Notice of Ways and Means Motions
Draft Amendments to Various GST/HST Regulations
Reporting of Grandparented Housing Sales
1 The definition specified housing supply in section 1 of the Electronic Filing and Provision of Information (GST/HST) Regulations is replaced by the following:
specified housing supply means a particular supply made to a person of a residential complex that is a qualifying housing supply and in respect of which the total of all amounts, each of which is the consideration payable for the particular supply or for any other taxable supply made to the person of an interest in the residential complex, is equal to or greater than $450,000.
2 Section 4 of the Regulations is amended by striking out "or" at the end of paragraph (a), by adding "or" at the end of paragraph (b) and by adding the following after paragraph (b):
(c) a return for the reporting period in respect of which the person makes an election under section 8.1.
3 The Regulations are amended by adding the following after section 8:
Simplified reporting of specified housing supplies — election
8.1 (1) If a person makes specified housing supplies in respect of which tax under subsection 165(1) of the Act becomes payable before May 1, 2016 and the person files an election in respect of a particular reporting period of the person that ends on or after May 1, 2016 and before 2017 or, if no reporting period ends on or after May 1, 2016 and before 2017, that is the first reporting period of the person that ends after 2016, for the purposes of section 284.01 of the Act, the following amounts are prescribed amounts in respect of a specified return for the particular reporting period:
(a) for each calendar year, beginning with 2010 and ending with the calendar year in which the particular reporting period ends, the total of all consideration for specified housing supplies made by the person in Ontario in respect of which tax becomes payable during that calendar year but on or before the last day of the particular reporting period;
(b) for each calendar year, beginning with 2010 and ending with the calendar year in which the particular reporting period ends, the total of all consideration for specified housing supplies made by the person in Nova Scotia in respect of which tax becomes payable during that calendar year but on or before the last day of the particular reporting period;
(c) for each calendar year, beginning with 2010 and ending with 2013, the total of all consideration for specified housing supplies made by the person in British Columbia in respect of which tax becomes payable during that calendar year but before April 1, 2013; and
(d) for each calendar year, beginning with 2013 and ending with the calendar year in which the particular reporting period ends, the total of all consideration for specified housing supplies made by the person in Prince Edward Island in respect of which tax becomes payable during that calendar year but on or before the last day of the particular reporting period.
Non-application of sections 3 and 8
(2) If an election is filed by a person under subsection (1) in respect of a particular reporting period of the person,
(a) section 3 does not apply to a return filed for the particular reporting period; and
(b) section 8 does not apply to the particular reporting period and to any reporting period of the person ending before the particular reporting period.
Form and filing of election
(3) An election under subsection (1) in respect of a particular reporting period of a person is to
(a) be made in prescribed form containing prescribed information; and
(b) be filed by the person with the Minister in prescribed manner on or after May 1, 2016 but no later than the day on or before which the return for the particular reporting period is required to be filed.
4 Section 12 of the Regulations is replaced by the following:
Number of housing units
12 If a person is required to report an amount determined under any of sections 8 to 10 in respect of residential complexes in a specified return for a reporting period of the person, for the purposes of section 284.01 of the Act, the number (in these Regulations referred to as the "specified number") of those residential complexes that were supplied by the person in each of Ontario, Nova Scotia, British Columbia and Prince Edward Island and in respect of which the amount is determined under any of sections 8 to 10 for the reporting period is prescribed information.
5 Section 1 applies
(a) in respect of any reporting period of a person that ends after Budget Day; and
(b) to any supply made by a person of a residential complex that is a qualifying housing supply in respect of which tax under subsection 165(1) of the Act becomes payable on or after July 1, 2010 but on or before the last day of a reporting period if the person files an election under section 8.1 of the Electronic Filing and Provision of Information (GST/HST) Regulations, as enacted by section 3, in respect of the reporting period.
6 Sections 2 to 4 apply in respect of any reporting period of a person that ends on or after July 1, 2010.
Closely Related Test
7 (1) The portion of section 3 of the Closely Related Corporations (GST/HST) Regulations before subparagraph (a)(i) is replaced by the following:
3 For the purposes of paragraph 128(1)(b) of the Act, a corporation (in this section referred to as the "other corporation") is a prescribed corporation in relation to a particular corporation if
(a) it is the case that
(2) The portion of subparagraph 3(a)(i) of the French version of the Regulations before clause (A) is replaced by the following:
(i) les actions déterminées de l'autre personne morale représentant au moins 90 % de la valeur et du nombre de telles actions remplissent chacune l'une des conditions suivantes :
(3) Subclause 3(a)(i)(C)(II) of the Regulations is replaced by the following:
(II) a corporation in respect of which employees referred to in subclause (I) hold qualifying voting control and own not less than 90% of the total value and number of all specified shares,
(4) Subparagraph 3(a)(ii) of the French version of the Regulations is replaced by the following:
(ii) les actions déterminées de l'autre personne morale représentant au moins 50 % de la valeur et du nombre de telles actions appartiennent chacune à une personne morale visée aux divisions (i)(A) ou (B),
(5) Paragraph 3(a) of the Regulations is amended by striking out "and" at the end of subparagraph (i), by adding "and" at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
(iii) the particular corporation would hold qualifying voting control in respect of the other corporation if the particular corporation were to own
(A) all of the issued and outstanding specified shares of the capital stock of the other corporation that are included in clauses (i)(A) to (D), and
(B) all of the issued and outstanding shares of the capital stock of the other corporation that are not specified shares and that would be included in clauses (i)(A) to (D) if they were specified shares; or
(6) Paragraph 3(b) of the Regulations is replaced by the following:
(b) qualifying voting control in respect of the other corporation is held by and not less than 90% of the total value and number of all specified shares of the other corporation are owned by
(i) the particular corporation,
(ii) a corporation that is closely related to the particular corporation by reason of paragraph 128(1)(a) of the Act,
(iii) a corporation that is a prescribed corporation in relation to the particular corporation by reason of paragraph (a), or
(iv) any combination of the corporations referred to in subparagraphs (i) to (iii).
8 Section 7 applies as of the day that is one year after Budget Day. It also applies as of the day after Budget Day
(a) in respect of an election under subsection 150(1) or 156(2) of the Act that is to become effective on a day that is after Budget Day but before the day that is one year after Budget Day, unless the election is filed on or before Budget Day; and
(b) for the purpose of applying paragraphs 4(3)(b) and (c) of the Financial Services and Financial Institutions (GST/HST) Regulations in respect of a supply of a service if the agreement for the supply is entered into after Budget Day but before the day that is one year after Budget Day and it is not the case that all or substantially all of the service will be performed before the day that is one year after Budget Day.
Eligible Capital Property
9 (1) The definition eligible capital property in subsection 2(1) of the Streamlined Accounting (GST/HST) Regulations is repealed.
(2) The definition capital asset in subsection 2(1) of the Regulations is replaced by the following:
capital asset of a person means
(a) property that is, or would be if the person were a taxpayer under the Income Tax Act, capital property of the person within the meaning of that Act, and
(b) in respect of a supply that was made by the person at any time before January 1, 2017, property that was, or would have been if the person were a taxpayer under the Income Tax Act, eligible capital property of the person within the meaning of that Act as it read at that time;
(3) The descriptions of A and B in subsection 2(2) of the Regulations are replaced by the following:
A is the total of all consideration (other than consideration referred to in section 167.1 of the Act that is attributable to goodwill of a business) that became due, or was paid without having become due, to the registrant in the threshold period for the reporting period for taxable supplies (other than supplies of financial services, supplies by way of sale of real property or capital assets of the registrant and supplies deemed under subsection 177(1.2) of the Act to be made by the registrant) that are or would be, but for that subsection, made in Canada by the registrant;
B is the total of all tax under Division II that became collectible in the threshold period in respect of taxable supplies (other than supplies of financial services, supplies by way of sale of real property or capital assets of the registrant and supplies deemed under subsection 177(1.2) of the Act to be made by the registrant) that are or would be, but for that subsection, made in Canada by the registrant; and
(4) The descriptions of A and B in paragraph 2(3)(a) of the Regulations are replaced by the following:
A is the total of all consideration (other than consideration referred to in section 167.1 of the Act that is attributable to goodwill of a business) for taxable supplies (other than supplies of financial services and supplies by way of sale of real property or capital assets of the registrant) made by the registrant that became due, or was paid without having become due, to the registrant in the threshold period for the reporting period,
B is the total of all tax under Division II that became collectible in the threshold period in respect of taxable supplies (other than supplies of financial services and supplies by way of sale of real property or capital assets of the registrant) made by the registrant, and
(5) The descriptions of D and E in paragraph 2(3)(b) of the Regulations are replaced by the following:
D is the total of all consideration (other than consideration referred to in section 167.1 of the Act that is attributable to goodwill of a business) for taxable supplies (other than supplies of financial services and supplies by way of sale of real property or capital assets of the associate) made by the associate that became due, or was paid without having become due, to the associate in the particular fiscal year,
E is the total of all tax under Division II that became collectible in the particular fiscal year in respect of taxable supplies (other than supplies of financial services and supplies by way of sale of real property or capital assets of the associate) made by the associate, and
10 (1) The definition specified property in subsection 15(1) of the Regulations is replaced by the following:
specified property, in respect of a person, means property of the person other than real property and capital assets of the person;
(2) Paragraph (a) of the definition specified supply in subsection 15(1) of the Regulations is replaced by the following:
(a) a supply by way of sale of real property or capital assets of the supplier,
11 (1) The definition specified property in subsection 19(1) of the Regulations is repealed.
(2) Paragraph (a) of the definition designated supply in subsection 19(1) of the Regulations is replaced by the following:
(a) a supply by way of sale of real property or capital assets of the supplier,
(3) Paragraphs (b) and (c) of the definition specified supply in subsection 19(1) of the Regulations are replaced by the following:
(b) a supply by way of sale of a capital asset of the registrant that has a fair market value at the time of the supply of at least $10,000,
(c) a supply made by the registrant by way of sale of a capital asset of the registrant if the registrant has claimed, or is entitled to claim, an input tax credit in respect of the last supply to, or importation by, the registrant of the capital asset,
(4) The description of B in subparagraph 19(3)(c)(i) of the Regulations is replaced by the following:
B is the total of all tax under Division II that became collectible in the fiscal year of the registrant immediately before the particular fiscal year in respect of taxable supplies (other than supplies by way of sale of real property or capital assets of the registrant) made by the registrant, and
12 Subparagraphs (a)(ii) and (iii) of the description of C in subsection 21(1) of the Regulations are replaced by the following:
(ii) for the particular reporting period or a preceding reporting period of the registrant during which the election was in effect in respect of a supply by way of sale to, importation by, or bringing into a participating province by, the registrant of personal property acquired, imported or brought into the participating province by the registrant for use as a capital asset of the registrant, which personal property has a fair market value at the time of the supply or bringing into the province, or a value as determined under section 215 of the Act at the time of the importation, of at least $10,000,
(iii) for the particular reporting period or a preceding reporting period of the registrant during which the election was in effect in respect of an improvement to a capital asset (other than real property) of the registrant, if the registrant has claimed, or is entitled to claim, an input tax credit in respect of the last supply to, or importation by, the registrant of the capital asset,
13 Subsection 9(1) applies in respect of supplies made on or after January 1, 2017.
14 Subsections 9(2) to (5) and sections 10 to 12 come into force on January 1, 2017.