Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 217998
[Dear Client]
Subject: GST/HST Interpretation
[…][Calculation of the British Columbia Transitional Tax Rebate (BCTTR)]
We are writing in response to […][your correspondence] concerning the treatment of the British Columbia Transitional Tax Rebate (BCTTR) […] for purposes of the Goods and Services Tax/Harmonized Sales tax (GST/HST) and the New Housing Transition Tax (NHTT). We apologize for the delay in our response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
[…]
We understand that a registrant (the Registrant) sold [#] residential properties located in British Columbia during the period [mm/dd/yyyy] to [mm/dd/yyyy]. […]
INTERPRETATION REQUESTED
[…], is the BCTTR an “allowable rebate” for purposes of subsection 296(2.1) of the ETA [when determining the net tax of the Registrant and the NHTT]?
INTERPRETATION PROVIDED
Subsection 19(1) of the New Housing Transition Tax and Rebate Act (NHTTRA) of British Columbia imposes upon a recipient of a “taxable sale”, a tax in respect of the sale equal to 2% of the value of the consideration for the sale. Subsection 1(1) of the NHTTRA defines “taxable sale” generally to be a sale of an affixed residential complex, or of an interest in an affixed residential complex by a builder of the complex or by a builder of an addition to the complex if the tax point in respect of the sale is after March 31, 2013 and before April 1, 2015, and construction or substantial renovation of the complex was at least 10% completed before April 1, 2013.
Subsection 21(3) of the NHTTRA provides, in part, that a supplier in respect of a taxable sale of an affixed residential complex, or a qualifying interest in an affixed residential complex, if tax was payable under the NHTTRA, is entitled to a rebate in respect of the affixed residential complex, the qualifying interest in the affixed residential complex or the addition, as the case may be.
Section 83 of the NHTTRA provides, in part, that the Provincial minister may enter into an administrative agreement with the government of Canada respecting the administration and enforcement of all or part of the NHTTRA, along with any regulations made under the NHTTRA. The New Housing Transition Tax and Rebate Act Administration Agreement (The Administrative Agreement) was entered into between the government of Canada and the government of British Columbia.
Subsection 3(1) of the NHTTRA addresses the provisions of Part IX of the ETA and federal regulations that are made applicable for purposes of the NHTTRA. Generally, paragraph 3(1)(a) provides that any reference made to tax in a section of the ETA is to be read as a reference to tax under the NHTTRA. Paragraph 3(1)(b) generally provides that a reference made to net tax in the ETA is to be read as a reference to a “remittance amount” under the NHTTRA. Paragraph 3(1)(c) generally provides that a reference to net tax in section 225 of the ETA is to be read as a reference to the definition of “remittance amount” under subsection 1(1) of the NHTTRA. Additionally, paragraph 3(1)(e) generally provides that a reference made to a rebate in the ETA is to be read as a reference to a rebate under the NHTTRA. As a result, the sections of the ETA that contain those terms apply for the purposes of the NHTTRA as though those sections have been enacted as provision for the NHTTRA.
Section 62 of the NHTTRA allows for the Minister of National Revenue (the Minister) to assess the “remittance amount” of a person. Subsection 1(1) defines “remittance amount”, in part, as an amount that was collected without having become collectible, deemed to have been collected, or became collectible by the person, as or on account of tax, under the NHTTRA during the reporting period and an amount of tax that became payable under the NHTTRA by the person during the reporting period in respect of a taxable sale. Additionally, section 63 of the NHTTRA provides that the Minister must consider and (re)assess any rebate application and where the Minister determines that a rebate is payable to a person, the Minister must pay the rebate to the person.
Subsection 6(1) of the New Housing Transition Tax and Rebate Regulation provides, in part, that subsection 296(2.1) of the ETA applies for the purposes of the NHTTRA. In general, subsection 296(2.1) of the ETA requires the Minister to apply unclaimed rebates against any outstanding liabilities under Part IX of the ETA, subject to the conditions in that provision even if the time limit for claiming the rebate has expired. Further, subsection 6(2) of that Regulation specifies that in applying subsection 296(2.1) of the ETA, references to a rebate are to be read as references to only a rebate under section 21 or 23 of the NHTTRA. As a result, the BCTTR that is payable under section 21 of the NHTTRA is an “allowable rebate” when applying subsection 296(2.1) of the ETA to an assessment of a remittance amount.
Please note that section 6 of that Regulation provides that sections 296(3), (3.1), and (4.1) also apply for purposes of the NHTTRA. As such, the restrictions on the application or payment of credits or rebates to subsequent reporting periods, and the limitation on refunding allowable rebates apply to the BCTTR as well.
If you require clarification with respect to any of the issues discussed in this memorandum, please call me directly at 306-203-3094. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Graham Leflar
Industry Sector Specialist
General Operations Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
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