CRA has released a letter which discusses whether GST/HST applies to membership dues. This particular letter involved a non-profit corporation seeking a GST/HST exemption for dues paid by its members. Based on the information provided by the non-profit corporation, CRA concluded that members were receiving a direct benefit as a result of their membership and therefore did not meet the GST/HST exemption criteria set out in section 17 of Part VI of Schedule V.

CRA made the following comments on section 17 and its inapplicability to the non-profit corporation.

“…the supplies of the Corporation’s memberships are not exempt under section 17 of Part VI of Schedule V.  This section provides that the supply of a membership in a public sector body (which includes a non-profit organization) is exempt where each member does not receive a benefit, by reason of the membership, other than those listed in that section. Paragraph 17(a) allows an indirect benefit that is intended to accrue to all members collectively … It is not only the actual benefit provided to the member but also the potential for benefits that determines the tax status of the supply of the membership” 

To read the full CRA letter, please click here.