News and Insights

Department of Finance Draft Regulations re: The Place of Supply of Property and Services

Tax Development May 01, 2010

The federal Department of Finance has released draft regulations to provide additional information and certainty for stakeholders regarding the proposed HST place of supply rules announced on February 25, 2010.   

Further clarification has been provided in determining the place of supply in respect of services and intangibles where the place of supply cannot be determined to be in a single participating province, in the case where the tax rates for the two or more participating provinces related to the supply are the same.  In this case, the place of supply will be the participating province where the supplier is located, provided the supplier is located in one of the specified provinces.  If the supplier is not located in one of the specified provinces, the place of supply will be the participating province that is closest in proximity to the business address of the supplier that is most closely connected with the supply.  

In addition, the draft regulations contain a revision to the proposed place of supply rule for litigation-related services.  Where a service is provided in relation to a criminal, civil or administrative litigation (other than a service rendered before the start of such litigation), the place of supply will be determined based on the jurisdiction of the court or other tribunal established under the laws of that province.  

Draft Regulations Place of Supply