Excise Tax Act (R.S.C., 1985, c. E-15)

Marginal note:Definitions

• 141.02 (1) The definitions in this subsection apply in this section.

  adjusted tax credit amount

  adjusted tax credit amount means the amount determined, for a fiscal year of a person, by the formula

  A × 365/B

  where

  A

  is the tax credit amount of the person for the fiscal year; and

  B

  is the number of days in the fiscal year. (montant de crédit de taxe rajusté)

  adjusted total tax amount

  adjusted total tax amount means the amount determined, for a fiscal year of a person, by the formula

  A × 365/B

  where

  A

  is the total tax amount of the person for the fiscal year; and

  B

  is the number of days in the fiscal year. (montant total de taxe rajusté)

  business input

  business input means an excluded input, an exclusive input or a residual input. (intrant d’entreprise)

  direct attribution method

  direct attribution method means a method, conforming to criteria, rules, terms and conditions specified by the Minister, of determining in the most direct manner the operative extent and the procurative extent of property or a service. (méthode d’attribution directe)

  direct input

  direct input means property or a service, other than

  • (a) an excluded input;

  • (b) an exclusive input; or

  • (c) a non-attributable input. (intrant direct)

  excluded input

  excluded input of a person means

  • (a) property that is for use by the person as capital property;

  • (b) property or a service that is acquired, imported or brought into a participating province by the person for use as an improvement to property described in paragraph (a); or

  • (c) a prescribed property or service. (intrant exclu)

  exclusive input

  exclusive input of a person means property or a service (other than an excluded input) that is acquired, imported or brought into a participating province by the person for consumption or use directly and exclusively for the purpose of making taxable supplies for consideration or directly and exclusively for purposes other than making taxable supplies for consideration. (intrant exclusif)

  non-attributable input

  non-attributable input of a person means property or a service that is

  • (a) not an excluded input or an exclusive input of the person;

  • (b) acquired, imported or brought into a participating province by the person; and

  • (c) not attributable to the making of any particular supply by the person. (intrant non attribuable)

  operative extent

  operative extent of property or a service means, as the case may be, the extent to which the consumption or use of the property or service is for the purpose of making taxable supplies for consideration or the extent to which the consumption or use of the property or service is for purposes other than making taxable supplies for consideration. (mesure d’utilisation)

  procurative extent

  procurative extent of property or a service means, as the case may be, the extent to which the property or service is acquired, imported or brought into a participating province for the purpose of making taxable supplies for consideration or the extent to which the property or service is acquired, imported or brought into a participating province for purposes other than making taxable supplies for consideration. (mesure d’acquisition)

  qualifying institution

  qualifying institution for a particular fiscal year means a person that

  • (a) is a financial institution of a prescribed class throughout the particular fiscal year of the person; and

  • (b) has two fiscal years immediately preceding the particular fiscal year and, for each of those two fiscal years,

    • (i) the adjusted tax credit amount of the person equals or exceeds the prescribed amount for that prescribed class for the particular fiscal year, and

    • (ii) the tax credit rate of the person equals or exceeds the prescribed percentage for that prescribed class for the particular fiscal year. (institution admissible)

  requested information

  requested information means any information, additional information or document in respect of an application made by a person under subsection (18) that the Minister requests in writing from the person. (renseignement demandé)

  residual input

  residual input means a direct input or a non-attributable input. (intrant résiduel)

  residual input tax amount

  residual input tax amount of a person for a fiscal year means

  • (a) if the person is a selected listed financial institution at any time in the fiscal year, an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01 in respect of a supply or importation of a residual input that became payable by the person during the fiscal year without having been paid before the fiscal year or was paid by the person during the fiscal year without having become payable; and

  • (b) in any other case, an amount of tax in respect of a supply, importation or bringing into a participating province of a residual input that became payable by the person during the fiscal year without having been paid before the fiscal year or was paid by the person during the fiscal year without having become payable. (montant de taxe pour intrant résiduel)

  specified method

  specified method means a method, conforming to criteria, rules, terms and conditions specified by the Minister, of determining the operative extent and the procurative extent of property or a service. (méthode déterminée)

  tax credit amount

  tax credit amount of a person for a fiscal year of the person means

  • (a) if the person has made an election under subsection (9) in respect of the fiscal year, the total of all amounts each of which is an input tax credit for the fiscal year in respect of a residual input tax amount of the person for the fiscal year that the person would, in the absence of that subsection, be entitled to claim under this Part;

  • (b) if the person is a qualifying institution for the fiscal year, has not made an election under subsection (7) or (27) in respect of the fiscal year and has not received an authorization from the Minister to use for the fiscal year the particular methods set out in an application made under subsection (18), the total of all amounts each of which is an input tax credit for the fiscal year in respect of a residual input tax amount of the person for the fiscal year that the person would, if the person were not a qualifying institution for the fiscal year and did not make an election under subsection (9) in respect of the fiscal year, be entitled to claim under this Part; and

  • (c) in any other case, the total of all amounts each of which is an input tax credit for the fiscal year in respect of a residual input tax amount of the person for the fiscal year that the person is entitled to claim under this Part. (montant de crédit de taxe)

  tax credit rate

  tax credit rate of a person for a fiscal year of the person means the quotient, expressed as a percentage, determined by dividing the tax credit amount of the person for the fiscal year by the total tax amount of the person for the fiscal year. (taux de crédit de taxe)

  total tax amount

  total tax amount of a person for a fiscal year of the person means the total of all amounts each of which is a residual input tax amount of the person for the fiscal year. (montant total de taxe)

• Marginal note:Meaning of consideration

  (2) In this section, consideration does not include nominal consideration.

• Marginal note:Financial institution throughout a year

  (3) For the purposes of this section, a person is a financial institution of a prescribed class throughout a particular fiscal year of the person if the person is a financial institution of that class at any time in the particular fiscal year.

• Marginal note:Mergers and amalgamations

  (4) If two or more corporations (each of which is referred to in this subsection as a “predecessor”) are merged or amalgamated to form one corporation (in this subsection referred to as the “new corporation”), otherwise than as the result of the acquisition of property of one corporation by another corporation pursuant to the purchase of the property by the other corporation or as the result of the distribution of the property to the other corporation on the winding-up of the corporation, despite section 271 and for the purposes of determining the tax credit amount and the tax credit rate of the new corporation for a fiscal year of the new corporation, the following rules apply:

  • (a) the new corporation is deemed to have had two fiscal years, each of 365 days, immediately preceding the first fiscal year of the new corporation;

  • (b) the tax credit amount of the new corporation for the fiscal year of the new corporation (in this subsection referred to as the “prior year of the new corporation”) immediately preceding the first fiscal year of the new corporation is deemed to be equal to the total of all amounts each of which is the adjusted tax credit amount of a predecessor for the last fiscal year, if any, of the predecessor (in this subsection referred to as the “prior year of the predecessor”) ending before the time of the merger or amalgamation otherwise than as a result of the merger or amalgamation;

  • (c) the tax credit amount of the new corporation for the fiscal year of the new corporation (in this subsection referred to as the “second prior year of the new corporation”) immediately preceding the prior year of the new corporation is deemed to be equal to the total of all amounts each of which is the adjusted tax credit amount of a predecessor for the fiscal year, if any, of the predecessor (in this subsection referred to as the “second prior year of the predecessor”) immediately preceding the prior year of the predecessor;

  • (d) the total tax amount of the new corporation for the prior year of the new corporation is deemed to be the total of all amounts, each of which is the adjusted total tax amount of a predecessor for the prior year of the predecessor, if any; and

  • (e) the total tax amount of the new corporation for the second prior year of the new corporation is deemed to be the total of all amounts, each of which is the adjusted total tax amount of a predecessor for the second prior year of the predecessor, if any.

• Marginal note:Winding-up

  (5) If at any time a particular corporation is wound up and not less than 90% of the issued shares of each class of the capital stock of the particular corporation were, immediately before that time, owned by another corporation, despite section 272 and for the purposes of determining the tax credit amount and the tax credit rate of the other corporation for a fiscal year of the other corporation, the following rules apply:

  • (a) the tax credit amount of the other corporation for the fiscal year of the other corporation (in this subsection referred to as the “specified year of the other corporation”) that includes the day on which the particular corporation is wound up is deemed to be equal to the total of

    • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted tax credit amount of the other corporation for the specified year of the other corporation, and

    • (ii) the amount that is the adjusted tax credit amount of the particular corporation for the last fiscal year, if any, of the particular corporation (in this subsection referred to as the “prior year of the particular corporation”) ending before the day on which the particular corporation is wound up;

  • (b) the tax credit amount of the other corporation for the fiscal year, if any, of the other corporation (in this subsection referred to as the “prior year of the other corporation”) immediately preceding the specified year of the other corporation is deemed to be equal to the total of

    • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted tax credit amount of the other corporation for the prior year of the other corporation, and

    • (ii) the amount that is the adjusted tax credit amount of the particular corporation for the fiscal year, if any, of the particular corporation (in this subsection referred to as the “second prior year of the particular corporation”) immediately preceding the prior year of the particular corporation;

  • (c) the total tax amount of the other corporation for the specified year of the other corporation is deemed to be the total of

    • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted total tax amount of the other corporation for the specified year of the other corporation, and

    • (ii) the amount that is the adjusted total tax amount of the particular corporation for the prior year of the particular corporation, if any; and

  • (d) the total tax amount of the other corporation for the prior year of the other corporation, if any, is deemed to be the total of

    • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted total tax amount of the other corporation for the prior year of the other corporation, and

    • (ii) the amount that is the adjusted total tax amount of the particular corporation for the second prior year of the particular corporation, if any.

• Marginal note:Allocation of exclusive inputs

  (6) For the purposes of this Part, the following rules apply in respect of any exclusive input of a financial institution:

  • (a) if the exclusive input is acquired, imported or brought into a participating province for consumption or use directly and exclusively for the purpose of making taxable supplies for consideration, the financial institution is deemed to have acquired, imported or brought into the participating province the exclusive input for consumption or use exclusively in the course of commercial activities of the financial institution; and

  • (b) if the exclusive input is acquired, imported or brought into a participating province for consumption or use directly and exclusively for purposes other than making taxable supplies for consideration, the financial institution is deemed to have acquired, imported or brought into the participating province the exclusive input for consumption or use exclusively otherwise than in the course of commercial activities of the financial institution.

• Marginal note:Residual inputs — election for transitional year

  (7) If a person is a qualifying institution for the first fiscal year of the person that begins after March 2007, the Minister has assessed the net tax of the person for any reporting period included in any of the four fiscal years immediately preceding that first fiscal year, the notice of assessment, subsequent assessment or reassessment in respect of the reporting period does not reflect any inappropriateness in respect of the methods used by the person for the purpose of determining input tax credits in respect of residual inputs of the person and those methods would be fair and reasonable if used in the same manner by the person in that first fiscal year for the purposes of determining the operative extent and the procurative extent of all residual inputs of the person, the person may elect to use those methods in that same manner for that first fiscal year to determine, for the purposes of this Part, the operative extent and the procurative extent of all residual inputs of the person.

• Marginal note:Residual inputs — prescribed extent of use

  (8) For the purposes of this Part, if a financial institution is a qualifying institution for a fiscal year of the financial institution and has not made an election under subsection (7) for the fiscal year, the following rules apply for the fiscal year in respect of each residual input of the financial institution:

  • (a) the extent to which the consumption or use of the residual input is for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class of the financial institution;

  • (b) the extent to which the consumption or use of the residual input is for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class of the financial institution;

  • (c) the extent to which the residual input is acquired, imported or brought into a participating province by the qualifying institution for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class of the financial institution;

  • (d) the extent to which the residual input is acquired, imported or brought into a participating province by the qualifying institution for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class of the financial institution; and

  • (e) for the purpose of determining an input tax credit in respect of the residual input, the description of B in the formula in subsection 169(1) is deemed to be equal to the prescribed percentage for the prescribed class of the financial institution.

• Marginal note:Residual inputs — elected extent of use

  (9) For the purposes of this Part, if a person is a financial institution (other than a qualifying institution) of a prescribed class throughout a particular fiscal year of the person and the tax credit rate of the person for each of the two fiscal years immediately preceding the particular fiscal year equals or exceeds the prescribed percentage for the prescribed class of financial institutions of the person for the particular fiscal year, the person may elect to have the following rules apply for the particular fiscal year in respect of each residual input of the person:

  • (a) the extent to which the consumption or use of the residual input is for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class;

  • (b) the extent to which the consumption or use of the residual input is for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class;

  • (c) the extent to which the residual input is acquired, imported or brought into a participating province by the person for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class;

  • (d) the extent to which the residual input is acquired, imported or brought into a participating province by the person for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class; and

  • (e) for the purpose of determining an input tax credit in respect of the residual input, the description of B in the formula in subsection 169(1) is deemed to be equal to the prescribed percentage for the prescribed class.

• Marginal note:Non-attributable inputs — specified method

  (10) For the purposes of this Part, if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution, the financial institution shall use a specified method to determine for the fiscal year the operative extent and the procurative extent of each non-attributable input of the financial institution.

• Marginal note:Non-attributable inputs — exception

  (11) For the purposes of this Part, despite subsection (10), if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution and no specified method applies during the fiscal year to a particular non-attributable input of the financial institution, the financial institution shall use another attribution method to determine for the fiscal year the operative extent and the procurative extent of the particular non-attributable input.

• Marginal note:Direct inputs — direct attribution method

  (12) For the purposes of this Part, if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution, the financial institution shall use a direct attribution method to determine for the fiscal year the operative extent and the procurative extent of each direct input of the financial institution.

• Marginal note:Direct inputs — exception

  (13) For the purposes of this Part, despite subsection (12), if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution and no direct attribution method applies during the fiscal year to a particular direct input of the financial institution, the financial institution shall use another attribution method to determine in the most direct manner for the fiscal year the operative extent and the procurative extent of the particular direct input.

• Marginal note:Excluded inputs — specified method

  (14) For the purposes of this Part, a financial institution shall use a specified method to determine for a fiscal year of the financial institution the operative extent and the procurative extent of each excluded input of the financial institution.

• Marginal note:Excluded inputs — exception

  (15) For the purposes of this Part, despite subsection (14), if no specified method applies during a fiscal year of a financial institution to a particular excluded input of the financial institution, the financial institution shall use another attribution method to determine for the fiscal year the operative extent and the procurative extent of the particular excluded input.

• Marginal note:Attribution method — conditions

  (16) Any method that a financial institution is required in accordance with any of subsections (10) to (15) to use in respect of a fiscal year of the financial institution shall be

  • (a) fair and reasonable;

  • (b) used consistently by the financial institution throughout the fiscal year; and

  • (c) subject to subsection (17), determined by the financial institution no later than the day on or before which the financial institution is required to file a return under Division V with the Minister for the first reporting period in the fiscal year.

• Marginal note:Alteration or substitution of method

  (17) Any method used by a financial institution under any of subsections (10) to (15) in respect of a fiscal year of the financial institution shall not, after the day on or before which the financial institution is required to file a return under Division V with the Minister for the first reporting period in the fiscal year, be altered or be substituted with another method by the financial institution for the fiscal year without the written consent of the Minister.

• Marginal note:Application for pre-approved method

  (18) A person that is, or is reasonably expected to be, a qualifying institution for a fiscal year may apply to the Minister to use particular methods to determine for the fiscal year the operative extent and the procurative extent of each business input of the person.

• Marginal note:Form and manner of application

  (19) An application made by a person under subsection (18) shall

  • (a) be made in prescribed form containing prescribed information, including the particular method to be used in respect of each direct input, excluded input, exclusive input and non-attributable input of the person; and

  • (b) be filed by the person with the Minister in prescribed manner on or before

    • (i) the day that is 180 days before the first day of the fiscal year to which the application applies, or

    • (ii) any later day that the Minister may allow on application by the person.

• Marginal note:Authorization

  (20) On receipt of an application made under subsection (18), the Minister shall

  • (a) consider the application and authorize or deny the use of the particular methods; and

  • (b) notify the person in writing of the decision on or before

    • (i) the later of

      • (A) the day that is 180 days after that receipt, and

      • (B) the day that is 180 days before the first day of the fiscal year to which the application applies, or

    • (ii) any later day that the Minister may specify, if the day is set out in a written application filed by the person with the Minister.

• Marginal note:Effect of authorization

  (21) For the purposes of this Part, if the Minister under subsection (20) authorizes the use of particular methods for a fiscal year of the person,

  • (a) the particular methods shall be used consistently, and as indicated in the application, by the person throughout the fiscal year to determine the operative extent and the procurative extent of each business input of the person; and

  • (b) subsections (6) to (15) and (27) do not apply, for the fiscal year, in respect of any business input of the person.

• Marginal note:Reasons for denial

  (22) If the Minister denies under subsection (20) the use of the particular methods specified in an application made under subsection (18) and the person has, in respect of the application, complied with the requirements set out in subsection (19) and provided to the Minister all requested information within any reasonable time set out in the written notice requesting the information, the Minister shall notify the person in writing of the reasons for not authorizing the use of the particular methods on or before the particular day that is the later of

  • (a) the day that is 60 days after the day the person last provided any requested information to the Minister; and

  • (b) the day on or before which the notification of the decision is required to be given to the person under subsection (20).

• Marginal note:Revocation

  (23) An authorization granted under subsection (20) to a person in respect of a fiscal year of the person ceases to have effect on the first day of the fiscal year and, for the purposes of this Part, is deemed never to have been granted, if

  • (a) the Minister revokes the authorization and sends a notice of revocation to the person on or before the day that is 60 days before the day that is the first day of the fiscal year;

  • (b) the person files in prescribed manner with the Minister a notice of revocation in prescribed form containing prescribed information on or before the day that is 60 days before the first day of the fiscal year; or

  • (c) the person is not a qualifying institution for the fiscal year.

• Marginal note:Application to be designated a qualifying institution

  (24) A person may apply to the Minister, in prescribed form containing prescribed information, to be designated as a qualifying institution for a particular fiscal year of the person if

  • (a) the person is, or is reasonably expected to be, a financial institution of a prescribed class throughout the particular fiscal year; and

  • (b) it is the case that

    • (i) the person has two fiscal years immediately preceding the particular fiscal year and, for each of those two fiscal years, the adjusted tax credit amount of the person equals or exceeds, or is reasonably expected to equal or exceed, the prescribed amount for that class for the particular fiscal year, or

    • (ii) an authorization under subsection (20) for the particular fiscal year has ceased to have effect only because of the application of paragraph (23)(c).

• Marginal note:Effect of approval

  (25) On receipt of the application made under subsection (24) in respect of a fiscal year of a person, the Minister shall, with all due dispatch, consider the application and notify the person in writing of the decision and, if the Minister makes the designation, the person is deemed for the purposes of subsection (18) and paragraph (23)(c) to be a qualifying institution for the fiscal year.

• Marginal note:Revocation of designation as a qualifying institution

  (26) A designation made under subsection (25) in respect of a fiscal year of a person ceases to have effect on the first day of the fiscal year and is deemed, for the purposes of this Part, to have never been granted if, on or before the day that is 60 days before the first day of the fiscal year

  • (a) the Minister revokes the designation and sends a notice of revocation to the person; or

  • (b) the person files in prescribed manner with the Minister a notice of revocation of the designation in prescribed form containing prescribed information.

• Marginal note:Qualifying institution’s own methods

  (27) Despite subsections (6), (8), (14) and (15), a qualifying institution for a fiscal year may elect to use particular methods for the fiscal year to determine, for the purposes of this Part, the operative extent and the procurative extent of every business input of the qualifying institution, if

  • (a) the particular methods were specified in an application filed under subsection (18) by the qualifying institution for the fiscal year that

    • (i) complies with the requirements set out in subsection (19), and

    • (ii) is the last such application filed by the qualifying institution for the fiscal year;

  • (b) the use of the particular methods was not authorized by the Minister under paragraph (20)(a);

  • (c) the qualifying institution has provided all requested information within the time set out in the written notice requesting the information;

  • (d) the Minister has not complied with the notification requirements set out in paragraph (20)(b) and subsection (22) in respect of the application; and

  • (e) if the Minister has provided modifications in writing to the particular methods on or before the particular day described in subsection (22), the particular methods with those modifications (in this section referred to as the “modified methods”) are not fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the qualifying institution for the fiscal year.

• Marginal note:Elected method — conditions

  (28) If a qualifying institution makes an election under subsection (27), the particular methods shall be

  • (a) fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the qualifying institution for the fiscal year; and

  • (b) used consistently, and as indicated in the application referred to in paragraph (27)(a), by the qualifying institution throughout the fiscal year.

• Marginal note:Making of election

  (29) An election under subsection (7), (9) or (27) in respect of a fiscal year of a person shall be

  • (a) made in prescribed form containing prescribed information; and

  • (b) filed by the person with the Minister in prescribed manner on or before the day that is

    • (i) the day on or before which a return under Division V for the first reporting period of the fiscal year is required to be filed, or

    • (ii) any later day that the Minister may allow on application by the person.

• Marginal note:Revocation of election

  (30) An election under subsection (7), (9) or (27) in respect of a fiscal year of a person ceases to have effect on the first day of the fiscal year and is deemed, for the purposes of this Part, never to have been made if

  • (a) a notice of revocation of the election in prescribed form containing prescribed information is filed in prescribed manner with the Minister on or before the day on or before which the return under Division V is required to be filed for the first reporting period of the fiscal year;

  • (b) in the case of an election under subsection (7) to use methods for the fiscal year to determine, for the purposes of this Part, the operative extent and the procurative extent of all residual inputs of the person,

    • (i) the person is not a qualifying institution for the fiscal year, or

    • (ii) the methods are

      • (A) not fair and reasonable for the purpose of determining the operative extent and the procurative extent of those residual inputs, or

      • (B) not used consistently by the financial institution throughout the fiscal year;

  • (c) in the case of an election made under subsection (9),

    • (i) the person is not a financial institution of a prescribed class throughout the fiscal year, or

    • (ii) the tax credit rate of the person for each of the two fiscal years immediately preceding the fiscal year does not equal or exceed the prescribed percentage for the prescribed class of financial institutions of the person for the fiscal year; or

  • (d) in the case of an election made under subsection (27),

    • (i) any of the requirements to make the election that are set out in that subsection is not met, or

    • (ii) the particular methods referred to in that subsection are

      • (A) not fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the qualifying institution for the fiscal year, or

      • (B) not used consistently, or as indicated in the application referred to in paragraph (27)(a), by the financial institution throughout the fiscal year.

• Marginal note:Burden of proof

  (31) If a financial institution appeals an assessment under this Part for a reporting period in a fiscal year of the financial institution in respect of an issue relating to the determination, under any of subsections (7), (10) to (15), (21) and (27), of the operative extent or the procurative extent of a business input, the financial institution must establish on a balance of probabilities in any court proceeding relating to the assessment that

  • (a) in the case of the determination, under subsection (7), of the operative extent or the procurative extent of the business input, the methods used by the financial institution to determine the operative extent and the procurative extent of all residual inputs of the financial institution for the fiscal year were

    • (i) fair and reasonable, and

    • (ii) used consistently by the financial institution throughout the fiscal year;

  • (b) in the case of the determination, under subsection (10) or (14), of the operative extent or the procurative extent of the business input, the financial institution used a specified method consistently throughout the fiscal year to determine that extent;

  • (c) in the case of the determination, under subsection (11) or (15), of the operative extent or the procurative extent of the business input, no specified method applied to the business input and the other attribution method used by the financial institution to determine that extent was fair and reasonable and used consistently by the financial institution throughout the fiscal year;

  • (d) in the case of the determination, under subsection (12), of the operative extent or the procurative extent of the business input, the financial institution used a direct attribution method consistently throughout the fiscal year to determine that extent;

  • (e) in the case of the determination, under subsection (13), of the operative extent or the procurative extent of the business input, no direct attribution method applied to the business input and the other attribution method used by the financial institution to determine that extent was fair and reasonable and used consistently by the financial institution throughout the fiscal year;

  • (f) in the case of the determination, under subsection (21), of the operative extent or the procurative extent of the business input, the particular methods referred to in that subsection were used consistently, and as indicated in the application referred to in that subsection, throughout the fiscal year; and

  • (g) in the case of the determination, under subsection (27), of the operative extent or the procurative extent of the business input,

    • (i) the methods specified by the financial institution in the application referred to in that subsection were

      • (A) fair and reasonable, and

      • (B) used consistently, and as indicated in the application referred to in paragraph (27)(a), by the financial institution throughout the fiscal year, and

    • (ii) if the Minister has provided modifications to those methods as described in paragraph (27)(e), the modified methods are not fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the financial institution for the fiscal year.

• Marginal note:Ministerial direction

  (32) If a financial institution is required to use a method (in this subsection referred to as the “previous method”) in accordance with any of subsections (10) to (15) in respect of a fiscal year of the financial institution, the Minister may at any time, by notice in writing, direct the financial institution to use, for the purposes of determining for the fiscal year, and any subsequent fiscal year, the operative extent and the procurative extent of each business input referred to in that subsection, another method that is fair and reasonable and, if the Minister so directs, the other method, and not the previous method, shall apply for those purposes.

• Marginal note:Method directed by the Minister — appeals

  (33) If under subsection (32) the Minister directs a financial institution to use a method in respect of a business input for a fiscal year, the Minister assesses the net tax of the financial institution for a reporting period included in the fiscal year and the financial institution appeals the assessment under this Part in respect of an issue relating to the application of that subsection,

  • (a) the Minister shall establish on a balance of probabilities that the method is fair and reasonable; and

  • (b) if the final determination of the courts is that the method is not fair and reasonable, the Minister shall not direct the financial institution under subsection (32) to use another method for the fiscal year in respect of the business input.