If you’re a travel professional or operate a travel agency business and you sell accommodation or camping packages in Canada, you don’t want to miss out on a potential tax rebate. Under the Foreign Convention and Tour Incentive Program, you may be able to claim a rebate on the GST/HST taxes you pay on sold accommodations.
You have to sell a tour package for an all-inclusive price to be eligible for the FCTIP rebate, and it has to include the following elements:
- a short-term and/or camping accommodation in Canada
- at least one service (a service does not include items classified as property, such as meals or admission fees, or services included in an all-inclusive accommodations package)
If you are eligible to claim a rebate for the tax paid on short-term and/or camping accommodation in Canada 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.
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 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 package are ineligible accommodations, such as overnight shelter on a boat or train. The reduced rebate amount is calculated as follows:
- (A/B) x 50% x GST or HST paid
- A = the number of nights of short-term and/or camping accommodations in Canada included in the tour package
- B = the total number of nights in Canada included in the tour package, including ineligible accommodation
Special eligibility rules apply to foreign travel operators, but, if you’re eligible for the rebate, you’re only required to submit an application to take advantage of this opportunity to help your bottom line.