New Harmonized Value-added Tax System Regulations, No. 2 (SOR/2010-151)

DIVISION 5Addition to Net Tax — Prescribed Time

Marginal note:Prescribed time

• 30 (1) If a person acquires or imports a specified property or service or brings it into a specified province and tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply, importation or bringing in becomes payable by the person, is paid by the person without having become payable or would have become payable by the person if the rules described in paragraphs 29(1)(a) to (g) applied in respect of that supply, importation or bringing in or if subsection 29(2) applied in respect of that bringing in, for the purposes of subsection 236.01(2) of the Act, the prescribed time in respect of a specified provincial input tax credit of the person in respect of the specified property or service is

  • (a) if the specified property or service is a qualifying motor vehicle the supply of which is made under a lease and the person is required, in accordance with subsection 235(1) of the Act, to add an amount representing all or part of that tax in determining the net tax for a reporting period of the person, the last day of the appropriate reporting period determined under subsection 235(2) of the Act;

  • (b) if the specified property or service is food, beverages or entertainment and the person is required, in accordance with subsection 236(1) of the Act, to add an amount representing all or part of that tax in determining the net tax for a reporting period of the person, the last day of the appropriate reporting period determined under subsection 236(1.1) of the Act;

  • (c) in the case where that tax would have only become payable by the person if the rules described in paragraphs 29(1)(a) to (g) applied in respect of that supply, importation or bringing in or if subsection 29(2) applied in respect of that bringing in, the day that is

    • (i) the particular day on which that tax would have become payable by the person if

      • (A) the reporting period of the person is a fiscal year,

      • (B) the reporting period of the person is a fiscal quarter and either

        • (I) the particular day is in a fiscal month that is not the last fiscal month of the fiscal quarter, or

        • (II) the particular day is in the last fiscal month of the fiscal quarter and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, or

      • (C) the reporting period of the person is a fiscal month and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, and

    • (ii) otherwise, the first day of the reporting period following the reporting period that includes the day on which that tax would have become payable by the person; and

  • (d) in any other case, the earlier of

    • (i) the day that is

      • (A) the particular day on which that tax becomes payable by the person if

        • (I) an input tax credit in respect of that tax is claimed in the return under Division V of Part IX of the Act filed for the reporting period that includes the particular day,

        • (II) the reporting period of the person is a fiscal year,

        • (III) the reporting period of the person is a fiscal quarter and either

          1 the particular day is in a fiscal month that is not the last fiscal month of the fiscal quarter, or

          2 the particular day is in the last fiscal month of the fiscal quarter and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, or

        • (IV) the reporting period of the person is a fiscal month and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, and

      • (B) otherwise, the first day of the reporting period following the reporting period that includes the day on which that tax becomes payable by the person, and

    • (ii) the day that is the later of July 1, 2010 and

      • (A) the particular day on which that tax is paid by the person if

        • (I) an input tax credit in respect of that tax is claimed in the return under Division V of Part IX of the Act filed for the reporting period that includes the particular day,

        • (II) the reporting period of the person is a fiscal year,

        • (III) the reporting period of the person is a fiscal quarter and either

          1 the particular day is in a fiscal month that is not the last fiscal month of the fiscal quarter, or

          2 the particular day is in the last fiscal month of the fiscal quarter and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, or

        • (IV) the reporting period of the person is a fiscal month and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, and

      • (B) otherwise, the first day of the reporting period following the reporting period that includes the day on which that tax is paid by the person.

• Marginal note:Prescribed time — Prince Edward Island

  (2) In applying subsection (1) in respect of a specified provincial input tax credit that is a Prince Edward Island recapture amount, the reference to “July 1, 2010” in subparagraph (1)(d)(ii) is to be read as a reference to “April 1, 2013”.

DIVISION 6Addition to Net Tax — Prescribed Manner

General Rules

Marginal note:Definitions

• 31 (1) The following definitions apply in this section.

  selected person

  selected person means a person that is not

  • (a) a financial institution;

  • (b) a hotel, bar, coffee shop or restaurant;

  • (c) an auto repair shop; or

  • (d) a scrap metal dealer. (personne désignée)

  specified production energy

  specified production energy means the part of specified energy acquired in, or brought into, a specified province by a selected person for consumption or use by the selected person in the production of tangible personal property intended for sale or in the production of production equipment used to produce such tangible personal property, but does not include the part of the specified energy acquired in, or brought into, the specified province for consumption or use by the selected person in equipment for the air conditioning, lighting, heating or ventilating of the production premises or in other equipment if that consumption or use is not integral to that production. (énergie déterminée pour la production)

  specified research energy

  specified research energy means

  • (a) in the case of specified energy acquired in or brought into Ontario by a person, the part of the specified energy for consumption or use by the person in the course of activities in Ontario that are eligible scientific research and experimental development activities for the purposes of the Taxation Act, 2007, S.O. 2007, c. 11, Sch. A, and in respect of which the person deducts an amount in computing the person’s tax payable under that Act; or

  • (b) in the case of specified energy acquired in or brought into British Columbia by a person, the part of the specified energy for consumption or use by the person in the course of activities in British Columbia that are eligible scientific research and experimental development activities for the purposes of the Income Tax Act, R.S.B.C. 1996, c. 215, and in respect of which the person deducts an amount in computing the person’s tax payable under that Act. (énergie déterminée pour la recherche)

  specified salary and wages

  specified salary and wages of an employee means any salary, wages and other remuneration of the employee and any other amount that is, or is 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. (rémunération déterminée)

• Marginal note:Qualifying motor vehicles and related property or services

  (2) If, at any time during a reporting period of a person, the person is a large business and the particular time prescribed by section 30 in respect of a specified provincial input tax credit of the person in respect of a specified property or service described in any of paragraphs 28(1)(a) to (d) is in the reporting period, for the purposes of subsection 236.01(2) of the Act, the amount to be added to the net tax of the person for the reporting period in respect of the specified provincial input tax credit is determined by the formula

  A × B

  where

  A

  is

  • (a) if the specified property or service is a qualifying motor vehicle in respect of which paragraph 30(1)(a) applies and the person is a large business at the time that would, in the absence of that paragraph, be the time prescribed by section 30 in respect of the specified provincial input tax credit, the specified provincial input tax credit,

  • (b) if the specified property or service is property or a service other than a qualifying motor vehicle in respect of which paragraph 30(1)(a) applies and the person is a large business at the particular time, the specified provincial input tax credit, and

  • (c) in any other case, zero; and

  B

  is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

• Marginal note:Specified energy

  (3) If, at any time during a reporting period of a person, the person is a large business, the particular time prescribed by section 30 in respect of a specified provincial input tax credit of the person in respect of specified energy is in the reporting period and the person is a large business at the particular time, for the purposes of subsection 236.01(2) of the Act, the amount to be added to the net tax of the person for the reporting period in respect of the specified provincial input tax credit is determined by the formula

  A × B

  where

  A

  is

  • (a) if an election is made by the person under subsection (7) for the recapture period that includes the particular time and an election made by the person under subsection (8) is in effect at the particular time, the amount determined by the formula

    C × D × E

    where

    C

    is the specified provincial input tax credit,

    D

    is the percentage determined by the formula

    F/G

    where

    F

    is

    • (i) in the case of specified energy acquired in or brought into Ontario, the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in Ontario to the extent that it can reasonably be considered that those specified salary and wages are not attributable to the direct engagement by the employee in activities that are eligible scientific research and experimental development activities for the purposes of the Taxation Act, 2007, S.O. 2007, c. 11, Sch. A, or

    • (ii) in the case of specified energy acquired in or brought into British Columbia, the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in British Columbia to the extent that it can reasonably be considered that those specified salary and wages are not attributable to the direct engagement by the employee in activities that are eligible scientific research and experimental development activities for the purposes of the Income Tax Act, R.S.B.C. 1996, c. 215, and

    G

    is the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in the specified province where the specified energy was acquired or brought into, and

    E

    is

    • (i) if the specified provincial input tax credit is in respect of specified energy acquired in or brought into Ontario, the production carried on by the person in Canada during the last fiscal year of the person immediately preceding the reporting period is carried on primarily in Ontario and the most significant business activity of the person carried on in Canada in that fiscal year is described in the industry classification system under the code

      • (A) 113, 211, 212, 322, 324, 325, 327 or 331, 4%,

      • (B) 311, 312, 313, 314, 321, 326 or 332, 13%, or

      • (C) 315, 316, 323, 333, 334, 335, 336, 337 or 339, 30%,

    • (ii) if the specified provincial input tax credit is in respect of specified energy acquired in or brought into British Columbia, of all the production carried on by the person in Canada during the last fiscal year of the person immediately preceding the reporting period, at least 10% is carried on in British Columbia and the most significant business activity of the person carried on in Canada in that fiscal year is described in the industry classification system under the code

      • (A) 113, 211, 212, 322, 324, 325, 327 or 331, 4%,

      • (B) 311, 312, 313, 314, 321, 326 or 332, 13%, or

      • (C) 315, 316, 323, 333, 334, 335, 336, 337 or 339, 30%, and

    • (iii) in any other case, the percentage determined by the formula

      H/I

      where

      H

      is the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified production energy and specified research energy, and

      I

      is the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified research energy,

  • (b) if an election made by the person under subsection (8) is in effect at the particular time and no election is made by the person under subsection (7) for the recapture period that includes the particular time, the amount determined by the formula

    J × K

    where

    J

    is the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified research energy, and

    K

    is

    • (i) if the specified provincial input tax credit is in respect of specified energy acquired in or brought into Ontario, the production carried on by the person in Canada during the last fiscal year of the person immediately preceding the reporting period is carried on primarily in Ontario and the most significant business activity of the person carried on in Canada in that fiscal year is described in the industry classification system under the code

      • (A) 113, 211, 212, 322, 324, 325, 327 or 331, 4%,

      • (B) 311, 312, 313, 314, 321, 326 or 332, 13%, or

      • (C) 315, 316, 323, 333, 334, 335, 336, 337 or 339, 30%,

    • (ii) if the specified provincial input tax credit is in respect of specified energy acquired in or brought into British Columbia, of all the production carried on by the person in Canada during the last fiscal year of the person immediately preceding the reporting period, at least 10% is carried on in British Columbia and the most significant business activity of the person carried on in Canada in that fiscal year is described in the industry classification system under the code

      • (A) 113, 211, 212, 322, 324, 325, 327 or 331, 4%,

      • (B) 311, 312, 313, 314, 321, 326 or 332, 13%, or

      • (C) 315, 316, 323, 333, 334, 335, 336, 337 or 339, 30%,

    • (ii.1) if the specified provincial input tax credit is in respect of specified energy acquired in or brought into Prince Edward Island, the production carried on by the person in Canada during the last fiscal year of the person immediately preceding the reporting period is carried on primarily in Prince Edward Island and the most significant business activity of the person carried on in Canada in that fiscal year is described in the industry classification system under the code

      • (A) 113, 211, 212, 322, 324, 325, 327 or 331, 4%,

      • (B) 311, 312, 313, 314, 321, 326 or 332, 13%, or

      • (C) 315, 316, 323, 333, 334, 335, 336, 337 or 339, 30%, and

    • (iii) in any other case, the percentage determined by the formula

      L/M

      where

      L

      is the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified production energy and specified research energy, and

      M

      is the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified research energy,

  • (c) if an election is made by the person under subsection (7) for the recapture period that includes the particular time and no election by the person under subsection (8) is in effect at the particular time, the amount determined by the formula

    N × O

    where

    N

    is the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified production energy, and

    O

    is the percentage determined by the formula

    P/Q

    where

    P

    is

    • (i) in the case of specified energy acquired in or brought into Ontario, the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in Ontario to the extent that it can reasonably be considered that those specified salary and wages are not attributable to the direct engagement by the employee in activities that are eligible scientific research and experimental development activities for the purposes of the Taxation Act, 2007, S.O. 2007, c. 11, Sch. A, or

    • (ii) in the case of specified energy acquired in or brought into British Columbia, the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in British Columbia to the extent that it can reasonably be considered that those specified salary and wages are not attributable to the direct engagement by the employee in activities that are eligible scientific research and experimental development activities for the purposes of the Income Tax Act, R.S.B.C. 1996, c. 215, and

    Q

    is the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in the specified province where the specified energy was acquired or brought into, and

  • (d) in any other case, the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified production energy and specified research energy; and

  B

  is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

• Marginal note:Telecommunications

  (4) If, at any time during a reporting period of a person, the person is a large business, the particular time prescribed by section 30 in respect of a specified provincial input tax credit of the person in respect of a specified property or service described in paragraph 28(1)(f) or (g) is in the reporting period and the person is a large business at the particular time, for the purposes of subsection 236.01(2) of the Act, the amount to be added to the net tax of the person for the reporting period in respect of the specified provincial input tax credit is determined by the formula

  A × B

  where

  A

  is 100% of the specified provincial input tax credit, except that the person may, if the specified property or service is provided to the person together with other property or services that are not a specified property or service (each of which is in this subsection referred to as an “element”) and the consideration for the specified property or service and each element is not separately identified, apply the following percentage

  • (a) if the specified property or service is acquired for consumption or use in British Columbia, 95%, and

  • (b) if the specified property or service is acquired for consumption or use in Ontario or Prince Edward Island and is provided to the person together with

    • (i) an element that is a service, 96%,

    • (ii) an element that is property, 89%, and

    • (iii) an element described in subparagraph (i) and an element described in subparagraph (ii), 86%; and

  B

  is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

• Marginal note:Food, beverages and entertainment

  (5) If, at any time during a reporting period of a person, the person is a large business and the time prescribed by section 30 in respect of a specified provincial input tax credit of the person in respect of a specified property or service described in paragraph 28(1)(h) is in the reporting period, for the purposes of subsection 236.01(2) of the Act, the amount to be added to the net tax of the person for the reporting period in respect of the specified provincial input tax credit is determined by the formula

  A × B

  where

  A

  is

  • (a) if the person is a large business at the time that would, in the absence of paragraph 30(1)(b), be the time prescribed by section 30 in respect of the specified provincial input tax credit, 50% of the specified provincial input tax credit, and

  • (b) in any other case, zero; and

  B

  is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

• Marginal note:Farmers

  (6) Despite subsections (2) to (5), no amount is to be added to the net tax of a person for a reporting period of the person as a consequence of those subsections in respect of a specified provincial input tax credit of the person if the chief source of income for the taxation year of the person immediately preceding the reporting period is farming and all of the property or services to which the specified provincial input tax credit relates is primarily consumed or used in the person’s farming activities.

• Marginal note:Selected listed financial institutions

  (6.1) Despite subsections (2) to (5), no amount is to be added to the net tax of a person for a reporting period of the person as a consequence of those subsections in respect of a specified provincial input tax credit of the person in respect of an amount of tax that becomes payable by the person while the person is a selected listed financial institution unless the amount of tax

  • (a) is deemed to have been paid by the person under subsection 171(1) or 171.1(2) of the Act; or

  • (b) is prescribed for the purposes of paragraph 169(3)(c) of the Act or paragraph (a) of the description of F in subsection 225.2(2) of the Act.

• Marginal note:Election to use the SRED proxy

  (7) For the purposes of subsection (3), a person may, before the first day of a recapture period, elect, for the recapture period, to determine the amount to be added under that subsection in respect of a specified provincial input tax credit (other than a Prince Edward Island recapture amount) of the person in respect of specified energy in accordance with a method described in that subsection.

• Marginal note:Election to use the production proxy

  (8) For the purposes of subsection (3), if a person produces tangible personal property for sale, the person may elect to determine the amount to be added under that subsection in respect of a specified provincial input tax credit of the person in respect of specified energy in accordance with a method described in that subsection at all times when the election is in effect.

• Marginal note:Form and manner of filing

  (9) An election made under subsection (8) by a person shall

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

  • (b) set out the day on which the election is to become effective, which shall be the first day of a recapture period;

  • (c) be filed with the Minister on or before the day on or before which the person must file a return under Division V of Part IX of the Act for the reporting period of the person that includes the day on which the election is to become effective; and

  • (d) remain in effect until a revocation of the election becomes effective.

• Marginal note:Revocation

  (10) A person that has made an election under subsection (8) may revoke the election, effective on the first day of a recapture period that begins at least one year after the election became effective, by filing in prescribed manner with the Minister a notice of revocation in prescribed form containing prescribed information on or before the day on or before which the person must file a return under Division V of Part IX of the Act for the reporting period of the person that includes the day on which the revocation is to become effective.