CRA and the 2010 Olympic Games

CGA/CRA Liaison Meeting – July 8, 2008

Andrew Chan, Team Leader, 2010 Olympics Team, Vancouver TSOChristine Siu, Auditor, 2010 Olympics Team, Vancouver TSO

Agenda

• Background

• CRA Involvement

• Technical Issues and Actions

• Questions

Background

• Vancouver 2010 Winter Games are the third Olympic Games in Canada:

• February 12 – 28, 2010 (17 days)

• Vancouver 2010 Paralympic Winter Games will be the first winter Paralympic Games in Canada

• March 12 – 21, 2010 (10 days)

Economic Impact

GDP ($Billion)Employment (Person Yrs) Taxes ($Billion)

6.1 126,000 1.413

8.4 187,000 2.028

10.7 244,000 2.677

Source:

Available at:

Economic Impact of the 2010 Winter Olympic and Paralympic Games: An Update, InterVISTAS Consulting Inc., October 2002, p. 78

http://www.cse.gov.bc.ca/2010secretariat/2010/index.htm

Marketing Effort

Low

Med

High

Comparison of Hockey Attendance in February

0

100000

200000

300000

400000

500000

600000

700000

Giants Pacific Coliseum

Canucks GM Place

Olympics UBC & GM Place

45,000 74,000

650,000

Background

• A major international undertaking

• Partners, sponsors, supporters and suppliers

• All levels of government and First Nations

• Businesses, athletes, officials, volunteers, visitors, and media

VANOC - The Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games

Source: VANOC third quarter report for the 2007-08 fiscal year, June 20, 2008, p. 12-13

EXPENSES $2.2 billion

Sport, services and games operations $735M

Technology and Other $768M

Marketing & communications $126M

Venues $580M

REVENUE $2.2 billion

Domestic sponsorships $760M

Ticketing, licensing and merchandising $278M

Government and

Other $730M

IOC contributions $638M

Government Participation

• Government of Canada commitment - $656 million

• Province of B.C. commitment - $600 million

Government Participation

• Landmark multi-party agreement

• Provide essential government services and capital funding

• 2010 Olympic and Paralympic Winter Games Federal Secretariat

CRA Participation

• Committees & Working Groups

• CRA 2010 Website

• CRA 2010 Olympics Team

• Outreach

• Compliance

The CRA 2010 Olympics Team

• Single Point of Contact

• Committee representation

• Coordinate 2010 activities

• Research / Best Practices

• Perform audits

• Deliver outreach

Outreach

• Increase compliance through education

• Presentations to various stakeholders

• Vancouver Regional Construction Association

• NBC

• Province of BC

• Minister of National Revenue

• Beijing/X’ian Tax Officials

Compliance – Tax & GST Issues

• Sponsorships

• Underground Economy

• Provincial Income Allocation

• Increased Real Estate Activity

• Non-resident & International

• Accommodations

Hiring Non-Resident Employees

• Tax implication: A Ltd. is required to deduct CPP, EI, and Income Tax. The non-resident employee receives a T4 slip at the end of the taxation year and reports it on his income tax return filed in Canada.

A Ltd.

Employer

Construction worker (U.S.)

Employee

Regulation 105 Withholding Tax

• Tax implication: B Inc. is required to withhold and remit 15% of the gross payment per Regulation 105 of the Income Tax Act

• Non-resident would file a T1 to establish final tax liability

• Non-resident may apply for a Regulation 105 Waiver if applicableConsultant from Seattle

giving a seminar on Olympic recruitment to staff at B Inc.

Part XIII Withholding Tax

• Tax implication: The Toronto resident withholds Part XIII tax (25%) from the rental payments.

• This represents the non-resident’s final tax liability and he is not required to file an income tax return in Canada.

RENT

Australian resident owns Whistler condo

Toronto resident rents the condo during the Olympics

Non-Resident GST Issues

• A non-resident carrying on business in Canada who

• Is making taxable supplies in Canada, and• Is not a small supplier

Must register for GST/HST.

• Non-resident corporations may voluntarily register in certain situations

New Legislation 2007

• Three components• Waive non-resident withholding tax liability of the IOC

and the IPC

• Non-resident athletes and other non-resident individuals not to be taxed

• Cancel duties, excise, and GST on certain goods imported in connection with the Games

• Subsections 115(2.3), 212(17.1), and 153(1)

Accommodations IssueComparison of Rental Prices

RICHMOND Olympics Present

House $50,000 - $90,000 $3,500

Townhouse $44,250 $2,995

Condo $24,000 $1,900

VANCOUVER Olympics Present

Yaletown condo (2 b/r) $40,500 $2,250

Downtown condo (1 b/r) $18,000 $1,650

Comparison of Rental Prices

WEST VANCOUVER Olympics Present

House $102,000 N/A

Condo (2 b/r) $27,000 $1,600 - $1,975

WHISTLER Olympics Present

Whistler Village townhouse (4 b/r) $6,500/night $500/night

Blackcomb condo (2 b/r)

$1,350/night $200/night

CRA Websitehttp://www.cra-arc.gc.ca/2010games/