this amount does not include property and services included in the tour package that are not subject to tax, such as overseas transportation services).
  • You send us your rebate application within one year after the last day any tax to which the rebate relates became payable. Generally, the day the tax became payable is the day you paid the amount due for the eligible tour package or the date of the invoice, whichever comes first.
  • You provide the necessary documents to prove you are eligible for the rebate.

 

Note

Travel agencies, persons who sell packages for tour operators, and persons who sell packages that include a convention facility or related convention supplies are not eligible for a FCTIP rebate.

Determine what is an eligible tour package for the rebate

To be an eligible tour package for the FCTIP rebate, the tour package must be sold for an all-inclusive price, and it must include the following elements:

  • short term and/or camping accommodation in Canada
  • at least one service

See example - Eligible tour packages

How to calculate and claim the rebate

Use the following tabs to determine how to calculate your rebate based on your situation.

Accommodation resold in a tour package (tour operators)

Rebate for accommodation resold in a tour package (tour operators)

If you are eligible to claim a rebate for the tax paid on short-term and/or camping accommodation you purchased and resold in an eligible tour package, you can claim a rebate equal to 100% of the GST/HST paid on the accommodation.

See example

Tour package you purchased and resold (tour operators)

Rebate for tour package you purchased and resold (tour operators)

If you are eligible to claim a rebate for the tax paid on an eligible tour package you purchased and resold, you can claim a rebate for part of the tax you paid on the tour package. 

The rebate for an eligible tour package is generally equal to 50% of the GST/HST paid on the package. However, the rebate is reduced if any of the nights of accommodation provided in Canada as part of the tour package are ineligible accommodation. The reduced rebate amount is calculated as follows:

General calculation method
Formula Where Example
(A ÷ B) × 50% of the GST/HST paid

A is the number of nights of short-term and/or camping accommodation in Canada included in the tour package

B is the total number of nights in Canada included in the tour package, including ineligible accommodation such as overnight shelter on a boat, trailer, or a train.

An eligible tour package includes 5 nights in Canada, with 2 nights of accommodation in a Canadian hotel and the rest on a train. The GST on the tour package was $45.

Only the 2 nights of accommodation at the hotel are eligible as the nights spent on the train do not qualify as short-term accommodation. With only 2 of 5 nights eligible as short-term accommodation, the 50% GST rebate is reduced as follows:

(2 ÷ 5) × (50% × $45) = $9

The rebate amount is calculated as $9.

Non-resident individuals, organizations, or businesses (other than tour operators)

Rebate for non-resident individuals, organizations, or businesses (other than tour operators)

If the supplier did not pay or credit you with the rebate amount and you are eligible to claim a rebate for 50% of the tax paid on the purchase of an eligible tour package, you can choose one of the following methods to calculate your rebate claim:

Depending on your situation, the result of one of these calculations may be higher than the other. You may want to do both calculations to find out what your rebate would be using each method. For more information, see Compare the general vs the quick calculation method.

General calculation method

General calculation method
Formula Where Example
(A ÷ B) × 50% of the GST/HST paid

A is the number of nights of short-term and/or camping accommodation in Canada included in the tour package

B is the total number of nights in Canada included in the tour package, including ineligible accommodation such as overnight shelter on a boat, trailer, or a train.

An eligible tour package includes 5 nights in Canada, with 2 nights of accommodation in a Canadian hotel and the rest on a train. The GST on the tour package was $45.

Only the 2 nights of accommodation at the hotel are eligible as the nights spent on the train do not qualify as short-term accommodation. With only 2 of 5 nights eligible as short-term accommodation, the 50% GST rebate is reduced as follows:

(2 ÷ 5) × (50% × $45) = $9

The rebate amount is calculated as $9.

Quick calculation method

The rebate amount available using the quick calculation method is the total of:

  • $5 per night of short-term accommodation in Canada included in the eligible tour package
  • $1 per night of camping accommodation in Canada included in the eligible tour package

For each rebate claim:

  • a non-resident individual can receive a maximum rebate of CAN$75 for all eligible tour packages
  • a non-resident business or organization can receive a maximum rebate of CAN$75 for each individual to whom the short-term and/or camping accommodation in all eligible tour packages was made available

If you are an individual consumer (in other words, you made the purchase for your own personal use and enjoyment or that of another individual) that purchased more than one eligible tour package from the same person and those eligible tour packages include short-term and/or camping accommodation in Canada on the same nights, you can only claim a rebate for one of those tour packages if you use the quick calculation method.

Quick calculation method
Situation Calculation 

A non-resident consumer purchases an eligible tour package from a Canadian tour operator and pays the 5% GST. The package includes 2 nights’ accommodation in a hotel and 3 nights’ accommodation at a campground.

$5 × 2 nights of short-term accommodation

$1 × 3 nights of camping accommodation

The rebate amount is calculated as $13.

Note

Accommodation in a campsite included as part of an eligible package with food and guide services (for example, an outdoor adventure tour package), qualifies as short-term accommodation instead of "camping accommodation" and is eligible for a rebate of CAN$5 per night.

Compare the general vs the quick calculation method

Depending on your situation, the result of one of these calculations may be higher than the other. You may want to do both calculations to find out what your rebate would be using each method. You can claim the higher amount. However, you must use the same calculation method for all eligible tour packages included in a single rebate claim. The rebate amount is calculated as follows:

General vs quick calculation method
Situation Calculation 

A non-resident consumer travelling in Nova Scotia with his family buys four eligible tour packages for $2,000 each for a total of $8,000. He pays $260 HST on each package for a total of $1,040 HST. The four tour packages are identical and include seven nights of short-term accommodation in a hotel in Canada.

Using the quick calculation method
$5 × 7 nights for short-term accommodation

The rebate amount is calculated as $35. Note that under the quick calculation method, you can only claim a rebate for one tour package.

 

Using the general calculation method

Equal to 50% of the HST paid on all four tour packages

$1,040 × 50% = $520

The rebate amount is calculated as $520.

When to file and where to send the rebate application

You have to file your application within one year after the last day any tax to which the rebate relates became payable. Generally, the day the tax became payable is the day you paid the amount due or the date of the invoice, whichever comes first. Make sure to attach the supporting documents.

Send your completed form with supporting documents attached to:

Summerside Tax Centre
275 Pope Road
Summerside PE   C1N 6A2
CANADA

What information to include with the rebate application and what records to keep

You have to send us copies (do not send us original receipts) of all of the following supporting documents with your rebate claim:

  • invoices or receipts showing the GST/HST you paid on the eligible tour package(s)
  • itineraries or detailed descriptions for the eligible tour packages, including the number of nights of accommodation in Canada

You can provide the itineraries on paper or CD. For other options, see How to contact us. We may accept other supporting documents if they confirm that you qualify for the rebate.

The supporting documents must be in either English or French, or you must provide a translation. If you do not provide all of the supporting documents with your rebate application, your rebate will be denied. We will not return any receipts or supporting documentation submitted with your application.

If you are a tour operator, you must also keep all of the following documents in your records and make them available if we ask to see them:

  • a list of names and addresses of the non-residents who purchased the tour packages
  • a list of names and addresses of the non-residents individuals who stayed in the accommodation
  • the name(s) of the agent(s) through whom you sold the tour packages (if applicable)
  • copies of the original invoices issued to your clients

Determine what type of information is required on the supporting documents

The supporting documents must indicate that the non-resident paid the GST/HST on the supply of the short-term or camping accommodation, or the eligible tour package, as the case may be. For example, an invoice that shows only the tax payable (not paid) is not sufficient.

The supporting documents must demonstrate that the packages are tour packages supplied to non-residents or by a tour operator, as the case may be, for an all-inclusive price, and that the packages included short-term and/or camping accommodation in Canada and at least one service (in other words, they are eligible tour packages). In addition, the documents must specify the number of nights of short-term and/or camping accommodation in Canada included in the packages.

The information showing that a tour operator has met the eligibility requirements does not have to be on separate documents. One or two documents may contain all the required information. In addition, electronic documents capable of being reproduced on paper are acceptable.

The CRA will also accept documentation prepared by non-resident non-registered tour operators (in other words, reverse invoicing), provided the documentation includes the information that would be found on the original invoices or receipts prepared by the registrant supplier. This information must include:

  • the supplier’s name, address, telephone number, and business number
  • the recipient’s name, address, and telephone number
  • details concerning the supply such as a description of the accommodation, the number of nights, and consideration
  • the GST/HST charged
  • proof that the amount was paid (for example, copy of cancelled cheque or wire payment confirmation number)

What to do if someone else is completing and filing the rebate application for you

If you enter into an agreement with someone else to complete and file your rebate application for you, see What to do if someone else is completing and filing your rebate application for you.

What to do if you choose to credit or pay the GST/HST rebate for a tour package

If you are registered for the GST/HST and you supply eligible tour packages, you can choose to credit or pay the rebate amount under the FCTIP to:

  • a non-resident tour operator that is not registered for the GST/HST
  • a non-resident individual, organization, or business (other than a tour operator)

For more information, see GST/HST registrants that paid or credited the rebate under the FCTIP.

How to request a GST/HST ruling on the eligibility of a tour package

Under the GST/HST rulings service, tour operators may choose to request a ruling on whether a tour is an eligible tour package for purposes of the FCTIP. This rulings service gives tour operators certainty on whether they are supplying eligible tour packages. This will help tour operators or their non-resident customers to receive their GST/HST rebates under the FCTIP in a timely fashion. For more information, go to GST/HST Rulings and interpretations, or see Notice 273 GST/HST Rulings Service - Eligibility of Tours under the Foreign Convention and Tour Incentive Program.

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