What is it?
The Place of Supply rule arises out of the Income Tax Act of Canada. The Act stipulates that the application of retail tax rates on goods and services is based on where the good or service will be consumed.
Why is it important?
For units involved in the sale of goods and services, understanding the place of supply rule is critical to ensuring the appropriate retail taxes are applied on an invoice when goods or services are sold to parties outside the University. For example, a good sold to a third party within Ottawa, unless exempt or zero-rated, must be invoiced with HST of 13% on top of the sale amount, but that same good, if it were shipped to British Columbia, would include GST at 5% rather than HST.
When entering a travel expense report when using the Travel and Expense Reimbursement System, the tax locale field is a representation of the place of supply rule. For each expense incurred, the tax locale represents where you consumed the item. By selecting the appropriate tax locale, the system will attempt to calculate retail taxes based on the place of supply.
Where do I find more information?
For additional information on the place of supply rules, contact Financial Services.