CRA characterizes giving access to CPD programs as a supply of IPP for ETA purposes

The “Party”, which was some sort of non-profit professional body (e.g., perhaps something like a provincial law society), agreed with the “Company” (also a registrant and, apparently, a non-resident) that the Company, which operated a website that provided on-demand video content, would post videos of conferences or programs (presented by Canadian residents) that qualified for continuing professional development purposes so as to allow Canadian professionals to access such content.

Regarding the treatment of such royalties, CRA indicated that the supply of a right to use intellectual property, such as video content, where the supplier retains ownership of the content, is characterized as a supply of intangible personal property (IPP) for GST/HST purposes. Because the Party's supply of a licence or right to use its content would generally be considered a supply of IPP and, because the supply of the IPP could be used in whole or in part in Canada, the place of the supply was in Canada. Thus, royalties paid by the Company to the Party (which, in turn, were a percentage of the royalty charges by the Company to the Canadian professional users) were subject to GST/HST under the ETA s. 142(1)(c) rule.

In addition, the provincial place of supply rules in s. 8(b) of the New Harmonized Value-added Tax System Regulations would generally apply.

Neal Armstrong. Summary of 25 October 2024 GST/HST Interpretation 247380 under ETA s. 142(1)(c).