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• 36 (1) Section 1104 of the Regulations is amended by adding the following after subsection (3):

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  • Marginal note:Associated eligible persons or partnerships

    (3.3) Despite subsection (3.2), if all the eligible persons or partnerships that are associated with each other (within the meaning of section 256 of the Act, as modified by subsection (3.6)) in a taxation year file with the Minister in prescribed form an agreement that assigns for the purpose of this Part and Schedules II to VI a percentage to one or more of them for the year, the immediate expensing limit for the year of each of the eligible persons or partnerships is

    • (a) if the total of the percentages assigned in the agreement does not exceed 100%, $1,500,000 multiplied by the percentage assigned to that eligible person or partnership in the agreement; and

  • Marginal note:Failure to file agreement

    (3.4) If any of the eligible persons or partnerships that are associated with each other (within the meaning of section 256 of the Act, as modified by subsection (3.6)) in a taxation year has failed to file with the Minister an agreement described in subsection (3.3) within 30 days after notice in writing by the Minister has been forwarded to any of them that such an agreement is required for the purpose of any assessment of tax under Part I of the Act, the Minister shall, for the purpose of this Part and Schedules II to VI, allocate an amount to one or more of them for the taxation year.

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  • (3.6) For the purposes of this Part and Schedules II to VI, in determining whether an eligible person or partnership is associated (within the meaning of section 256 of the Act, as modified by this subsection) with another eligible person or partnership in a taxation year

    • (a) if the eligible person or partnership is a partnership,

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      • (iii) each member (in this subsection referred to as a “deemed shareholder”) of the deemed corporation is deemed to be a shareholder of the deemed corporation,

      • (iv) each deemed shareholder of the deemed corporation is deemed to hold a number of shares in the capital stock of the deemed corporation determined by the formula

        A × 100

        where

        A 

        is equal to

        • (A) the deemed shareholder’s specified proportion for the last fiscal period of the deemed corporation, or

        • (B) if the deemed shareholder does not have a specified proportion described in clause (A), the proportion that the fair market value of the deemed shareholder’s interest in the deemed corporation at that time is of the fair market value of all interests in the deemed corporation at that time, and

Marginal note:Enactment

• 135 (1) The Select Luxury Items Tax Act, whose text is as follows and whose schedule is set out in Schedule 2 to this Act, is enacted:

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  Marginal note:Arm’s length

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  • (2) For the purposes of this Act, persons are related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act, except that

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    • (b) a reference in those subsections to “shares of the capital stock of a corporation” or “shareholders” is, in respect of a partnership, to be read as a reference to “rights in a partnership” or “partners”, respectively.

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  Marginal note:Sale — subject item

  • 7 (1) For the purposes of this Act, a vendor sells a subject item to a purchaser if

    • (a) the vendor transfers ownership of the subject item to the purchaser by way of sale under an agreement; and

    • (b) the subject item is delivered or made available in Canada in relation to the agreement.

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  • Marginal note:Security interest — not a sale

    (3) For the purposes of this Act and despite subsection (1), if, under an agreement entered into in respect of a debt or obligation, a person transfers a subject item or an interest in a subject item for the purpose of securing payment of the debt or performance of the obligation, the transfer is deemed not to be a sale of the subject item and the transferee is deemed not to be an owner of the subject item only because of the transfer, and if, on payment of the debt or performance of the obligation or the forgiveness of the debt or obligation, the subject item or interest is retransferred, the retransfer of the subject item or interest is deemed not to be a sale of a subject item.

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  Marginal note:Tax — sale of subject item

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  • Marginal note:Taxable amount — lease by non-arm’s length purchaser

    (5) Subject to subsection (7), if a vendor sells a subject item to a purchaser that does not deal at arm’s length with the vendor, if the purchaser and another person enter into a lease, licence or similar arrangement (in this subsection referred to as the “lease agreement”) that provides the other person with the right to use the subject item for a period of at least six months and if the lease agreement is entered into in connection with the sale, the taxable amount of the subject item is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

    A + B

    where

    A 

    is the greatest of

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    • (b) the retail value of the subject item at the time at which the other person first has the right to use the subject item under the lease agreement, and

    • (c) the retail value of the subject item at the time at which possession of the subject item is transferred to the other person under the lease agreement; and

  • Marginal note:Taxable amount — lease to vendor by purchaser

    (6) Subject to subsection (7), if a vendor sells a subject item to a purchaser, if the purchaser and the vendor enter into a lease, licence or similar arrangement (in this subsection referred to as the “lease agreement”) that provides the vendor with the right to use the subject item for a period of at least six months and if the lease agreement is entered into in connection with the sale, the taxable amount of the subject item is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

    A + B

    where

    A 

    is the greater of

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    • (b) the retail value of the subject item at the time at which the vendor first has the right to use the subject item under the lease agreement; and

  Marginal note:Tax not payable — registered vendor of vehicles

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  • (3) The tax under section 18 in respect of a subject vehicle sold by a vendor to a purchaser is not payable if

    • (a) the subject vehicle is equipped for policing activities and

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      • (ii) it is the case that

        • (A) the purchaser and a police authority or military authority enter into an agreement that is a lease, licence or similar arrangement,

        • (B) the agreement is entered into at or before the time at which the sale is completed,

        • (C) the police authority or military authority has the right to use the subject vehicle for a period of at least six months under the agreement,

        • (D) the purchaser transfers possession of the subject vehicle to the police authority or military authority under the agreement, and

    • (b) the subject vehicle is equipped for military activities and

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      • (ii) it is the case that

        • (A) the purchaser and a military authority enter into an agreement that is a lease, licence or similar arrangement,

        • (B) the agreement is entered into at or before the time at which the sale is completed,

        • (C) the military authority has the right to use the subject vehicle for a period of at least six months under the agreement,

        • (D) the purchaser transfers possession of the subject vehicle to the military authority under the agreement, and

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  Marginal note:Rules — improvement after sale

  • 29 (1) Subject to section 31, for the purposes of this section and for the purposes of determining under section 35 the amount of tax payable under this section, if a vendor sells a subject item to a particular purchaser, the following rules apply:

    • (a) the improvement period in respect of the subject item is the period that begins on the day that an agreement for the sale is entered into and ends on

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  Marginal note:Joint ventures

  • 67 (1) For the purposes of this Act, anything done by a participant in a joint venture, or by an operator of the joint venture, in the course of the activities for which the joint venture agreement was entered into are deemed to have been done by the joint venture in the course of the joint venture’s activities and not to have been done by the participant or operator.

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  Marginal note:References to Tax Court of Canada

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  • Marginal note:Time during consideration not to count

    (2) For the purpose of making an assessment of a person that agreed in writing to the determination of a question, filing a notice of objection to an assessment or instituting an appeal from an assessment, the time between the day on which proceedings are instituted in the Tax Court of Canada to have a question determined and the day on which the question is finally determined must not be counted in the computation of

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  Marginal note:Collection restrictions

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  • Marginal note:No action pending determination by Tax Court of Canada

    (4) If a person has agreed under subsection 105(1) that a question should be determined by the Tax Court of Canada, or if a person is served with a copy of an application made under subsection 106(1) to that Court for the determination of a question, the Minister must not take any of the actions described in subsection (1) for the purpose of collecting that part of an amount assessed, the liability for payment of which could be affected by the determination of the question, before the day on which the question is determined by the Court.

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  Marginal note:Definition of transaction

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  • Marginal note:Transfers to spouse or common-law partner

    (6) Despite subsection (2), if at any time an individual transfers property to the individual’s spouse or common-law partner under a decree, order or judgment of a competent tribunal or under a written separation agreement and, at that time, the individual and the individual’s spouse or common-law partner were separated and living apart as a result of the breakdown of their marriage or common-law partnership as defined in subsection 248(1) of the Income Tax Act, for the purposes of paragraph (2)(d), the fair market value at that time of the property so transferred is deemed to be nil, but nothing in this subsection limits the liability of the individual under this Act.

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• (4) In applying subsection (2), the following rules apply:

  • (a) if a vendor sells a subject item to a purchaser, within the meaning of section 7 of the Select Luxury Items Tax Act, as enacted by subsection (1), and an agreement between the purchaser and the vendor for the sale of the subject item is entered into before September 2022, sections 18 and 29 of that Act, as enacted by subsection (1), apply in respect of the sale if the sale is completed, within the meaning of that section 7, on or after September 1, 2022 unless the purchaser entered into the agreement in writing before 2022 in the course of the vendor’s business of offering for sale that type of subject item;

  • (b) section 20 of that Act, as enacted by subsection (1), applies in respect of a subject item if the subject item is imported on or after September 1, 2022 unless the importer entered into an agreement in writing before 2022 with a vendor for the sale of the subject item in the course of the vendor’s business of offering for sale that type of subject item;

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  • (e) section 26 of that Act, as enacted by subsection (1), applies to a subject item that is used in Canada at a particular time on or after September 1, 2022 unless a person entered into an agreement in writing before 2022 with a vendor for the sale of the subject item in the course of the vendor’s business of offering for sale that type of subject item and the person is an owner of the subject item at the particular time;