Vol. 148, No. 24 — November 19, 2014

Registration

SOR/2014-248 October 31, 2014

EXCISE TAX ACT

Regulations Amending Various GST/HST Regulations, No. 6

P.C. 2014-1156 October 30, 2014

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 277 (see footnote a) of the Excise Tax Act (see footnote b), makes the annexed Regulations Amending Various GST/HST Regulations, No. 6.

REGULATIONS AMENDING VARIOUS GST/HST REGULATIONS, NO. 6

PART 1

ARTISTS’ REPRESENTATIVES (GST/HST) REGULATIONS

1. The long title of the Artists’ Representatives (GST/HST) Regulations (see footnote 1) is replaced by the following:

2. Section 1 of the Regulations and the heading before it are repealed.

3. The schedule to the Regulations is amended by striking out the following:

Neighbouring Rights Collective of Canada (NRCC)

4. The schedule to the Regulations is amended by adding the following in alphabetical order:

Re:Sound

PART 2

GAMES OF CHANCE (GST/HST) REGULATIONS

5. Paragraph 3(c) of the Games of Chance (GST/HST) Regulations (see footnote 2) is replaced by the following:

PART 3

NON-TAXABLE IMPORTED GOODS (GST/HST) REGULATIONS

6. Section 2 of the Non-Taxable Imported Goods (GST/HST) Regulations (see footnote 3) is amended by adding the following in alphabetical order:

“tax-relieved supply” means a supply of goods

7. (1) Paragraph 3(h) of the Regulations is amended by adding “or” at the end of subparagraph (iii) and by repealing subparagraph (iv).

(2) Section 3 of the Regulations is amended by adding the following after paragraph (h):

(3) Section 3 of the Regulations is amended by adding the following after paragraph (j):

(4) Section 3 of the Regulations is amended by striking out “and” at the end of paragraph (l), by adding “and” at the end of paragraph (m) and by adding the following after paragraph (m):

(5) The portion of paragraph 3(n) of the Regulations before subparagraph (i), as enacted by subsection (4), is replaced by the following:

(6) Clause 3(n)(i)(A) of the Regulations, as enacted by subsection (4), is replaced by the following:

(7) The portion of clause 3(n)(i)(B) of the Regulations before subclause (I), as enacted by subsection (4), is replaced by the following:

(8) Clause 3(n)(i)(C) of the Regulations, as enacted by subsection (4), is amended by adding the following before subclause (I) and by renumbering subclauses (I) and (II) as subclauses (II) and (III), respectively:

(I) did not acquire the goods by way of a tax-relieved supply,

(9) Subparagraph 3(n)(ii) of the Regulations, as enacted by subsection (4), is replaced by the following:

(10) Subparagraph 3(n)(ii) of the Regulations, as enacted by subsection (9), is replaced by the following:

PART 4

TAXES, DUTIES AND FEES (GST/HST) REGULATIONS

8. (1) Subparagraph 3(a)(xvii) of the Taxes, Duties and Fees (GST/HST) Regulations (see footnote 4) is replaced by the following:

(2) Subparagraph 3(c)(xiii) of the Regulations is replaced by the following:

(3) Paragraph 3(c) of the Regulations, as amended by subsection (2), is amended by adding “and” at the end of subparagraph (xii) and by repealing subparagraph (xiii).

PART 5

PUBLICATIONS SUPPLIED BY A REGISTRANT (GST/HST) REGULATIONS

9. The long title of the Publications Supplied by a Registrant (GST/HST) Regulations (see footnote 5) is replaced by the following:

10. Section 1 of the Regulations and the heading before it are repealed.

11. The definition “registration number” in section 2 of the Regulations is replaced by the following:

“registration number” means a registration number assigned under section 241 of the Act. (numéro d’inscription)

PART 6

CREDIT NOTE AND DEBIT NOTE INFORMATION (GST/HST) REGULATIONS

12. The long title of the Credit Note and Debit Note Information (GST/HST) Regulations (see footnote 6) is replaced by the following:

13. Section 1 of the Regulations and the heading before it are repealed.

14. Paragraph 3(b) of the Regulations is replaced by the following:

PART 7

INPUT TAX CREDIT INFORMATION (GST/HST) REGULATIONS

15. The long title of the Input Tax Credit Information (GST/HST) Regulations (see footnote 7) is replaced by the following:

16. Section 1 of the Regulations and the heading before it are repealed.

17. Subparagraph 3(b)(i) of the Regulations is replaced by the following:

PART 8

APPLICATION

18. Sections 3 and 4 are deemed to have come into force on March 12, 2010.

19. Section 5 is deemed to have come into force on April 1, 2014.

20. Section 6 is deemed to have come into force on April 8, 2014.

21. Subsections 7(1) and (2) are deemed to have come into force on January 1, 1998.

22. Subsection 7(3) is deemed to have come into force on July 1, 2013.

23. Subsection 7(4) is deemed to have come into force on December 31, 1990.

24. Subsection 7(5) applies to goods imported on or after January 1, 1998 and to goods imported before that day that were not accounted for under section 32 of the Customs Act before that day.

25. Subsections 7(6) to (8) and (10) apply to goods imported on or after April 8, 2014 and to goods imported before that day that are, on or after that day, accounted for under subsection 32(1), paragraph 32(2)(a) or subsection 32(5) of the Customs Act or released in the circumstances set out in paragraph 32(2)(b) of that Act.

26. Subsection 7(9) applies to goods that are released after March 1991.

27. Subsections 8(1) and (2) are deemed to have come into force on January 1, 2007.

28. Subsection 8(3) comes into force, or is deemed to have come into force, on July 1, 2014.

29. Sections 11, 14 and 17 are deemed to have come into force on July 1, 2010.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

On April 8, 2014, the Department of Finance released, for consultation, a number of draft regulatory proposals relating to technical and housekeeping changes to the Goods and Services Tax/Harmonized Sales Tax (GST/HST). Also, on February 11, 2014, the Economic Action Plan 2014 proposed consequential GST/HST amendments to the proposed customs tariff treatment of the Governor General. The Regulations Amending Various GST/HST Regulations, No. 6 (the Regulations) implement these GST/HST amendments as well as some other purely housekeeping GST/HST amendments.

Many of these proposals respond to issues brought to the attention of the Department by taxpayers and their representatives. The Regulations are part of an ongoing effort to ensure that tax legislation is clear and reflects its underlying policy intent. All of the provisions contained in the Regulations are amendments to existing GST/HST regulations.

Objectives

Description

Specifically, the Regulations comprise amendments to the following GST/HST regulations:

Artists’ Representatives (GST/HST) Regulations

Special simplification rules are used to determine the GST/HST treatment where a registrant prescribed by regulations, in the course of a commercial activity, makes a supply on behalf of another person in respect of a copyright or other intangible property of an artist. The Regulations update the Artists’ Representatives (GST/HST) Regulations to reflect a change in the corporate name of one of the registrants prescribed by regulations.

Games of Chance (GST/HST) Regulations

The Games of Chance (GST/HST) Regulations set out special rules under which provincial gaming authorities (e.g. provincial lottery and casino corporations) prescribed by regulations calculate their GST/HST remittances. Recently, the Manitoba Liquor and Lotteries Corporation Act amalgamated the Manitoba Lotteries Corporation (which is prescribed by regulations for the purposes of the Games of Chance (GST/HST) Regulations) and the Liquor Control Commission to create the new Manitoba Liquor and Lotteries Corporation. The Regulations update the Games of Chance (GST/HST) Regulations to reflect the new name of this provincial gaming authority.

Non-Taxable Imported Goods (GST/HST) Regulations

The Non-Taxable Imported Goods (GST/HST) Regulations provide for the granting of relief from GST/HST on importations of goods under certain circumstances. The Regulations codify the long-standing administration by the Canada Border Services Agency (CBSA) of relief related to the tax treatment upon re-entry into Canada of Canadian goods on which GST/HST has already been paid. In addition to codifying the current long-standing relieving administrative treatment, a number of exclusions to that administrative treatment are made in order to prevent possible tax avoidance opportunities. For example, the exclusions cover circumstances where the GST/HST was relieved or rebated on an exported good. If such goods are not excluded from the Canadian goods returned relief, they could be subsequently re-imported into Canada tax-free, thereby having a competitive tax advantage over similar domestically supplied goods. The Regulations also simplify the tax treatment of the temporary importation of certain railcars by codifying in GST/HST regulations the GST/HST relief by CBSA under an outdated and unnecessarily complex remission order, generally allowing GST/HST-free temporary importation of railcars for 12 months.

The Regulations also ensure that the same GST/HST relief applies to representational gifts to the Governor General as applies to certain other public office holders, as proposed in Budget 2014. A representational gift is an article that is presented, in the course of certain official visits, by certain donors, such as those acting in the capacity of a representative of a government. In addition, for the purposes of simplification, the GST/HST relief applying to representational gifts are prescribed under the GST/HST regulations instead of under a remission order.

Taxes, Duties and Fees (GST/HST) Regulations

The Taxes, Duties and Fees (GST/HST) Regulations exclude certain provincial taxes from the GST/HST base. The main exclusions are provincial land transfer taxes, general provincial sales taxes and any specific ad valorem provincial tax that is imposed on a property or service in lieu of a general sales tax in a province. The Regulations remove a reference to the City of St. John’s Municipal Taxation Act (which imposes a tax on certain accommodation in the city of St. John’s) as this accommodation tax is not a land transfer tax, a general provincial sales tax or a specific tax imposed on property or a service in lieu of a general sales tax in a province, as the HST applies throughout the province of Newfoundland and Labrador. The Regulations also include a housekeeping amendment to update a cross-reference.

Publications Supplied by a Registrant (GST/HST) Regulations, Credit Note and Debit Note Information (GST/HST) Regulations and Input Tax Credit Information (GST/HST) Regulations

The Regulations update a cross-reference to a provision of the Excise Tax Act. This clarification is consequential to the addition in the Excise Tax Act of the authority to assign a registration number to a group of certain financial institutions under a different subsection of the same section of this Act.

“One-for-One” Rule

The “One-for-One” Rule does not apply to the Regulations, as there are no administrative impacts on business.

Small business lens

The small business lens does not apply to the Regulations, as there are no additional costs imposed on business.

Consultation

The Regulations contain measures that have been released for consultation by the Department of Finance on April 8, 2014, and on February 11, 2014.

Rationale

The Regulations formalize and give legal effect to previously announced amendments and ensure the proper operation of the GST/HST regulations. The Regulations codify existing administrative practices, simplify the tax treatment of the importation of certain goods and include amendments that are housekeeping in nature or consequential to amendments to the Excise Tax Act. The Regulations are part of an ongoing effort to ensure that tax legislation is clear and reflects its underlying policy intent.

Contacts

Carlos Achadinha
Sales Tax Division
Department of Finance
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Telephone: 613-369-3787

Marcel Boivin
Excise and GST/HST Rulings Directorate
Canada Revenue Agency
320 Queen Street
Ottawa, Ontario
K1A 0L5
Telephone: 613-954-7959