New Harmonized Value-added Tax System Regulations

 
FREE EXCERPT

Vol. 144, No. 12 — June 9, 2010

Registration

SOR/2010-117 May 31, 2010

EXCISE TAX ACT

New Harmonized Value-added Tax System Regulations P.C. 2010-701 May 31, 2010

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 277 and 277.1 of the Excise Tax Act , hereby makes the annexed New Harmonized Value-added Tax System Regulations.

NEW HARMONIZED VALUE-ADDED TAX SYSTEM REGULATIONS

INTERPRETATION

Definitions

  1. The following definitions apply in these Regulations.

    “Act” « Loi »

    “Act” means the Excise Tax Act.

    “continuous journey” « voyage continu »

    “continuous journey” has the same meaning as in subsection 1(1) of Part VII of Schedule VI to the Act.

    PART 1

    PLACE OF SUPPLY

    DIVISION 1

    INTERPRETATION

    Definitions

  2. The following definitions apply in this Part.

    “Canadian element” « élément canadien »

    “Canadian element” of a service means the portion of the service that is performed in Canada.

    “Canadian rights” « droits canadiens »

    “Canadian rights”, in respect of intangible personal property, means that part of the property that can be used in Canada.

    “computer-related service” « service informatique »

    “computer-related service” means

    (a) a technical support service that is provided by means of telecommunications and relates to the operation or use of computer hardware or software; or

    (b) a service involving the electronic storage of information and computer-to-computer transfer of information.

    “final recipient” « dernier acquéreur »

    “final recipient”, in respect of a computer-related service or access to the Internet, means a person that is the recipient of a supply of the service or access and that acquires it otherwise than for the purpose of supplying it to another person.

    “RDSP” « REEI »

    “RDSP” means a registered disability savings plan as defined in subsection 248(1) of the Income Tax Act.

    “RESP” « REEE »

    “RESP” means a registered education savings plan as defined in subsection 248(1) of the Income Tax Act.

    “RRIF” « FERR »

    “RRIF” means a registered retirement income fund as defined in subsection 248(1) of the Income Tax Act.

    “RRSP” « REER »

    “RRSP” means a registered retirement savings plan as defined in subsection 248(1) of the Income Tax Act.

    “specified location” « emplacement déterminé »

    “specified location” of a supplier means

    (a) a permanent establishment of the supplier; or

    (b) a vending machine.

    “TFSA” « CÉLI »

    “TFSA” has the same meaning as in subsection 248(1) of the Income Tax Act.

    Deemed delivery

  3. For the purposes of this Part, property is deemed to be delivered in a particular province by a supplier and is deemed not to be delivered in any other province by the supplier if the supplier

    (a) ships the property to a destination in the particular province that is specified in the contract for carriage of the property or transfers possession of the property to a common carrier or consignee that the supplier has retained on behalf of the recipient to ship the property to such a destination; or

    (b) sends the property by mail or courier to an address in the particular province.

    Application

  4. (1) This Part applies for the purposes of section 3 of Part IX of Schedule IX to the Act.

    Transition — Ontario and British Columbia

    (2) For the purposes of applying the provisions of Part 3 in relation to the application of this Part between February 25, 2010 and July 1, 2010, the following rules apply:

    (a) Ontario and British Columbia are deemed to be participating provinces;

    (b) the tax rate for Ontario is deemed to be 8%; and

    (c) the tax rate for British Columbia is deemed to be 7%.

    DIVISION 2

    INTANGIBLE PERSONAL PROPERTY

    Application

  5. This Division does not apply to intangible personal property to which Part VII or VIII of Schedule IX to the Act applies.

    Canadian rights primarily in participating provinces

  6. (1) A supply of intangible personal property (other than intangible personal property that relates to real property or to tangible personal property) in respect of which the Canadian rights can only be used primarily in participating provinces is made in a participating province if an equal or greater proportion of those Canadian rights cannot be used in another participating province.

    Canadian rights primarily in participating provinces

    (2) Subject to subsection (1), a supply of intangible personal property (other than intangible personal property that relates to real property or to tangible personal property) in respect of which the Canadian rights can only be used primarily in participating provinces is made in a particular participating province if,

    (a) in the case of a supply for which the value of the consideration is $300 or less that is made through a specified location of the supplier in the particular participating province and in the presence of an individual who is, or who acts on behalf of, the recipient, the intangible personal property can be used in the particular participating province;

    (b) in the case of a supply that is not determined under paragraph (a) to be made in a participating province, the following conditions are satisfied:

    (i) in the ordinary course of business of the supplier, the supplier obtains an address (in this paragraph referred to as the “particular address”) that is

    (A) if the supplier obtains only one address that is a home or a business address in Canada of the recipient, the home or business address in Canada obtained by the supplier,

    (B) if the supplier obtains more than one address described in clause (A), the address described in that clause that is most closely connected with the supply, or

    (C) in any other case, the address in Canada of the recipient that is most closely connected with the supply,

    (ii) the particular address is in the particular participating province, and

    (iii) the intangible personal property can be used in the particular participating province; and

    (c) in the case of a supply that is not determined under paragraph (a) or (b) to be made in a participating province, the tax rate for the particular participating province is the highest among the tax rates for the participating provinces in which the intangible personal property can be used.

    Canadian rights primarily in non-participating provinces

  7. A supply of intangible personal property (other than intangible personal property that relates to real property or to tangible personal property) in respect of which the Canadian rights can only be used primarily in non-participating provinces is made in a non-participating province.

    Canadian rights — no primary location of use

  8. A supply of intangible personal property (other than intangible personal property that relates to real property or to tangible personal property) in respect of which the Canadian rights can be used otherwise than only primarily in participating provinces and otherwise than only primarily outside participating provinces is made in a particular province if,

    (a) in the case of a supply for which the value of the consideration is $300 or less that is made through a specified location of the supplier in the particular province and in the presence of an individual who is, or who acts on behalf of, the recipient, the intangible personal property can be used in the particular province;

    (b) in the case of a supply that is not determined under paragraph (a) to be made in a province, the following conditions are satisfied:

    (i) in the ordinary course of business of the supplier, the supplier obtains an address (in this paragraph referred to as the “particular address”) that is

    (A) if the supplier obtains only one address that is a home or a business address in Canada of the recipient, the home or business address in Canada obtained by the supplier,

    (B) if the supplier obtains more than one address described in clause (A), the address described in that clause that is most closely connected with the supply, or

    (C) in any other case, the address in Canada of the recipient that is most closely connected with the supply,

    (ii) the particular address is in the particular province, and

    (iii) the intangible personal property can be used in the particular province; and

    (c) in the case of a supply that is not determined under paragraph (a) or (b) to be made in a province, the tax rate for the particular province is the highest among the tax rates for the provinces in which the intangible personal property can be used.

    Intangible personal property that relates to real property

  9. A supply of intangible personal property that relates to real property is made

    (a) in a participating province if the real property that is situated in Canada is situated primarily in participating provinces and

    (i) an equal or greater proportion of the real property is not situated in another participating province, or

    (ii) if subparagraph (i) does not apply, the tax rate for the participating province is the highest among the participating provinces for which no greater proportion of the real property is situated in another participating province; and

    (b) in a non-participating province if the real property that is situated in Canada is not situated primarily in participating provinces.

    Intangible personal property that relates to tangible personal property

  10. A supply of intangible personal property that relates to tangible personal property is made

    (a) in a participating province if the tangible personal property that is ordinarily located in Canada is ordinarily located primarily in participating provinces and

    (i) an equal or greater proportion of the tangible personal property is not ordinarily located in another participating province, or

    (ii) if subparagraph (i) does not apply, the tax rate for the participating province is the highest among the participating provinces for which no greater proportion of the tangible personal property is ordinarily located in another participating province; and

    (b) in a non-participating province if the tangible personal...

To continue reading

FREE SIGN UP