Good afternoon. My name is Pierre Mercille. I am the senior legislative chief of the Department of Finance Sales Tax Division.
As you said, part 2 of the bill deals with the goods and services tax, or GST, and the harmonized sales tax, or HST. Part 2 starts at clause 89 and ends at clause 99.
There are four GST/HST measures in this bill.
The first measure provides a GST/HST relief for exported call centre services. More specifically, the relief will apply to supply of a service of rendering technical or customer supports to individuals by means of telecommunication. We understand “by means of telecommunication” as by telephone, by email, by webchat. The relief will apply if the service is supplied to a non-resident who is not a consumer of the service and if the person is not registered for GST/HST purposes. The amendment will allow Canadian call centres to compete more effectively with call centres located outside Canada.
The next measure is fairly technical, and it deals with the “closely related” test under the GST/HST.
Under the GST/HST, there are special relieving rules that allow members of a closely related group of corporations or partnership to neither charge nor collect GST on intercompany supplies. To qualify, each member of this group must be considered to be closely related to each other member of the group by having a degree of common ownership of at least 90%. The amendment in this part will require that in order to meet the closely related test in the future, in addition to having that degree of common ownership of 90%, a corporation or partnership must also hold and control 90% or more of the votes in respect of every corporate matter of the subsidiary corporation.
The next amendments are consequential to the repeal, effective January 1, 2017, of the eligible capital property regime. That was explained earlier because these amendments to the Income Tax Act are included in part one. Because some provisions of the GST/HST refer to those amended provisions in the Income Tax Act that are being amended, the amendments are made to ensure that the application of the GST/HST in this area is not affected. Essentially, these amendments ensure that there's no change for GST/HST.
The last measure in part 2 of this bill is an administrative measure. It clarifies that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided that the total amount of the assessment does not increase. This measure is similar to a measure that is included in part 1 of the Income Tax Act because it originated in the Income Tax Act, and it's made under the GST legislation to ensure greater consistency across administrative provisions throughout the tax act, the federal tax statutes.
I will take just a few seconds here just to say that this last measure that I explained, the administrative measure, is the only amendment that is included in part 3 of this bill. Part 3 includes amendments to the Excise Act 2001. That's a different piece of legislation that deals with excise tax on alcohol and tobacco. Again, this amendment is made to ensure greater consistency in administrative provisions across federal tax statutes.
That concludes my presentation.
Thank you.