New Harmonized Value-added Tax System Regulations (SOR/2010-117)

Definition of validity period

• 58.32 (1) In this section, validity period of a passenger transportation pass means

  • (a) the period throughout which the passenger transportation pass entitles an individual to transportation services; or

  • (b) if the period described in paragraph (a) is not ascertainable at the time when the passenger transportation pass is supplied to a person, the period beginning on the day the passenger transportation pass is delivered or made available to the recipient of the supply and ending on the day on which the passenger transportation pass expires or, in the absence of an expiration date, ending on April 1, 2015.

• Marginal note:Validity period before April 2013

  (2) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a passenger transportation pass made in Prince Edward Island to the extent that the consideration is attributable to any part of the validity period of the passenger transportation pass that is before April 1, 2013.

• Marginal note:Consideration due or paid after January 2013

  (3) If a taxable supply of a passenger transportation pass is made in Prince Edward Island and any consideration for the passenger transportation pass becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, to the extent that any consideration is attributable to any part of the validity period of the passenger transportation pass that is after March 31, 2013, that consideration is deemed, for the purpose of applying subsection 165(2) of the Act to the supply, to have become due on April 1, 2013 and not to have been paid before April 1, 2013.

• Marginal note:Consideration due or paid before February 2013

  (4) Subject to subsection (5), if an amount of consideration for a taxable supply of a passenger transportation pass made in Prince Edward Island by a registrant to a person that is not a consumer of the passenger transportation pass becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and any part of the amount of consideration is attributable to a part of the validity period of the passenger transportation pass that is after March 31, 2013, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required to pay, in accordance with subsection (6), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

• Marginal note:Exception

  (5) Subsection (4) does not apply in respect of a supply of a passenger transportation pass made to a person if

  • (a) the passenger transportation pass is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;

  • (b) the person

    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the passenger transportation pass, the total amount of tax under subsection 165(2) of the Act that would be payable by the person in respect of the supply, and

    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and

  • (c) the person is neither

    • (i) a registrant that is a selected listed financial institution, nor

    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

• Marginal note:Payment of tax — subsection (4)

  (6) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (4),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes April 1, 2013 is required to be filed on or before a particular day that is before August 1, 2013, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and

  • (b) in any other case, the person shall, before August 1, 2013, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Validity period ending before May 2013

  (7) Despite subsections (3) and (4), no tax is payable under subsection 165(2) of the Act in respect of a taxable supply made in Prince Edward Island of a passenger transportation pass in respect of which the validity period begins before April 1, 2013 and ends before May 1, 2013.

Marginal note:Tangible personal property returned after March 2013

58.33 Where a person purchased tangible personal property in Prince Edward Island from a supplier before April 1, 2013 and paid retail sales tax in respect of the tangible personal property and, on or after April 1, 2013 and before August 1, 2013, the person returns the tangible personal property in exchange for other tangible personal property that the supplier supplies to the person in Prince Edward Island,

• (a) if the consideration for the supply of the other property exceeds the consideration for the returned property, tax under subsection 165(2) of the Act in respect of the other property applies only on the excess amount; and

• (b) if the consideration for the supply of the other property is less than or equal to the consideration for the returned property, no tax under subsection 165(2) of the Act is payable in respect of the supply of the other property.

Marginal note:Progress payments

58.34 Despite any other provision of this Part, if a taxable supply is made in Prince Edward Island under a contract to construct, renovate, alter or repair real property or a ship or other marine vessel,

• (a) any consideration for the supply that becomes due, or is paid without having become due, after November 8, 2012 and before April 1, 2013 as a progress payment that is required under the contract, or as a holdback from such a progress payment, is deemed, for the purpose of applying subsection 165(2) of the Act, to have become due on April 1, 2013 and not to have been paid before that day;

• (b) no tax is payable under subsection 165(2) of the Act in respect of any part of the consideration for the supply that may reasonably be attributed to property delivered and services performed under the contract before April 1, 2013; and

• (c) where paragraph 168(3)(c) of the Act applies in respect of the supply, tax under subsection 165(2) of the Act is payable in respect of the supply and the construction, renovation, alteration or repair is substantially completed before March 2013, for the purpose of applying subsection 165(2) of the Act, the construction, renovation, alteration or repair is deemed to have been substantially completed on March 1, 2013 and not before that day.

Marginal note:Combined supply

58.35 Where a particular supply that includes a combination of personal property, real property or a service (each of which in this section is referred to as an “element”) is made in Prince Edward Island, the consideration for each element is not separately identified and no tax would, if a particular element that is property the ownership or possession of which is transferred to the recipient before April 1, 2013 were supplied separately, be payable under subsection 165(2) of the Act in respect of that particular element, for the purpose of applying tax under that subsection in respect of the supply, the particular element is deemed to have been supplied separately from all of the other elements.

Marginal note:Adjustments

• 58.36 (1) If a person pays tax as a consequence of the application of subsection 58.23(5) or (6), 58.24(5) or (6), 58.25(6) or (7), 58.31(4) or 58.32(4) calculated on the whole or part of the consideration for a taxable supply and that whole or part is subsequently reduced, to the extent that the person did not claim, and would not be, in the absence of this section, entitled to claim, an input tax credit or a rebate in respect of the portion of the tax payable under subsection 165(2), 218.1(1) or 220.08(1) of the Act that was calculated on the amount by which the whole or part was reduced, that portion is deemed, for the purpose of determining a rebate under section 261 of the Act, to be an amount that was not payable or remittable by the person.

• Marginal note:Application

  (2) Subsection (1) does not apply in circumstances in which section 161 of the Act applies.

Marginal note:Definitions

• 58.37 (1) In this section, direct seller, distributor, exclusive product and independent sales contractor have the same meanings as in section 178.1 of the Act.

• Marginal note:Exclusive products held on April 1, 2013

  (2) If before April 1, 2013, when an approval of the Minister for the application of section 178.3 of the Act to a direct seller is in effect, the direct seller has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect and the independent sales contractor holds, at the beginning of that day, the exclusive product for sale in Prince Edward Island, for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the direct seller is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.3(1) of the Act.

• Marginal note:Prepayments for exclusive products not delivered by April 1, 2013

  (3) If before April 1, 2013, when an approval of the Minister for the application of section 178.3 of the Act to a direct seller is in effect,

  • (a) the direct seller has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect,

  • (b) consideration for the supply becomes due, or is paid without having become due, after November 8, 2012 and before April 1, 2013,

  • (c) the exclusive product is not delivered to the independent sales contractor before April 1, 2013, and

  • (d) the exclusive product is to be held by the independent sales contractor for sale in Prince Edward Island,

  for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the direct seller is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.3(1) of the Act.

• Marginal note:Adaptation — subparagraph 178.3(1)(a)(i) of Act

  (4) In applying subsection 178.3(1) of the Act in respect of a deemed supply under subsection (2) or (3), subparagraph 178.3(1)(a)(i) is adapted as follows:

  • (i) that becomes due, and is paid, at a particular time that is at the beginning of April 1, 2013, and

• Marginal note:Exclusive products held on April 1, 2013

  (5) If before April 1, 2013, when an approval of the Minister for the application of section 178.4 of the Act to a distributor of a direct seller is in effect, the distributor has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect and the independent sales contractor holds, at the beginning of that day, the exclusive product for sale in Prince Edward Island, for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the distributor is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.4(1) of the Act.

• Marginal note:Prepayments for exclusive products not delivered by April 1, 2013

  (6) If before April 1, 2013, when an approval of the Minister for the application of section 178.4 of the Act to a distributor of a direct seller is in effect,

  • (a) the distributor has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect,

  • (b) consideration for the supply becomes due, or is paid without having become due, after November 8, 2012 and before April 1, 2013,

  • (c) the exclusive product is not delivered to the independent sales contractor before April 1, 2013, and

  • (d) the exclusive product is to be held by the independent sales contractor for sale in Prince Edward Island,

  for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the distributor is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.4(1) of the Act.

• Marginal note:Adaptation — subparagraph 178.4(1)(a)(i) of Act

  (7) In applying subsection 178.4(1) of the Act in respect of a deemed supply under subsection (5) or (6), subparagraph 178.4(1)(a)(i) of the Act is adapted as follows:

  • (i) that becomes due, and is paid, at a particular time that is at the beginning of April 1, 2013, and

Marginal note:Reciprocal taxation agreements

58.38 Subsections 58.23(3) to (6), 58.24(3) to (6), 58.25(4) to (7), 58.31(3), (4), (8) and (9) and 58.32(3) and (4) do not apply in respect of any consideration for a supply made to a person listed in Schedule A of the reciprocal taxation agreement entered into between the Government of Canada and the Government of Prince Edward Island that is applicable on March 31, 2013.

DIVISION 4Special Cases

Marginal note:Employee and shareholder benefits

• 58.39 (1) In respect of the 2013 taxation year, if

  • (a) a benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing an individual’s income from an office or employment and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in the year in relation to that office or employment is located in Prince Edward Island, or

  • (b) a benefit amount is required under subsection 15(1) of the Income Tax Act to be included in computing an individual’s income and the individual is resident in Prince Edward Island at the end of the year

  the portion of subclause (I) of the description of A in clause 173(1)(d)(vi)(B) of the Act after sub-subclause 2 is adapted as follows:

  10.75%, and

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of a supply if section 37 of the New Harmonized Value-added Tax System Regulations, No. 2 applies for the purpose of determining an amount of tax under subparagraph 173(1)(d)(vi) of the Act in respect of an amount that includes the benefit amount referred to in subsection (1) in respect of the supply.

Marginal note:Election for shorter reporting period

58.4 Any person that, immediately before April 1, 2013, is resident in Prince Edward Island and registered under Subdivision d of Division V of Part IX of the Act may, subject to section 250 of the Act,

• (a) if the reporting period of the person immediately before April 1, 2013 is a fiscal quarter, make an election under section 246 of the Act to have reporting periods that are fiscal months of the person to take effect, despite paragraph 246(1)(a) of the Act, on the first day of any fiscal quarter of the person that begins before April 1, 2014; and

• (b) if the reporting period of the person immediately before April 1, 2013 is a fiscal year,

  • (i) make an election under section 246 of the Act to have reporting periods that are fiscal months of the person to take effect, despite paragraph 246(1)(a) of the Act, on the first day of any fiscal month of the person that begins before April 1, 2014, or

  • (ii) make an election under section 247 of the Act to have reporting periods that are fiscal quarters of the person to take effect, despite paragraph 247(1)(a) of the Act, on the first day of any fiscal quarter of the person that begins before April 1, 2014.