Budget Implementation Act, 2006 (S.C. 2006, c. 4)
Full Document:
Assented to 2006-06-22
Marginal note:1997, c. 10, s. 226(1)
30. (1) The portion of subsection 257(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Non-registrant sale of real property
257. (1) If a person who is not a registrant makes a particular taxable supply of real property by way of sale, the Minister shall, subject to subsections (1.1) and (2), pay a rebate to the person equal to the lesser of
(2) Section 257 of the Act is amended by adding the following after subsection (1):
Marginal note:Limitation
(1.1) If the particular taxable supply referred to in subsection (1) is made at a particular time by a public sector body to another person with whom the public sector body is not dealing at arm’s length, the rebate under subsection (1) shall not exceed the lesser of
(a) the basic tax content of the property at the particular time, and
(b) the amount determined by the formula
(A/B) × C
where
- A
- is the basic tax content of the property at the particular time,
- B
- is the amount that would be the basic tax content of the property at that time if that amount were determined without reference to the description of B in paragraph (a) and the description of K in paragraph (b) of the definition “basic tax content” in subsection 123(1), and
- C
- is the tax that is or would, in the absence of section 167, be payable in respect of the particular taxable supply.
(3) Subsections (1) and (2) apply to a supply in respect of which tax becomes payable or would have become payable, in the absence of section 167 of the Act, on or after July 1, 2006.
Marginal note:1997, c. 10, s. 227(1)
31. (1) Subparagraph (a)(ii) of the definition “non-creditable tax charged” in subsection 259(1) of the Act is replaced by the following:
(ii) tax deemed under subsection 129(6), 129.1(4), 171(3) or 183(4) or section 191 to have been collected during the period by the person in respect of the property or service,
(2) Subsection (1) applies to tax deemed to have been collected on or after May 2, 2006.
32. (1) The Act is amended by adding the following after section 274:
Marginal note:Rate change — variation of agreement
274.1 If
(a) at any time before July 1, 2006, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,
(b) the supplier and the recipient at a later time either directly or indirectly
(i) vary or alter the agreement for the supply, or
(ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),
(c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,
(d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 7% on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,
(e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 6% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 7%, and
(f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,
the following rule applies
(g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate of 7% on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.
Marginal note:Definitions
274.2 (1) The following definitions apply in this section.
“person”
« personne »
“person” does not include a consumer.
“rate change”
« modification de taux »
“rate change” means any change in any rate of tax imposed under this Part.
“tax benefit”
« avantage fiscal »
“tax benefit” means a reduction, an avoidance or a deferral of tax or other amount payable under this Part or an increase in a refund or rebate of tax or other amount under this Part.
“transaction”
« opération »
“transaction” has the meaning assigned by subsection 274(1).
Marginal note:Rate change — transactions
(2) If
(a) a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made,
(b) the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and
(c) it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from a rate change, for one or more of the persons involved in the transaction or series of transactions,
the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under this Part, or any other amount that is relevant for the purposes of computing that amount shall be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons.
Marginal note:Denying tax benefit on transactions
(3) Despite any other provision of this Part, a tax benefit shall only be denied under subsection (2) through an assessment, reassessment or additional assessment.
Marginal note:Request for adjustments
(4) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) shall be entitled, within one hundred and eighty days after the day on which the notice was mailed, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.
Marginal note:Duties of Minister
(5) On receipt of a request by a person under subsection (4), the Minister shall, with all due dispatch, consider the request and, despite subsections 298(1) and (2), assess, reassess or make an additional assessment with respect to the person, except that an assessment, a reassessment or an additional assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4).
(2) Section 274.1 of the Act, as enacted by subsection (1), applies to any agreement varied, altered, terminated or entered into on or after May 2, 2006.
(3) Section 274.2 of the Act, as enacted by subsection (1), applies to any transaction made on or after May 2, 2006.
Related Amendments
2002, c. 9, s. 5Air Travellers Security Charge Act
Marginal note:2005, c. 30, s. 20(1)
33. (1) The portion of paragraph 12(1)(a) of the Air Travellers Security Charge Act before subparagraph (i) is replaced by the following:
(a) $4.67 for each chargeable emplanement included in the service, to a maximum of $9.34, if
Marginal note:2005, c. 30, s. 20(2)
(2) The portion of paragraph 12(1)(b) of the Act before subparagraph (i) is replaced by the following:
(b) $4.95 for each chargeable emplanement included in the service, to a maximum of $9.90, if
Marginal note:2005, c. 30, s. 20(4)
(3) The portion of paragraph 12(1)(d) of the Act before subparagraph (i) is replaced by the following:
(d) $8.42 for each chargeable emplanement included in the service, to a maximum of $16.84, if
Marginal note:2005, c. 30, s. 20(7)
(4) The portion of paragraph 12(2)(b) of the Act before subparagraph (i) is replaced by the following:
(b) $8.42 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $16.84, if
(5) Subsections (1) to (4) apply in respect of any air transportation service that includes a chargeable emplanement on or after July 1, 2006 and for which any consideration is paid or becomes payable on or after that day.
Amendments Relating to the Taxation of Tobacco Products
2002, c. 22Excise Act, 2001
34. (1) The Excise Act, 2001 is amended by adding the following after section 58:
PART 3.1TOBACCO PRODUCTS INVENTORY TAX
Marginal note:Definitions
58.1 The following definitions apply in this Part.
“loose tobacco”
« tabac à cigarettes »
“loose tobacco” means loose, fine-cut manufactured tobacco for use in making cigarettes.
“separate retail establishment”
« établissement de détail distinct »
“separate retail establishment” of a person means a shop or store of the person
(a) that is geographically separate from other places of business of the person;
(b) at which, in the ordinary course of the person’s business, the person regularly sells, otherwise than through vending machines, tobacco products to consumers, within the meaning of section 123 of the Excise Tax Act, attending at the shop or store; and
(c) in respect of which separate records are maintained.
“taxed tobacco”
« tabac imposé »
“taxed tobacco” of a person means cigarettes, tobacco sticks, loose tobacco and cigars, in respect of which duty has been imposed under section 42 before July 1, 2006 at a rate set out in paragraph 1(b), 2(b) or 3(b) of Schedule 1 or in section 4 of that Schedule, as those provisions read on June 30, 2006, and that, at the beginning of July 1, 2006,
(a) were owned by that person for sale in the ordinary course of a business of the person;
(b) were not held in a vending machine; and
(c) were not relieved from that duty under this Act.
“unit”
« unité »
“unit” means one cigarette, tobacco stick, gram of loose tobacco or cigar.
Marginal note:Imposition of tax
58.2 Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed tobacco of the person at the rate of
(a) 0.2799 cent per cigarette;
(b) 0.2517 cent per tobacco stick;
(c) 0.1919 cent per gram of loose tobacco; and
(d) 0.1814 cent per cigar.
Marginal note:Exemption for small retail inventory
58.3 Tax under this Part in respect of the inventory of all taxed tobacco of a person that is held at the beginning of July 1, 2006 at a separate retail establishment of the person is not payable if that retail establishment holds inventory of 30,000 or fewer units.
Marginal note:Taking of inventory
58.4 Every person liable to pay tax under this Part shall, for the purposes of this Part, determine that person’s inventory of all taxed tobacco.
Marginal note:Returns
58.5 (1) Every person liable to pay tax under this Part shall, on or before August 31, 2006, file a return with the Minister in the prescribed form and manner.
Marginal note:Separate returns
(2) A person authorized under subsection 239(2) of the Excise Tax Act to file separate returns in respect of a separate branch or division may file separate returns under this Part in respect of that branch or division.
Marginal note:Payment
58.6 (1) Every person shall pay to the Receiver General the total tax payable by the person under this Part on or before August 31, 2006.
Marginal note:Minimum interest
(2) No interest in respect of an amount payable by a person under this Part is payable if, at the time the person pays the amount, the total of that interest otherwise payable is less than $25.
Marginal note:Extension
(3) The Minister may at any time extend in writing the time for filing a return, or paying the tax payable, under this Part and, where the Minister so extends the time,
(a) the return shall be filed or tax payable shall be paid within the time as so extended; and
(b) interest is payable under section 170 as if the time had not been extended.
(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2006.
- Date modified: