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Jobs and Economic Growth Act (S.C. 2010, c. 12)

Assented to 2010-07-12

Marginal note:1997, c. 10, s. 179(1)
  •  (1) Subsection 185(1) of the Act is replaced by the following:

    Marginal note:Financial services — input tax credits
    • 185. (1) If tax in respect of property or a service acquired, imported or brought into a participating province by a registrant becomes payable by the registrant at a time when the registrant is neither a listed financial institution nor a person that is a financial institution because of paragraph 149(1)(b), for the purpose of determining an input tax credit of the registrant in respect of the property or service and for the purposes of Subdivision d, to the extent (determined in accordance with subsections 141.01(2) and 141.02(6)) that the property or service was acquired, imported or brought into the province, as the case may be, for consumption, use or supply in the course of making supplies of financial services that relate to commercial activities of the registrant,

      • (a) if the registrant is a financial institution because of paragraph 149(1)(c), the property or service is deemed, despite subsections 141.01(2) and 141.02(6), to have been so acquired, imported or brought into the province for consumption, use or supply in the course of those commercial activities except to the extent that the property or service was so acquired, imported or brought into the province for consumption, use or supply in the course of activities of the registrant that relate to

        • (i) credit cards or charge cards issued by the registrant, or

        • (ii) the making of any advance, the lending of money or the granting of any credit; and

      • (b) in any other case, the property or service is deemed, despite subsections 141.01(2) and 141.02(6), to have been so acquired, imported or brought into the province for consumption, use or supply in the course of those commercial activities.

  • (2) Subsection (1) is deemed to have come into force on April 1, 2007.

Marginal note:1997, c. 10, s. 42(1); 1999, c. 31, s. 86(F)
  •  (1) The portion of section 217 of the Act before paragraph (a) is replaced by the following:

    Marginal note:Definitions

    217. The following definitions apply in this Division.

    “imported taxable supply”

    « fourniture taxable importée »

    “imported taxable supply” means

  • (2) Section 217 of the Act is amended by adding the following in alphabetical order:

    “Canadian activity”

    « activité au Canada »

    “Canadian activity” of a person means an activity of the person carried on, engaged in or conducted in Canada.

    “duty”

    « tâche »

    “duty” means anything done by an employee in the course of, or in relation to, the office or employment of the employee.

    “employee”

    « salarié »

    “employee” includes an individual who agrees to become an employee.

    “external charge”

    « frais externes »

    “external charge” for a specified year of a qualifying taxpayer in respect of an outlay or expense described in any of paragraphs 217.1(2)(a) to (c) means the amount in respect of the outlay or expense determined by the formula

    A – B

    where

    A 
    is the amount of the outlay or expense that
    • (a) is allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the qualifying taxpayer’s income for the specified year, or would be so allowed if

      • (i) the qualifying taxpayer’s income were computed in accordance with that Act,

      • (ii) the qualifying taxpayer carried on a business in Canada, and

      • (iii) that Act applied to the qualifying taxpayer, and

    • (b) may reasonably be regarded as being applicable to a Canadian activity of the qualifying taxpayer; and

    B 
    is the total of all amounts, each of which is included in the amount determined under the description of A and is a permitted deduction for the specified year or a preceding specified year of the qualifying taxpayer.

    “loading”

    « chargement »

    “loading” means any part of the value of the consideration for a supply of a financial service that is attributable to administrative expenses, an error or profit margin, business handling costs, commissions, communications expenses, claims handling costs, employee compensation or benefits, execution or clearing costs, management fees, marketing or advertising costs, occupancy or equipment expenses, operating expenses, acquisition costs, premium collection costs, processing costs or any other costs or expenses of a person that makes the supply, other than commissions for a specified financial service or the part of the value of the consideration that is equal to

    • (a) if the financial service includes the issuance, renewal, variation or transfer of ownership of an insurance policy but not of any other qualifying instrument, the estimate of the net premium of the insurance policy;

    • (b) if the financial service includes the issuance, renewal, variation or transfer of ownership of a qualifying instrument (other than an insurance policy), the estimate of the default risk premium that is directly associated with the qualifying instrument; and

    • (c) if the financial service includes the issuance, renewal, variation or transfer of ownership of an insurance policy and a qualifying instrument (other than an insurance policy), the amount determined by the formula

      A + B

      where

      A 
      is the estimate of the net premium of the insurance policy, and
      B 
      is the estimate of the default risk premium that is directly associated with the qualifying instrument.

    “permitted deduction”

    « déduction autorisée »

    “permitted deduction” for a specified year of a qualifying taxpayer means an amount that is

    • (a) consideration for a supply of property or a service, or the value of imported goods, upon which tax under this Part (other than section 218.01 or subsection 218.1(1.2)) became payable during the specified year by the qualifying taxpayer;

    • (b) tax referred to in paragraph (a) in respect of a supply or importation referred to in that paragraph;

    • (c) a provincial levy that is prescribed for the purposes of section 154 and is in respect of a supply referred to in paragraph (a);

    • (d) an amount that is deemed, under subsection 248(18) or (18.1) of the Income Tax Act, to be assistance repaid by the qualifying taxpayer in respect of property or a service referred to in paragraph (a);

    • (e) consideration for a supply of property or a service (other than a financial service) made to the qualifying taxpayer as part of a transaction or series of transactions in which all participants deal at arm’s length with the qualifying taxpayer, unless

      • (i) that consideration is included in paragraph (a), or

      • (ii) an activity carried on, engaged in or conducted outside Canada, through a qualifying establishment of the qualifying taxpayer or of a person related to the qualifying taxpayer, relates in any manner to the supply;

    • (f) qualifying compensation of an employee of the qualifying taxpayer that is paid in the specified year by the qualifying taxpayer if the employee was primarily in Canada while performing its duties during the specified year;

    • (g) interest that is paid or payable by the qualifying taxpayer as the consideration for a supply of a financial service made to the qualifying taxpayer (other than an amount paid or credited by the qualifying taxpayer, or deemed by Part I of the Income Tax Act to have been paid or credited in the specified year by the qualifying taxpayer, to a person as, on account or in lieu of payment of, or in satisfaction of, a management or administration fee or charge (within the meaning of subsection 212(4) of that Act));

    • (h) dividends;

    • (i) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a specified arm’s length supply made to the qualifying taxpayer;

    • (j) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a supply (other than a specified derivative supply) of a specified financial service made to the qualifying taxpayer;

    • (k) consideration (other than interest referred to in paragraph (g), dividends referred to in paragraph (h) or loading) for a specified non-arm’s length supply made to the qualifying taxpayer;

    • (l) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a specified derivative supply made to the qualifying taxpayer; or

    • (m) a prescribed amount.

    “qualifying compensation”

    « rétribution admissible »

    “qualifying compensation” of an employee means any salary, wages and other remuneration of the employee and any other amount that is required to be included as income from an office or employment in computing the income of the employee for the purposes of the Income Tax Act.

    “qualifying consideration”

    « contrepartie admissible »

    “qualifying consideration” for a specified year of a qualifying taxpayer in respect of an outlay made, or expense incurred, outside Canada means the amount in respect of the outlay or expense determined by the formula

    A – B

    where

    A 
    is the amount of the outlay or expense that
    • (a) is allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the qualifying taxpayer’s income for the specified year, or would be so allowed if

      • (i) the qualifying taxpayer’s income were computed in accordance with that Act,

      • (ii) the qualifying taxpayer carried on a business in Canada, and

      • (iii) that Act applied to the qualifying taxpayer, and

    • (b) may reasonably be regarded as being applicable to a Canadian activity of the qualifying taxpayer; and

    B 
    is the total of all amounts each of which is included in the amount determined under the description of A and is
    • (a) an amount (other than an amount included in paragraph (b)) that is a permitted deduction for the specified year or a preceding specified year of the qualifying taxpayer, or

    • (b) an amount that represents a cost to a qualifying establishment of the qualifying taxpayer in a country other than Canada, or a share of a profit of the qualifying taxpayer that is redistributed from a qualifying establishment of the qualifying taxpayer in Canada to a qualifying establishment of the qualifying taxpayer in a country other than Canada, that is solely attributable to the issuance, renewal, variance or transfer of ownership by the qualifying taxpayer of a financial instrument that is a derivative, provided that all or substantially all of the amount is

      • (i) an error or profit margin, or employee compensation or benefits, that is reasonably attributable to the issuance, renewal, variance or transfer of ownership, or

      • (ii) the estimate of the default risk premium that is directly associated with the derivative.

    “qualifying establishment”

    « établissement admissible »

    “qualifying establishment” means a permanent establishment as defined in subsection 123(1) or a permanent establishment as defined in subsection 132.1(2).

    “qualifying instrument”

    « instrument admissible »

    “qualifying instrument” means money, a credit card voucher, a charge card voucher or a financial instrument.

    “qualifying service”

    « service admissible »

    “qualifying service” means a service or duty.

    “specified arm’s length supply”

    « fourniture déterminée entre personnes sans lien de dépendance »

    “specified arm’s length supply” means a supply (other than a specified derivative supply) of a financial service (other than a specified financial service) made to a qualifying taxpayer as part of a transaction or series of transactions in which all participants deal at arm’s length with the qualifying taxpayer.

    “specified derivative supply”

    « fourniture déterminée d’instrument dérivé »

    “specified derivative supply” means a supply

    • (a) that is a supply of a financial service of issuing, renewing, varying or transferring the ownership of a financial instrument that is a derivative, or that is a supply made by an agent, salesperson or broker of arranging for the issuance, renewal, variance or transfer of ownership of a financial instrument that is a derivative; and

    • (b) for which all or substantially all of the value of the consideration is attributable to

      • (i) any error or profit margin, or employee compensation or benefits, reasonably attributable to the supply, and

      • (ii) amounts that are not loading.

    “specified financial service”

    « service financier déterminé »

    “specified financial service” means a financial service supplied to a qualifying taxpayer by an agent, salesperson or broker of arranging for the issuance, renewal, variation or transfer of ownership of a financial instrument that is property of a person other than the agent, salesperson or broker.

    “specified non-arm’s length supply”

    « fourniture déterminée entre personnes ayant un lien de dépendance »

    “specified non-arm’s length supply” means a supply (other than a specified derivative supply) of a financial service (other than a specified financial service) that includes the issuance, renewal, variation or transfer of ownership of a qualifying instrument, made to a qualifying taxpayer as part of a transaction or series of transactions in which any participant does not deal at arm’s length with the qualifying taxpayer.

    “specified year”

    « année déterminée »

    “specified year” of a person means

    • (a) in the case of a person that is described in paragraph (a) or (b) of the definition “taxation year” in subsection 123(1), the taxation year of the person;

    • (b) in the case of a person that is a registrant but is not described in paragraph (a) or (b) of the definition “taxation year” in subsection 123(1), the fiscal year of the person; and

    • (c) in any other case, the calendar year.

    “taxing statute”

    « loi fiscale »

    “taxing statute” of a country means a statute of the country, or of a state, province or other political subdivision of the country, that imposes a levy or charge of general application that is an income or profits tax.

    “transaction”

    « opération »

    “transaction” includes an arrangement or event.

  • (3) Subsections (1) and (2) apply to any specified year of a person that ends after November 16, 2005, except that, for the purposes of applying the definition “permitted deduction” in section 217 of the Act, as enacted by subsection (2), in respect of an amount of consideration for a specified non-arm’s length supply that became due, or was paid without having become due, on or before that day, paragraph (k) of that definition shall be read without reference to the words “or loading”.

 

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