Front End Wheel Loader Remission Order (SI/80-176)

Regulations are current to 2017-11-20

Front End Wheel Loader Remission Order

SI/80-176

FINANCIAL ADMINISTRATION ACT

Registration 1980-11-12

Order Respecting the Remission of Customs Duties and Sales Tax on Certain Front End Wheel Loaders and Their Parts

P.C. 1980-2751 1980-10-16

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, the Minister of Industry, Trade and Commerce and the Treasury Board, pursuant to section 17 of the Financial Administration Act, is pleased hereby to make the annexed Order respecting the remission of customs duty and sales tax on certain front end wheel loaders and their parts.

Short Title

 This Order may be cited as the Front End Wheel Loader Remission Order.

Interpretation

 In this Order,

Canadian value added

Canadian value added means

  • (a) in the case of front end wheel loaders produced in Canada, the aggregate of the following costs to the manufacturer of producing front end wheel loaders and the following allowances:

    • (i) the cost of parts produced in Canada and the cost of materials, to the extent that such materials are of Canadian origin, where the parts and materials are incorporated in the front end wheel loaders at the factory of the manufacturer in Canada, other than the cost of parts produced in Canada or the cost of materials, to the extent that such materials are of Canadian origin, where the parts and materials have been exported from Canada and subsequently imported into Canada as parts or materials,

    • (ii) transportation costs, including insurance charges, incurred in transporting parts and materials from a Canadian supplier or frontier port of entry to the factory of the manufacturer in Canada for incorporation into the front end wheel loaders, to the extent that such costs are not included under subparagraph (i),

    • (iii) that part of the following costs that are reasonably attributable to the production of the front end wheel loaders:

      • (A) wages paid for direct production labour in Canada,

      • (B) wages paid for indirect production and non-production labour in Canada,

      • (C) materials used in the production operation but not incorporated in the final product,

      • (D) light, heat, power and water,

      • (E) workmen’s compensation, unemployment insurance and group insurance premiums, pension contributions and similar expenses incurred in respect of labour referred to in clauses (A) and (B),

      • (F) taxes on land and buildings in Canada,

      • (G) fire and other insurance premiums in respect of production inventories and the production plant and its equipment that are paid to a company authorized by law to carry on a business in Canada,

      • (H) rent for factory premises paid to a beneficial owner in Canada,

      • (I) maintenance and repairs carried out in Canada to buildings, machinery and equipment used for production purposes,

      • (J) tools, dies, jigs, fixtures and other similar plant equipment items of a non-permanent character that have been manufactured in Canada,

      • (K) engineering services, experimental work and product development work executed in Canada, and

      • (L) miscellaneous factory expenses,

    • (iv) administrative and general expenses incurred in Canada that are reasonably attributable to the production of the front end wheel loaders,

    • (v) depreciation in respect of machinery and permanent plant equipment, to the extent that such depreciation is reasonably attributable to the production of the front end wheel loaders, and

    • (vi) a capital cost allowance of five per cent of the total capital outlay incurred by the manufacturer for land and buildings in Canada owned by the manufacturer and used by the manufacturer in the production of front end wheel loaders, to the extent that such allowance is reasonably attributable to the production of the front end wheel loaders, and

  • (b) in the case of parts produced in Canada, the aggregate of those costs of producing the parts and those allowances that would be included in the calculation of Canadian value added if the parts were front end wheel loaders; (valeur canadienne ajoutée)

cost of materials

cost of materials means

  • (a) where they are acquired by a manufacturer from a related person, the cost to that person of the materials to the extent that they are of Canadian origin, or

  • (b) where they are acquired by a manufacturer from any person other than one described in paragraph (a), the price paid by the manufacturer for the materials minus the duty paid value of imported goods used in the production thereof and foreign charges applicable thereto; (coûts des matières)

cost of parts produced in Canada

cost of parts produced in Canada means

  • (a) where they are acquired by a manufacturer from a related person, the Canadian value added of the parts, or

  • (b) where they are acquired by a manufacturer from any person other than one described in paragraph (a), the price paid by the manufacturer for the parts minus the duty paid value of imported goods used in the production thereof and foreign charges applicable thereto; (coût des pièces produites au Canada)

cost of sales of a front end wheel loader

cost of sales of a front end wheel loader means

  • (a) where it is imported by a manufacturer, the price paid by the manufacturer for the front end wheel loader, or

  • (b) where it is manufactured in Canada by a manufacturer, the factory cost of production of the front end wheel loader; (coût d’un chargeur à benne frontale sur pneus vendu)

depreciation

depreciation means an allowance of ten per cent of the capital cost to the manufacturer of machinery and permanent plant equipment acquired within the term of one hundred and twenty months ending on the last day of a period referred to in subsection 4(1) less that part of the capital cost to the manufacturer in respect of machinery and permanent plant equipment that was disposed of before the beginning of that period; (amortissement)

front end wheel loader

front end wheel loader, also variously known as front end loader, wheel loader, tractor loader or tractor shovel, means a new self propelled vehicle, fitted or designed to be fitted with a front mounted bucket or shovel having a cubic capacity for general purpose use of up to and including 14 cu. yd. (10.70 m3), mounted on wheels, all wheels being driven, with steering being effected either by articulation of the frame of an articulated loader or by the movement of the steered wheels of a rigid frame loader, but does not include skid steer loaders, crawler mounted loaders, loaders mounted on industrial or agricultural two-wheel drive tractors and combination loader-backhoes; (chargeur à benne frontale sur pneus)

manufacturer

manufacturer means a manufacturer of front end wheel loaders; (fabricant)

net sales value of a front end wheel loader

net sales value of a front end wheel loader means an amount equal to

  • (a) the aggregate of

    • (i) the price received by the manufacturer for the front end wheel loader, and

    • (ii) the costs of transporting the front end wheel loader within Canada but not including any other costs of transportation or delivery charges,

less

  • (b) the aggregate of

    • (i) federal sales and excise taxes and any applicable provincial taxes paid in respect of the front end wheel loader, and

    • (ii) rebates, commissions, discounts and other allowances granted by the manufacturer subsequent to the sale in respect of the front end wheel loader; (valeur nette de vente d’un chargeur à benne frontale sur pneus)

parts

parts means parts, accessories and parts thereof for use as original equipment in front end wheel loaders; (pièces)

related person

related person has the meaning assigned to that expression by section 251 of the Income Tax Act. (personne liée)

  • SI/85-59, s. 1(F).
  •  (1) For the purposes of this Order,

    • (a) parts acquired by a manufacturer shall be deemed to be produced outside Canada, and

    • (b) materials acquired by a manufacturer shall be deemed to be of non-Canadian origin

    unless for any such parts or materials acquired from a supplier in Canada, the manufacturer has obtained from the supplier a certificate in the form prescribed by the Minister of National Revenue, stating

    • (c) in the case of parts, their cost determined pursuant to the definition cost of parts produced in Canada in section 2, and

    • (d) in the case of materials, their cost determined pursuant to the definition cost of materials in section 2.

  • (2) Notwithstanding subsection (1), iron, steel or aluminum that has been poured in Canada is deemed to be of Canadian origin.

Application

  •  (1) This Order applies to a manufacturer who, in any twelve month period ending on July 31 after 1981, imports front end wheel loaders or parts and produces front end wheel loaders in Canada.

  • (2) Remission may be granted to a manufacturer referred to in subsection (1) in respect of a period described therein only where

    • (a) the ratio of the net sales value of front end wheel loaders produced by the manufacturer in Canada at any time and sold by him anywhere in that period to the net sales value of all front end wheel loaders sold by the manufacturer in that period for consumption in Canada is not less than 75 to 100; and

    • (b) subject to subsection (3), the sum of

      • (i) the Canadian value added of front end wheel loaders produced in Canada by the manufacturer in that period,

      • (ii) the Canadian value added of parts produced in Canada at any time by the manufacturer and sold by him in that period, and

      • (iii) the Canadian value added of parts produced in Canada at any time and acquired by or on behalf of the manufacturer in that period,

      is not less than 40 per cent of the cost of sales of all front end wheel loaders that the manufacturer sold for consumption in Canada in that period.

  • (3) For any twelve month period ending on July 31 after 1987, where a manufacturer fails to meet the 40 per cent requirement described in paragraph (2)(b) in order to be eligible for remission, the required percentage of Canadian value added is reduced by two percentage points for each 100 per cent increase of the dollar amount of Canadian value added in the production of front end wheel loaders by the manufacturer over and above the dollar amount of Canadian value added in the twelve month period ending July 31, 1983.

  • (4) For the purposes of this section, in computing the net sales value of front end wheel loaders that were sold for consumption in Canada by a manufacturer in any twelve month period ending on July 31 after 1981, the manufacturer shall deduct an amount equal to the net sales value of front end wheel loaders that were imported and sold by the manufacturer in any such period

    • (a) that are exempt from customs duties under the Customs Tariff;

    • (b) that are subsequently exported from Canada;

    • (c) for which no claim for remission is made pursuant to section 7; or

    • (d) in respect of which the total customs duties under the Customs Tariff are paid and for which there has been no remission.

  • (5) For the purposes of this section, in computing the cost of sales of front end wheel loaders that were sold for consumption in Canada by a manufacturer in any twelve month period ending on July 31 after 1981, the manufacturer shall deduct an amount equal to the cost of sales of front end wheel loaders that were imported and sold by the manufacturer in any such period

    • (a) that are exempt from customs duties under the Customs Tariff;

    • (b) that are subsequently exported from Canada;

    • (c) for which no claim for remission is made pursuant to section 7; or

    • (d) in respect of which the total customs duties under the Customs Tariff are paid and for which there has been no remission.

  • SI/88-17, s. 2;
  • SI/89-5, s. 1;
  • SI/95-82, s. 1.

Remission of Customs Duties

[SI/88-17, s. 2(E)]
  •  (1) Subject to section 7, remission is hereby granted of the customs duties paid or payable under the Customs Tariff on the following goods imported or taken out of warehouse prior to January 1, 1998 by the manufacturer or on the manufacturer’s behalf:

    • (a) front end wheel loaders, and

    • (b) parts, except pneumatic tires, tubes, buckets, digging teeth, cutting edges, cabs and roll-over protection structures

    that were or are imported or taken out of warehouse by a manufacturer for consumption or released after July 31, 1981.

  • (2) For the purposes of this section, where a manufacturer, in any twelve month period ending on July 31 after 1987, fails to achieve the percentage of Canadian value added required under subsection 4(2) or (3), the remission granted under subsection (1) shall be reduced by two per cent for each percentage point that the manufacturer’s Canadian value added is less than the Canadian value added required under subsection 4(3).

  • SI/88-17, s. 2;
  • SI/89-5, s. 2;
  • SI/98-6, s. 12.

Remission of Sales Tax

 Remission is hereby granted of the sales tax paid or payable under the Excise Tax Act on each front end wheel loader for which customs duties are remitted by this Order in an amount equal to the difference between the sales tax calculated on the duty-paid value of the front end wheel loader and the sales tax calculated on the value for duty of the front end wheel loader.

  • SI/88-17, s. 2(E).

Claim for Remission

 No remission shall be granted under this Order unless a claim therefor is made to the Minister of National Revenue within three years of the date of importation.

Designation

 Where

  • (a) a manufacturer has, by notice in writing to the Minister of National Revenue accompanied by the consent in writing of any related person, designated that person as a person associated with the manufacturer in the production of front end wheel loaders in Canada in a period ending on July 31 of the year specified in the notice, and

  • (b) the designation referred to in paragraph (a) has been approved by the Minister of Regional Industrial Expansion on or before a day not later than the 30th day after the commencement of the period referred to in that paragraph,

that person so designated shall, with respect to the importation of front end wheel loaders and sale of front end wheel loaders, be deemed for the purposes of this Order in that period not to be a separate person but to be one and the same person as the manufacturer.

  • SI/89-5, s. 3.

Reports

 A manufacturer shall submit to the Minister of National Revenue, as a condition of any remission granted under section 5 or 6, such reports as may be required by that Minister respecting the production and sales by the manufacturer of front end wheel loaders.

  • SI/89-5, s. 4.
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