Voluntary registration allowing a non-resident to recover GST/HST incurred in Canada.

A non-resident business expected to incur significant expenses while organizing an event in Canada. It did not maintain a sufficient presence in Canada to be required to register for GST/HST.

Without registration, the GST/HST paid on Canadian expenses would have been an unrecoverable cost. The question was whether voluntary registration would allow the business to claim input tax credits without making its service to a non-resident recipient taxable.

After reviewing the planned activities and applicable rules, Alexandre arranged a voluntary registration at the appropriate time. The position was that the business was engaged in a commercial activity and could claim input tax credits, while its service remained zero-rated.

The business recovered the eligible input tax credits on its Canadian expenses without having to collect GST/HST on its zero-rated service. The CRA reviewed the first return and accepted the claim. Converting tax that would otherwise have been a cost into a recoverable amount directly improved the profit margin on the Canadian engagement.

A non-resident that is not required to register may still benefit from doing so voluntarily. When a commercial activity generates significant taxable expenses in Canada, registration at the right time can protect the profitability of the engagement while preserving the correct tax treatment of the services supplied.