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

Full Document:  

Act current to 2024-02-20 and last amended on 2024-01-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION VIIMiscellaneous (continued)

SUBDIVISION ATrustees, Receivers and Personal Representatives (continued)

Marginal note:Inter vivos trust

 For the purposes of this Part, where a person settles property on an inter vivos trust,

  • (a) the person is deemed to have made and the trust is deemed to have received a supply by way of sale of the property; and

  • (b) the supply is deemed to have been made for consideration equal to the amount determined under the Income Tax Act to be the proceeds of disposition of the property.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1997, c. 10, s. 73

Marginal note:Distribution by trust

 For the purposes of this Part, where a trustee of a trust distributes property of the trust to one or more persons, the distribution of the property is deemed to be a supply of the property made by the trust at the place at which the property is delivered or made available to the persons and for consideration equal to the amount determined under the Income Tax Act to be the proceeds of disposition of the property.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1997, c. 10, ss. 73, 231

Marginal note:Definitions

  •  (1) In this section,

    receiver

    receiver means a person who is a receiver within the meaning assigned by subsection 266(1); (séquestre)

    representative

    representative means

    • (a) a person, other than a trustee in bankruptcy or a receiver, who is administering, winding up, controlling or otherwise dealing with any property, business, commercial activity or estate of a registrant, and

    • (b) a trustee of a trust that is a registrant. (représentant)

  • Marginal note:Certificates for receivers

    (2) Every receiver shall, before distributing to any person any property or money under the control of the receiver in the receiver’s capacity as receiver, obtain a certificate from the Minister certifying that all amounts that are, or can reasonably be expected to become, payable or remittable under this Part by the receiver in that capacity in respect of the reporting period during which the distribution is made, or any previous reporting period, have been paid or that security for the payment or remittance of the amounts has, in accordance with this Part, been accepted by the Minister.

  • Marginal note:Certificates for representatives

    (3) Every representative of a registrant shall, before distributing to any person any property or money under the control of the representative in the representative’s capacity as the representative, obtain a certificate from the Minister certifying that

    • (a) all amounts that are payable or remittable by the registrant under this Part in respect of the reporting period during which the distribution is made, or any previous reporting period, and

    • (b) all amounts that are, or can reasonably be expected to become, payable or remittable under this Part by the representative in that capacity in respect of the reporting period during which the distribution is made, or any previous reporting period,

    have been paid or that security for the payment or remittance of the amounts has, in accordance with this Part, been accepted by the Minister.

  • Marginal note:Liability for failure to obtain certificate

    (4) Any

    • (a) receiver who distributes property or money without obtaining a certificate as required by subsection (2) in respect of the amounts referred to in that subsection, or

    • (b) representative who distributes property or money without obtaining a certificate as required by subsection (3) in respect of the amounts referred to in that subsection

    is personally liable for the payment or remittance of those amounts to the extent of the value of the property or money so distributed.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 123
  • 1997, c. 10, s. 74

SUBDIVISION BAmalgamation and Winding-up

Marginal note:Amalgamations

 Where two or more corporations (each of which is referred to in this section as a “predecessor”) are merged or amalgamated to form one corporation (in this section 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,

  • (a) except as otherwise provided in this Part, the new corporation shall, for the purposes of this Part, be deemed to be a separate person from each of the predecessors;

  • (b) for the purposes of applying the provisions of this Part in respect of property or a service acquired, imported or brought into a participating province by a predecessor, for the purposes of sections 231 and 249, and for prescribed purposes, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor; and

  • (c) for the purposes of this Part, the transfer of any property by a predecessor to the new corporation as a consequence of the merger or amalgamation shall be deemed not to be a supply.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1997, c. 10, s. 255

Marginal note:Winding-up

 Where 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,

  • (a) for the purposes of applying the provisions of this Part in respect of property or a service acquired, imported or brought into a participating province by the other corporation as a consequence of the winding-up, for the purposes of sections 231 and 249, and for prescribed purposes, the other corporation shall be deemed to be the same corporation as, and a continuation of, the particular corporation; and

  • (b) for the purposes of this Part, the transfer of any property to the other corporation as a consequence of the winding-up shall be deemed not to be a supply.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1997, c. 10, s. 255

SUBDIVISION B.1Partnerships and Joint Ventures

Marginal note:Partnerships

  •  (1) For the purposes of this Part, anything done by a person as a member of a partnership is deemed to have been done by the partnership in the course of the partnership’s activities and not to have been done by the person.

  • Marginal note:Acquisitions by member

    (2) Despite subsection (1), if property or a service is acquired, imported or brought into a participating province by a member of a partnership for consumption, use or supply in the course of activities of the partnership but not on the account of the partnership, the following rules apply:

    • (a) except as otherwise provided in subsection 175(1), the partnership is deemed

      • (i) not to have acquired or imported the property or service, and

      • (ii) where the property was brought by the member into a participating province, not to have so brought it into that province;

    • (b) where the member is not an individual, for the purpose of determining an input tax credit or rebate of the member in respect of the property or service and, in the case of property that is acquired or imported for use as capital property of the member, applying Subdivision D of Division II in relation to the property, subsection (1) does not apply to deem the member not to have acquired or imported the property or service and the member is deemed to be engaged in those activities of the partnership; and

    • (c) where the member is not an individual and the partnership at any time pays an amount to the member as a reimbursement and is entitled to claim an input tax credit in respect of the property or service in circumstances in which subsection 175(1) applies, any input tax credit in respect of the property or service that the member would, but for this paragraph, be entitled to claim in a return of the member that is filed with the Minister after that time shall be reduced by the amount of the input tax credit that the partnership is entitled to claim.

  • Marginal note:Supply to partnership

    (3) Where a person who is or agrees to become a member of a partnership supplies property or a service to the partnership otherwise than in the course of the partnership’s activities

    • (a) where the property or service is acquired by the partnership for consumption, use or supply exclusively in the course of commercial activities of the partnership, any amount that the partnership agrees to pay to or credit the person in respect of the property or service is deemed to be consideration for the supply that becomes due at the time the amount is paid or credited;

    • (b) in the case of management or administrative services that are rendered by a general partner of an investment limited partnership to the investment limited partnership under an agreement for the particular supply of those services,

      • (i) if subsection 136.1(2) applies in respect of the particular supply, for each separate supply of those services that is deemed under paragraph 136.1(2)(a) to be made by the general partner for a billing period (within the meaning of that subsection), the separate supply is deemed, despite paragraph 136.1(2)(c), to be made for consideration that becomes due on the last day of the billing period equal to the fair market value of the services rendered under the agreement by the general partner to the investment limited partnership during the billing period, determined as if the general partner were not a member of the investment limited partnership and were dealing at arm’s length with the investment limited partnership, and

      • (ii) in any other case,

        • (A) the general partner is deemed to have made, and the investment limited partnership is deemed to have received, a separate supply of those services for each reporting period of the general partner during which those services are, or are to be, rendered under the agreement, and

        • (B) each separate supply of those services that is deemed to be made under clause (A) for a reporting period of the general partner is deemed to be made on the first day of the reporting period for consideration that becomes due on the last day of the reporting period equal to the fair market value of the services rendered under the agreement by the general partner to the investment limited partnership during the reporting period, determined as if the general partner were not a member of the investment limited partnership and were dealing at arm’s length with the investment limited partnership; and

    • (c) in any other case, the supply is deemed to have been made for consideration that becomes due at the time the supply is made equal to the fair market value at that time of the property or service acquired by the partnership determined as if the person were not a member of the partnership and were dealing at arm’s length with the partnership.

  • Marginal note:Deemed supply to partner

    (4) Where a partnership disposes of property of the partnership

    • (a) to a person who, at the time the disposition is agreed to or otherwise arranged, is or has agreed to become a member of the partnership, or

    • (b) to a person as a consequence of that person ceasing to be a member of the partnership,

    the following rules apply:

    • (c) the partnership is deemed to have made to the person, and the person is deemed to have received from the partnership, a supply of the property for consideration that becomes due at the time the property is disposed of equal to the total fair market value of the property (including the fair market value of the person’s interest in the property) immediately before the time the property is disposed of, and

    • (d) subsection 172(2) does not apply in respect of the supply.

  • Marginal note:Joint and several liability

    (5) A partnership and each member or former member (each of which is referred to in this subsection as the “member”) of the partnership (other than a member who is a limited partner and is not a general partner) are jointly and severally, or solidarily, liable for

    • (a) the payment or remittance of all amounts that become payable or remittable by the partnership under this Part before or during the period during which the member is a member of the partnership or, where the member was a member of the partnership at the time the partnership was dissolved, after the dissolution of the partnership, except that

      • (i) the member is liable for the payment or remittance of amounts that become payable or remittable before the period only to the extent of the property and money that is regarded as property or money of the partnership under the relevant laws of general application in force in a province relating to partnerships, and

      • (ii) the payment or remittance by the partnership or by any member thereof of an amount in respect of the liability discharges their liability to the extent of that amount; and

    • (b) all other obligations under this Part that arose before or during that period for which the partnership is liable or, where the member was a member of the partnership at the time the partnership was dissolved, the obligations that arose upon or as a consequence of the dissolution.

  • Marginal note:Continuation of partnership

    (6) Where a partnership would, but for this subsection, be regarded as having ceased to exist, the partnership is deemed for the purposes of this Part not to have ceased to exist until the registration of the partnership is cancelled.

  • Marginal note:Continuation of predecessor partnership by new partnership

    (7) Where

    • (a) a partnership (in this subsection referred to as the “predecessor partnership”) would, but for this section, be regarded as having ceased at any time to exist,

    • (b) a majority of the members of the predecessor partnership that together had, at or immediately before that time, more than a 50% interest in the capital of the predecessor partnership become members of another partnership of which they comprise more than half of the members, and

    • (c) the members of the predecessor partnership who become members of the other partnership transfer to the other partnership all or substantially all of the property distributed to them in settlement of their capital interests in the predecessor partnership,

    except where the other partnership is registered or applies for registration under section 240, the other partnership is deemed to be a continuation of and the same person as the predecessor partnership.

  • Marginal note:Investment limited partnership — supply by general partner

    (8) For the purposes of this Part, if a general partner of an investment limited partnership renders a management or administrative service to the investment limited partnership,

    • (a) the rendering of the service is deemed not to be done by the general partner as a member of the investment limited partnership; and

    • (b) the supply by the general partner to the investment limited partnership that includes the service is deemed to have been made otherwise than in the course of the investment limited partnership’s activities.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1997, c. 10, ss. 76, 232
  • 2009, c. 32, s. 36
  • 2017, c. 33, s. 144
  • 2018, c. 27, s. 49

Marginal note:Joint venture election

  •  (1) Where a registrant (in this section referred to as the “operator”) is a participant in a joint venture (other than a partnership) under an agreement, evidenced in writing, with another person (in this section referred to as the “co-venturer”) for the exploration or exploitation of mineral deposits or for a prescribed activity, and the operator and the co-venturer jointly make an election under this subsection,

    • (a) all properties and services that are, during the period the election is in effect, supplied, acquired, imported or brought into a participating province under the agreement by the operator on behalf of the co-venturer in the course of the activities for which the agreement was entered into shall, for the purposes of this Part, be deemed to be supplied, acquired, imported or brought into the province, as the case may be, by the operator and not by the co-venturer;

    • (b) section 177 does not apply in respect of a supply referred to in paragraph (a); and

    • (c) all supplies of property or services made, during the period the election is in effect, under the agreement by the operator to the co-venturer shall, for the purposes of this Part, be deemed not to be supplies to the extent that the property or services are, but for this section, acquired by the co-venturer for consumption, use or supply in the course of commercial activities for which the agreement was entered into.

  • Marginal note:Exception

    (1.1) Paragraph (1)(a) does not apply to the acquisition, importation or bringing into a participating province of property or a service by an operator on behalf of a co-venturer where the property or service is so acquired, imported or brought into the province for consumption, use or supply in the course of activities that are not commercial activities and the operator

    • (a) is a government other than a specified Crown agent; or

    • (b) would not be required, because of an Act of Parliament other than this Act, to pay tax in respect of the acquisition, importation or bringing into the province of the property or service if the operator acquired or, imported the property or service or brought it into the province for that purpose otherwise than on behalf of the co-venturer.

  • Marginal note:Assignee of interest in joint venture

    (2) For the purposes of this section, where a particular person has made an election under this section with respect to a joint venture and at any time during the period the election is in effect another person becomes a participant in the venture by acquiring an interest in it from the particular person, the other person shall be deemed to have made, at that time, an election under this section in accordance with subsection (4) with respect to the venture jointly with the operator of the venture.

  • Marginal note:Revocation

    (3) An operator and a co-venturer who have jointly made an election under this section may jointly revoke the election.

  • Marginal note:Form of election or revocation

    (4) An election or revocation under this section made jointly by an operator and a co-venturer is not a valid election or revocation unless it is made in prescribed form containing prescribed information and specifies the effective date of the election or revocation.

  • Marginal note:Joint and several liability

    (5) Where a registrant and another person make, or purport to make, an election under subsection (1) in respect of an agreement between the registrant and the person, the registrant and the other person are jointly and severally liable for all obligations under this Part that result from the activities for which the agreement was entered into and that are or would be, but for this section, engaged in by the registrant on behalf of the other person.

  • Marginal note:Joint venture beginning before 1991

    (6) Where an operator who is a participant in a joint venture (other than a partnership) under an agreement referred to in subsection (1) entered into before 1991 with a co-venturer files a return for the operator’s first reporting period beginning after 1990 in which all properties and services supplied, acquired or imported by the operator on behalf of the co-venturer in the course of the activities for which the agreement was entered into are reported as having been supplied, acquired or imported, as the case may be, by the operator and not by the co-venturer, the operator shall be deemed to have made jointly with the co-venturer an election under this section in accordance with subsection (4).

  • Marginal note:Application of subsection (6)

    (7) Subsection (6) applies as between an operator and a co-venturer, in respect of an agreement, only where

    • (a) the operator sends a notice in writing to the co-venturer not later than December 31, 1990 of the operator’s intention to file a return for the operator’s first reporting period beginning after 1990 reporting on the basis provided in subsection (6) with respect to all property and services supplied, acquired or imported by the operator on behalf of the co-venturer in the course of the activities for which the agreement was entered into; and

    • (b) the co-venturer has not, on or before the day that is the earlier of February 1, 1991 and the day that is 30 days after receipt of the notice from the operator, advised the operator in writing that all property and services supplied, acquired or imported by the operator on the co-venturer’s behalf in the course of the activities for which the agreement was entered into are not to be treated as having been supplied, acquired or imported by the operator.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 124
  • 1997, c. 10, s. 233
  • 2017, c. 33, s. 162(F)
 

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