Draft Amendments to Various GST/HST Regulations
GST/HST and Investment Limited Partnerships
Financial Services and Financial Institutions (GST/HST) Regulations
1 The Financial Services and Financial Institutions (GST/HST) Regulations are amended by adding the following after section 4:
Prescribed Member for Subsection 132(6) of the Act
4.1 For the purposes of subsection 132(6) of the Act, the following members of an investment limited partnership are prescribed members:
(a) a member that is a non-resident trust if the total value of the assets of the member in which one or more persons resident in Canada have a beneficial interest is more than 5% of the total value of the assets of the member; and
(b) a member that is a non-resident limited partnership if the total value of all interests in the member held by persons resident in Canada is more than 5% of the total value of all interests in the member.
2 Section 1 is deemed to have come into force on September 8, 2017.
Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations
3 (1) The definition distributed investment plan in subsection 1(1) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations is amended by striking out "or" at the end of paragraph (g), by adding "or" at the end of paragraph (h) and by adding the following after paragraph (h):
(i) an investment limited partnership. (régime de placement par répartition)
(2) The definition permanent establishment in subsection 1(1) of the Regulations is amended by adding "and" at the end of paragraph (b) and by replacing paragraphs (c) and (d) by the following:
(c) in the case of a partnership that is not an investment plan,
(i) if all the members of the partnership are individuals or trusts, any permanent establishment that would be a permanent establishment of the partnership under subsection 2600(2) of the Income Tax Regulations if the partnership were an individual, and
(ii) if subparagraph (i) does not apply, any permanent establishment that would be a permanent establishment of the partnership under subsection 400(2) of the Income Tax Regulations if the partnership were a corporation. (établissement stable)
(3) The portion of paragraph (b) of the definition provincial series in subsection 1(1) of the Regulations before subparagraph (i) is replaced by the following:
(b) under the terms of the prospectus, registration statement, partnership agreement or other similar document for the series, or under the laws of Canada or a province, the conditions for a person owning or acquiring units of the series include the following:
(4) The definition series in subsection 1(1) of the Regulations is amended by striking out "and" at the end of paragraph (a), by adding "and" at the end of paragraph (b) and by adding the following after paragraph (b):
(c) in respect of a partnership, a class of units of the partnership. (série)
(5) The definition unit in subsection 1(1) of the Regulations is amended by striking out "and" at the end of paragraph (d) and by adding the following after that paragraph:
(d.1) in respect of a partnership, an interest of a person in the partnership;
(d.2) in respect of a series of a partnership, a unit of the partnership of that series; and
4 The portion of section 2 of the Regulations before paragraph (a) is replaced by the following:
Meaning of qualifying partnership
2 For the purposes of these Regulations, a partnership that is not an investment plan is a qualifying partnership during a taxation year of the partnership if, at any time in the taxation year, the partnership has
5 The portion of paragraph 11(b) of the Regulations before subparagraph (i) is replaced by the following:
(b) under the terms of the prospectus, registration statement, partnership agreement or other similar document for the financial institution, or under the laws of Canada or a province, the conditions for a person owning or acquiring units of the financial institution include
6 (1) The portion of the definition plan merger in subsection 16(1) of the Regulations before paragraph (a) is replaced by the following:
plan merger means the merger or combination of two or more trusts, corporations or partnerships, each of which was, immediately before the merger or combination, a distributed investment plan and each of which is referred to in this definition as a "predecessor", to form one trust, corporation or partnership (referred to in this definition as the "continuing plan") in such a manner that
(2) Paragraph (c) of the definition plan merger in subsection 16(1) of the Regulations is replaced by the following:
(c) the merger or combination is otherwise than as a result of the acquisition of property of a particular trust, corporation or partnership by another trust, corporation or partnership, pursuant to the purchase of that property by the other trust, corporation or partnership or as a result of the distribution of that property to the other trust, corporation or partnership on the winding-up of the particular trust, corporation or partnership. (fusion de régimes)
7 The Regulations are amended by adding the following after section 72:
Transitional Rules for Investment Limited Partnerships
Investment limited partnerships — 2019
73 (1) A particular investment limited partnership to which subparagraph 149(1)(a)(ix) of the Act does not apply is deemed to be an investment plan that is a distributed investment plan for the following purposes:
(a) the purposes of determining under any of sections 30 and 32 to 34 the percentage for a participating province and for a particular period (as defined in subsection 16(1)) of a selected listed financial institution or of another investment limited partnership described in subsection (2), but only if the percentage is to be used in the determination of
(i) the positive amount that the financial institution or other investment limited partnership is required to add, or the negative amount that the financial institution or other investment limited partnership is able to deduct, in determining its net tax under subsection 225.2(2) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the financial institution or other investment limited partnership that begins in 2019,
(ii) the instalment base under subsection 237(2) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, of the financial institution or other investment limited partnership for a reporting period in a fiscal year of the financial institution or other investment limited partnership that begins in 2019,
(iii) the interim net tax under subsection 228(2.1) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the financial institution or other investment limited partnership that begins in 2019, or
(iv) if a joint election made under section 55 by the financial institution or other investment limited partnership and the manager of the financial institution or other investment limited partnership is in effect at any time in a fiscal year of the manager that begins in 2019,
(A) an amount that, under paragraph 55(2)(c), is a prescribed amount for the purposes of the description of G in subsection 225.2(2) of the Act for a reporting period in the fiscal year, or
(B) the positive amount that the manager is required to add, or the negative amount that the manager is able to deduct, in determining its net tax under subsection 225.2(2) of the Act, having regard to the adaptations made to that subsection under paragraph 55(2)(d), for a reporting period in the fiscal year;
(b) the purposes of determining under section 28 an investor percentage of the particular investment limited partnership as of a day in 2018; and
(c) the purposes of applying section 52 to the particular investment limited partnership in respect of any information that is requested under that section by a selected listed financial institution or by another investment limited partnership described in subsection (2), but only if the information is required for
(i) the determination of a percentage referred to in paragraph (a) of the financial institution or other investment limited partnership that is to be used in the determination of an amount described in any of subparagraphs (a)(i) to (iv), or
(ii) the determination under section 28 of an investor percentage of the financial institution or other investment limited partnership as of a day in 2018.
Investment limited partnerships — 2019
(2) If an investment limited partnership is a selected listed financial institution throughout the reporting period of the investment limited partnership that includes January 1, 2019 and is not a selected listed financial institution throughout the preceding reporting period of the investment limited partnership,
(a) for the purposes of determining under section 28 an investor percentage of the investment limited partnership as of a day in 2018, the investment limited partnership is deemed to be a selected listed financial institution; and
(b) for the purposes of section 52, the investment limited partnership is deemed to be
(i) if the units of the investment limited partnership are issued in two or more series, a selected stratified investment plan throughout 2018, or
(ii) in any other case, a selected non-stratified investment plan throughout 2018.
8 Subsection 3(1) applies in respect of
(a) any reporting period of a person that begins after 2018; and
(b) any reporting period of a person that begins in 2018 if the person is a listed financial institution throughout the reporting period of the person that includes January 1, 2018.
9 Subsections 3(2) to (5) and sections 4 to 7 are deemed to have come into force on September 8, 2017.
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