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:

• ARTISTS’ REPRESENTATIVES (GST/HST) REGULATIONS

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 Section 1 of the Regulations and the heading before it are repealed.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

• (c) the Manitoba Liquor and Lotteries Corporation;

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

• (a) included in Part V of Schedule VI to the Act;
• (b) in respect of which the recipient was entitled to claim a rebate under subsection 252(1) or 260(1) of the Act; or
• (c) made outside Canada, except if the recipient subsequently imported the goods and it is the case that all of the following do not apply in respect of that importation of the goods:
  • (i) tax under section 212 of the Act was payable and was calculated on a value determined under the Value of Imported Goods (GST/HST) Regulations (other than under sections 7, 8, 12 and 13 of those Regulations),
  • (ii) tax under section 212 of the Act was payable by a person that was entitled to obtain a rebate, refund or remission of that tax under any Act of Parliament only because the goods were subsequently exported, and
  • (iii) tax under section 212 of the Act was not payable as a consequence of section 213 of the Act only because the goods were subsequently exported. (fourniture dégrevée)

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):

• (h.1) railway passenger, baggage or freight cars (in this paragraph referred to as “imported cars”) if
  • (i) the imported cars are imported temporarily for use in the transportation of passengers, baggage or freight from a place in Canada to another place in Canada,
  • (ii) railway cars of the same kind and number as the imported cars could not have been acquired from Canadian production or other Canadian sources at a reasonable cost or could not have been delivered or made available in Canada when needed, and
  • (iii) the imported cars are exported on or before the earlier of
    • (A) the day that is one year after the day on which the imported cars are imported, and
    • (B) the day on or before which railway cars of the same kind and number as the imported cars could be delivered or made available in Canada after having been acquired from Canadian production or other Canadian sources at a reasonable cost;

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

• (j.1) a representational gift that is an article
  • (i) that is presented by a donor acting in the capacity as a Head of State, Head of Government or representative of a government, a public body of a foreign country or a political subdivision of a foreign country, to a donee acting in the capacity of the Governor General, the Prime Minister of Canada, a minister of the Government of Canada, a member of the Senate or House of Commons, a provincial premier or a municipal mayor, in the course of an official visit by the donee outside Canada, or
  • (ii) that is to be presented by a donor described in subparagraph (i) in the course of an official visit by the donor to Canada and that is subsequently so presented;

(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):

• (n) goods that are classified under tariff item No. 9813.00.00 or 9814.00.00 of Schedule I to the Customs Tariff, or that would be so classified in the absence of Notes 11(a) and (b) to Chapter 98 of that Schedule, if
  • (i) in the case where the goods are being imported for the first time since the goods were last supplied and delivered or made available to the recipient of that last supply,
    • (A) the supply was made in Canada and was not included in Part V of Schedule VI to the Act and the recipient was not entitled to claim a rebate under subsection 252(1) of the Act in respect of the supply,
    • (B) the supply was made by way of sale and the recipient is returning the goods to the supplier because
      • (I) under the agreement for the supply, or as a consequence of the termination of that agreement, ownership of the goods is never transferred to the recipient or is transferred back to the supplier,
      • (II) the goods are defective or not as ordered by the recipient, or
      • (III) the recipient exported the goods for sale and did not sell the goods, or
    • (C) the supply was made outside Canada by way of lease, licence or similar arrangement by the importer of the goods and the importer
      • (I) exported the goods at a time when the importer was the owner of the goods for the sole purpose of making the supply, and
      • (II) is importing the goods after the termination of the lease, licence or similar arrangement, and
  • (ii) in any other case, the goods were not imported previously or were not last imported in circumstances in which tax, calculated on a value determined under the Value of Imported Goods (GST/HST) Regulations (other than under sections 7, 8 and 12 of those Regulations), was payable.

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

• (n) goods that are classified under tariff item No. 9813.00.00 or 9814.00.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff, or that would be so classified in the absence of paragraphs (a) and (b) of those tariff items, if

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

• (A) the supply of the goods was not a tax-relieved supply,

(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:

• (B) the supply of the goods was made by way of sale by a supplier that did not acquire the goods by way of a tax-relieved supply and the recipient is returning the goods to the supplier because

(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:

• (ii) in any other case, the goods were not imported previously or were not last imported in circumstances in which tax, calculated on a value determined under the Value of Imported Goods (GST/HST) Regulations (other than under sections 7, 8, 12 and 13 of those Regulations), was payable.

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

• (ii) in any other case, the goods were either not imported previously or it is the case that all of the following do not apply in respect of the last importation of the goods:
  • (A) tax under section 212 of the Act was payable and was calculated on a value determined under the Value of Imported Goods (GST/HST) Regulations (other than under sections 7, 8, 12 and 13 of those Regulations),
  • (B) tax under section 212 of the Act was payable by a person that was entitled to obtain a rebate, refund or remission of that tax under any Act of Parliament only because the goods were subsequently exported, and
  • (C) tax under section 212 of the Act was not payable as a consequence of section 213 of the Act only because the goods were subsequently exported.

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:

• (xvii) the City of St. John’s Municipal Taxation Act, S.N.L. 2006, c. C-17.1;

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

• (xiii) section 28 of the City of St. John’s Municipal Taxation Act, S.N.L. 2006, c. C-17.1, and

(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:

• PUBLICATIONS SUPPLIED BY A REGISTRANT (GST/HST) REGULATIONS

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:

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

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:

• (b) the name of the supplier or an intermediary in respect of the supply, or the name under which the supplier or the intermediary does business, and the registration number assigned under section 241 of the Act to the supplier or the intermediary, as the case may be;

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:

• INPUT TAX CREDIT INFORMATION (GST/HST) REGULATIONS

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:

• (i) the name of the supplier or the intermediary in respect of the supply, or the name under which the supplier or the intermediary does business, and the registration number assigned under section 241 of the Act to the supplier or the intermediary, as the case may be,

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

• To formalize and give legal effect to previously announced measures and to provide taxpayers with certainty as to the application of the GST/HST regulations.
• To address needed housekeeping amendments.

Description

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

• — Artists’ Representatives (GST/HST) Regulations;
• — Games of Chance (GST/HST) Regulations;
• — Non-Taxable Imported Goods (GST/HST) Regulations;
• — Taxes, Duties and Fees (GST/HST) Regulations;
• — 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.

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

• Footnote a
  S.C. 1993, c. 27, s. 125(1)
• Footnote b
  R.S., c. E-15
• Footnote 1
  SOR/91-25; SOR/99-174, s. 1
• Footnote 2
  SOR/91-28; SOR/98-440, s. 1; SOR/2011-56, s. 7
• Footnote 3
  SOR/91-31; SOR/2002-277, s. 11
• Footnote 4
  SOR/91-34; SOR/2006-280; s. 1
• Footnote 5
  SOR/91-43; SOR/2000-178, s. 2
• Footnote 6
  SOR/91-44; SOR/2000-179, s. 2
• Footnote 7
  SOR/91-45; SOR/2000-180, s. 1