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Excise Tax Act (R.S.C., 1985, c. E-15)

Full Document:  

Act current to 2019-07-01 and last amended on 2019-06-21. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION VCollection and Remittance of Division II Tax (continued)

SUBDIVISION BRemittance of Tax (continued)

Marginal note:Promotional allowances

 For the purposes of this Part, if

  • (a) a particular registrant acquires particular tangible personal property exclusively for supply by way of sale for a price in money in the course of commercial activities of the particular registrant, and

  • (b) another registrant, who has made taxable supplies of the particular property by way of sale, whether to the particular registrant or another person,

    • (i) pays to or credits in favour of the particular registrant, or

    • (ii) allows as a discount on or credit against the price of any property or service (in this section referred to as the “discounted property or service”) supplied by the other registrant to the particular registrant,

    an amount in return for the promotion of the particular property by the particular registrant,

the following rules apply:

  • (c) the amount is deemed not to be consideration for a supply by the particular registrant to the other registrant,

  • (d) where the amount is allowed as a discount on or credit against the price of the discounted property or service,

    • (i) if the other registrant has previously charged to or collected from the particular registrant tax under Division II calculated on the consideration or part of it for the supply of the discounted property or service, the amount of the discount or credit is deemed to be a reduction in the consideration for that supply for the purposes of subsection 232(2), and

    • (ii) in any other case, the value of the consideration for the supply of the discounted property or service is deemed to be the amount, if any, by which the value of the consideration as otherwise determined for the purposes of this Part exceeds the amount of the discount or credit, and

  • (e) if the amount is not allowed as a discount on or credit against the price of any discounted property or service supplied to the particular registrant, the amount is deemed to be a rebate in respect of the particular property for the purposes of section 181.1.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2000, c. 30, s. 60

Meaning of specified amount

  •  (1) In this section, specified amount, in respect of a patronage dividend paid by a person in a fiscal year of the person, means the amount determined by the formula

    A × [(B + D)/(C + D)]

    where

    A
    is the amount of the patronage dividend;
    B
    is the total value of all consideration that became due, or was paid without having become due, in the immediately preceding fiscal year of the person while the person was a registrant for taxable supplies (other than supplies by way of sale of capital property of the person and zero-rated supplies) made in Canada by the person;
    C
    is the total value of all consideration that became due, or was paid without having become due, in the immediately preceding fiscal year of the person for taxable supplies (other than supplies by way of sale of capital property of the person) made in Canada by the person; and
    D
    is the total of all tax that became payable, or was paid without having become payable, in the immediately preceding fiscal year of the person in respect of taxable supplies (other than supplies by way of sale of capital property of the person) made by the person.
  • Marginal note:Patronage dividends

    (2) For the purposes of this Part, if, at any time in a fiscal year of a particular person, the particular person pays to another person a patronage dividend all or part of which is in respect of supplies (in this subsection referred to as “specified supplies”) that are taxable supplies (other than zero-rated supplies) made by the particular person to the other person, the particular person is deemed

    • (a) to have reduced, at that time,

      • (i) the total consideration for all supplies (in this subparagraph referred to as the “participating province’s supplies”) that are specified supplies made in a participating province and to which subsection 165(2) applied by the amount determined by the formula

        (100%/A) × B

        where

        A
        is the total of 100%, the rate set out in subsection 165(1) and the tax rate for that province, and
        B
        is
        • (A) if the particular person has made an election under this subsection that is in effect for that fiscal year, the part of the dividend that is in respect of the participating province’s supplies, and

        • (B) in any other case, the amount determined by the formula

          (C/D) × E

          where

          C
          is the portion of the total of the values determined, in computing the specified amount in respect of the dividend, for B and D in subsection (1) that is attributable to supplies made in that province,
          D
          is the total referred to in the description of C, and
          E
          is the specified amount in respect of the dividend, and
      • (ii) the total consideration for all supplies (in this subparagraph referred to as the “non-participating provinces’ supplies”) that are specified supplies to which subsection 165(2) did not apply by the amount determined by the formula

        (100%/A) × B

        where

        A
        is the total of 100% and the rate set out in subsection 165(1),
        B
        is
        • (A) if the particular person has made an election under this subsection that is in effect for that fiscal year, the part of the dividend that is in respect of the non-participating province’s supplies, and

        • (B) in any other case, the amount determined by the formula

          (C/D) × E

          where

          C
          is the portion of the total of the values determined, in computing the specified amount in respect of the dividend, for B and D in subsection (1) that is attributable to supplies made in non-participating provinces,
          D
          is the total referred to in the description of C, and
          E
          is the specified amount in respect of the dividend; and
    • (b) to have made, at that time, the appropriate adjustment, refund or credit in favour of, or to, the other person under subsection 232(2).

  • Marginal note:Exception

    (3) Subsection (2) does not apply to a patronage dividend paid by a person in a fiscal year of the person for which an election made by the person under this subsection is in effect, in which event the dividend shall be deemed not to be a reduction of the consideration for any supplies.

  • Marginal note:Time for election

    (4) An election made under subsection (2) or (3) by a person shall be made before any patronage dividend is paid by the person in the fiscal year of the person in which the election is to take effect.

  • Marginal note:Revocation of election

    (5) An election made under subsection (2) or (3) by a person may be revoked by the person in a fiscal year of the person if the revocation is to take effect before any patronage dividend is paid by the person in that year.

  • Marginal note:Date of payment of dividend

    (6) For the purposes of this section, a dividend shall be deemed to be paid on the day that it is declared.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 94
  • 1997, c. 10, s. 213
  • 2000, c. 30, s. 61
  • 2006, c. 4, s. 22

Marginal note:Deduction for rebate

  •  (1) If, in the circumstances described in subsection 252.41(2), 254(4), 254.1(4) or 258.1(3) or in circumstances prescribed for the purposes of subsection 256.21(3), a particular person pays to or credits in favour of another person an amount on account of a rebate and transmits the application of the other person for the rebate to the Minister in accordance with subsection 252.41(2), 254(5), 254.1(5), 256.21(4) or 258.1(4), as the case requires, the particular person may deduct the amount in determining the net tax of the particular person for the reporting period in which the amount is paid or credited.

  • Marginal note:Deduction for rebate in respect of supplies to non-residents

    (2) If, in the circumstances described in subsection 252(3) or 252.4(2) or (4), a registrant pays to, or credits in favour of, a person an amount on account of a rebate referred to therein, the registrant may deduct the amount in determining the net tax of the registrant for

    • (a) the reporting period of the registrant that includes the particular day that is the later of the last day on which any tax to which the rebate relates became payable and the day on which the amount is paid or credited; or

    • (b) any subsequent reporting period of the registrant for which a return is filed within one year after the particular day.

  • Marginal note:Late filing of information and adjustment for failure to file

    (2.1) If a registrant is required to file prescribed information in accordance with subsection 252.4(5) in respect of an amount claimed as a deduction under subsection (2) in respect of an amount paid or credited on account of a rebate,

    • (a) in the case where the registrant files the information on a day (in this subsection referred to as the “filing day”) that is after the day on or before which the registrant is required to file its return under Division V for the reporting period in which the registrant claimed the deduction under subsection (2) in respect of the amount paid or credited and before the particular day that is the earlier of

      • (i) the day that is four years after the day on or before which the registrant was required under section 238 to file a return for the period, and

      • (ii) the day stipulated by the Minister in a demand to file the information,

      the registrant shall, in determining the net tax for the reporting period of the registrant that includes the filing day, add an amount equal to interest, at the prescribed rate, on the amount claimed as a deduction under subsection (2) computed for the period beginning on the day on or before which the registrant was required to file the prescribed information under subsection 252.4(5) and ending on the filing day; and

    • (b) in the case where the registrant fails to file the information before the particular day, the registrant shall, in determining the net tax for the reporting period of the registrant that includes the particular day, add an amount equal to the total of the amount claimed as a deduction under subsection (2) and interest, at the prescribed rate, on that amount computed for the period beginning on the day on or before which the registrant was required to file the information under subsection 252.4(5) and ending on the day on or before which the registrant is required under section 238 to file a return for the reporting period of the registrant that includes the particular day.

  • Marginal note:Deduction in respect of supply in a participating province

    (3) Where a registrant makes a supply in a participating province and the registrant pays to, or credits in favour of, the recipient of the supply a prescribed amount in respect of the supply, the registrant may deduct that amount in determining the net tax of the registrant for the reporting period of the registrant in which the amount was paid or credited.

  • Marginal note:Restriction on input tax credits etc. for amounts paid or credited

    (4) No amount of tax under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 shall be included in determining any input tax credit, rebate, refund or remission under this or any other Act of Parliament where the amount is prescribed for the purposes of subsection (3).

  • Marginal note:Deduction for rebate payable to segregated fund

    (5) Where, in the circumstances described in subsection 261.31(5), an insurer pays to, or credits in favour of, a segregated fund of the insurer an amount on account of a rebate referred to therein and transmits the application of the segregated fund for the rebate to the Minister in accordance with subsection 261.31(6), the insurer may deduct the amount in determining the net tax of the insurer for the reporting period of the insurer in which the amount was paid or credited.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 95
  • 1997, c. 10, ss. 52, 214
  • 2000, c. 30, s. 62
  • 2007, c. 29, s. 45
  • 2009, c. 32, s. 22
  • 2017, c. 20, s. 36
 
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