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

Marginal note:Lease, etc. of property

• 136.1 (1) For the purposes of this Part, where a supply of property is made by way of lease, licence or similar arrangement to a person for consideration that includes a payment that is attributable to a period (in this subsection referred to as the “lease interval”) that is the whole or a part of the period during which possession or use of the property is provided under the arrangement,

  • (a) the supplier is deemed to have made, and the person is deemed to have received, a separate supply of the property for the lease interval;

  • (b) the supply of the property for the lease interval is deemed to be made on the earliest of

    • (i) the first day of the lease interval,

    • (ii) the day on which the payment that is attributable to the lease interval becomes due, and

    • (iii) the day on which the payment that is attributable to the lease interval is paid;

  • (c) the payment that is attributable to the lease interval is deemed to be consideration payable in respect of the supply of the property for the lease interval; and

  • (d) if, in the absence of paragraph (a), the supply of the property under the arrangement would be deemed to be made in or outside Canada, all of the supplies of the property that are, because of that paragraph, deemed to be made under the arrangement are deemed to be made in or outside Canada, as the case may be.

• Marginal note:Delivery on exercise of option

  (1.1) For the purposes of this Part, if a recipient of a supply by way of lease, licence or similar arrangement of tangible personal property exercises an option to purchase the property that is provided for under the arrangement and the recipient begins to have possession of the property under the agreement of purchase and sale of the property at the same time and place as the recipient ceases to have possession of the property as lessee or licensee under the arrangement, that time and place is, for greater certainty, deemed to be the time and place at which the property is delivered or made available to the recipient in respect of the supply by way of sale of the property to the recipient.

• Marginal note:Ongoing services

  (2) For the purposes of this Part, where a supply of a service is made to a person for consideration that includes a payment that is attributable to a period (in this subsection referred to as a “billing period”) that is the whole or a part of the period during which the service is or is to be rendered under the agreement for the supply,

  • (a) the supplier is deemed to have made, and the person is deemed to have received, a separate supply of the service for the billing period;

  • (b) the supply of the service for the billing period is deemed to be made on the earliest of

    • (i) the first day of the billing period,

    • (ii) the day on which the payment that is attributable to the billing period becomes due, and

    • (iii) the day on which the payment that is attributable to the billing period is made;

  • (c) the payment that is attributable to the billing period is deemed to be consideration payable in respect of the supply of the service for the billing period; and

  • (d) if, in the absence of paragraph (a), the supply of the service under the agreement would be deemed to be made in or outside Canada, all of the supplies of the service that are, because of that paragraph, deemed to be made under the agreement are, except in the case of a telecommunication service, deemed to be made in or outside Canada, as the case may be.

Marginal note:Supply of real property partly outside province

136.2 For the purposes of determining in which participating province, if any, a taxable supply of real property is made and determining the tax payable, if any, under subsection 165(2) in respect of the supply for the purposes of this Part, where the supply includes the provision of real property situated in a particular province and real property situated in another province or outside Canada, the provision of the part of the real property that is situated in the particular province and the provision of the part of the real property that is situated in the other province or outside Canada, as the case may be, are each deemed to be a separate taxable supply made for separate consideration equal to the portion of the total consideration for all the property that is reasonably attributable to the part.

Marginal note:Separate supplies of freight services

136.3 For the purposes of determining, for the purposes of this Part, the tax payable, if any, under subsection 165(2) in respect of a supply of a freight transportation service (within the meaning of Part VI of Schedule IX) that includes the provision of a service of transporting particular tangible personal property to a destination in a province and other tangible personal property to a destination outside the province and determining in which participating province, if any, the supply is made, the provision of the service of transporting the particular property and the provision of the service of transporting the other property are each deemed to be a separate supply made for separate consideration equal to the portion of the total consideration for the supply that is reasonably attributable to the transportation of the particular property or other property, as the case may be.

Definition telecommunications channel

• 136.4 (1) In this section, telecommunications channel means a telecommunications circuit, line, frequency, channel, partial channel or other means of sending or receiving a telecommunication but does not include a satellite channel.

• Marginal note:Dedicated telecommunications channel

  (2) For the purposes of this Part, where a person supplies a telecommunication service of granting to the recipient of the supply sole access to a telecommunications channel for transmitting telecommunications between a place in a particular province and a place in another province,

  • (a) the person is deemed to have made a separate supply of the service in each of those two provinces and in each province, if any, that is between those provinces; and

  • (b) the consideration for the supply in each province is deemed to be equal to the amount determined by the formula

    (A/B) × C

    where

    A

    is the distance over which the telecommunications would be transmitted in that province if the telecommunications were transmitted solely by means of cable and related telecommunications facilities located in Canada that connected, in a direct line, the transmitters for emitting and receiving the telecommunications,

    B

    is the distance over which the telecommunications would be transmitted in Canada if the telecommunications were transmitted solely by such means, and

    C

    is the total consideration paid or payable by the recipient for the sole access to the telecommunications channel.

Marginal note:Coverings and containers

137 For the purposes of this Part, where tangible personal property of a particular class is supplied in a covering or container that is usual for that class of property, the covering or container shall be deemed to form part of the property so supplied.

Marginal note:Incidental supplies

138 For the purposes of this Part, where

• (a) a particular property or service is supplied together with any other property or service for a single consideration, and

• (b) it may reasonably be regarded that the provision of the other property or service is incidental to the provision of the particular property or service,

the other property or service shall be deemed to form part of the particular property or service so supplied.

Marginal note:Financial services in mixed supply

139 For the purposes of this Part, where

• (a) one or more financial services are supplied together with one or more other services that are not financial services, or with properties that are not capital properties of the supplier, for a single consideration,

• (b) the financial services are related to the other services or the properties, as the case may be,

• (c) it is the usual practice of the supplier to supply those or similar services, or those or similar properties and services, together in the ordinary course of the business of the supplier, and

• (d) the total of all amounts, each of which would be the consideration for a financial service so supplied if that financial service had been supplied separately, is greater than 50% of the total of all amounts, each of which would be the consideration for a service or property so supplied if that service or property had been supplied separately,

the supply of each of the services and properties shall be deemed to be a supply of a financial service.

Marginal note:Supply of membership with security

140 For the purposes of this Part, where

• (a) a person makes a supply of a share, bond, debenture or other security (other than a share in a credit union or in a cooperative corporation the main purpose of which is not to provide dining, recreational or sporting facilities) that represents capital stock or debt of a particular organization, and

• (b) ownership of the security by the recipient of the supply is a condition of the recipient’s, or another person’s, obtaining a membership, or a right to acquire a membership, in the particular organization or in another organization that is related to the particular organization,

the supply of the security shall be deemed to be a supply of a membership and not a supply of a financial service.

Marginal note:Use in commercial activities

• 141 (1) For the purposes of this Part, where substantially all of the consumption or use of property or a service by a person, other than a financial institution, is in the course of the person’s commercial activities, all of the consumption or use of the property or service by the person shall be deemed to be in the course of those activities.

• Marginal note:Intended use in commercial activities

  (2) For the purposes of this Part, where substantially all of the consumption or use for which a person, other than a financial institution, acquires or imports property or a service or brings it into a participating province is in the course of the person’s commercial activities, all of the consumption or use for which the person acquired or imported the property or service or brought it into the province, as the case may be, is deemed to be in the course of those activities.

• Marginal note:Use in other activities

  (3) For the purposes of this Part, where substantially all of the consumption or use of property or a service by a person, other than a financial institution, is in the course of particular activities of the person that are not commercial activities, all of the consumption or use of the property or service by the person shall be deemed to be in the course of those particular activities.

• Marginal note:Intended use in other activities

  (4) For the purposes of this Part, where substantially all of the consumption or use for which a person, other than a financial institution, acquires or imports property or a service or brings it into a participating province is in the course of particular activities of the person that are not commercial activities, all of the consumption or use for which the person acquired or imported the property or service or brought it into the province, as the case may be, is deemed to be in the course of those particular activities.

• Marginal note:Real property that includes residential complex

  (5) For the purposes of subsections (1) to (4), where real property includes a residential complex and another part that is not part of the residential complex,

  • (a) the residential complex and the other part shall each be deemed to be a separate property; and

  • (b) where property or a service is acquired, imported or brought into a participating province for consumption or use in relation to the real property, subsections (1) to (4) apply to the property or service only to the extent it is acquired, imported or brought into the province, as the case may be, for consumption or use in relation to the part that is not part of the residential complex.

Marginal note:Meaning of endeavour

• 141.01 (1) In this section, endeavour of a person means

  • (a) a business of the person;

  • (b) an adventure or concern in the nature of trade of the person; or

  • (c) the making of a supply by the person of real property of the person, including anything done by the person in the course of or in connection with the making of the supply.

• Marginal note:Meaning of consideration

  (1.1) In subsections (1.2), (2) and (3), consideration does not include nominal consideration.

• Marginal note:Grants and subsidies

  (1.2) Where a registrant receives an amount that is not consideration for a supply and is a grant, subsidy, forgivable loan or other form of assistance provided by a person who is

  • (a) a government, a municipality or a band (within the meaning assigned by section 2 of the Indian Act),

  • (b) a corporation that is controlled by a person referred to in paragraph (a) and one of the main purposes of which is to provide such assistance, or

  • (c) a trust, board, commission or other body that is established by a person referred to in paragraph (a) or (b) and one of the main purposes of which is to provide such assistance,

  and the assistance can reasonably be considered to be provided for the purpose of funding an activity of the registrant that involves the making of taxable supplies for no consideration, the amount is, for the purposes of this section, deemed to be consideration for those supplies.

• Marginal note:Acquisition for purpose of making supplies

  (2) Where a person acquires or imports property or a service or brings it into a participating province for consumption or use in the course of an endeavour of the person, the person shall, for the purposes of this Part, be deemed to have acquired or imported the property or service or brought it into the province, as the case may be,

  • (a) for consumption or use in the course of commercial activities of the person, to the extent that the property or service is acquired, imported or brought into the province by the person for the purpose of making taxable supplies for consideration in the course of that endeavour; and

  • (b) for consumption or use otherwise than in the course of commercial activities of the person, to the extent that the property or service is acquired, imported or brought into the province by the person

    • (i) for the purpose of making supplies in the course of that endeavour that are not taxable supplies made for consideration, or

    • (ii) for a purpose other than the making of supplies in the course of that endeavour.

• Marginal note:Use for purpose of making supplies

  (3) Where a person consumes or uses property or a service in the course of an endeavour of the person, that consumption or use shall, for the purposes of this Part, be deemed to be

  • (a) in the course of commercial activities of the person, to the extent that the consumption or use is for the purpose of making taxable supplies for consideration in the course of that endeavour; and

  • (b) otherwise than in the course of commercial activities of the person, to the extent that the consumption or use is

    • (i) for the purpose of making supplies in the course of that endeavour that are not taxable supplies made for consideration, or

    • (ii) for a purpose other than the making of supplies in the course of that endeavour.

• Marginal note:Free supplies

  (4) Where

  • (a) a supplier makes a taxable supply (in this subsection referred to as a “free supply”) of property or a service for no consideration or nominal consideration in the course of a particular endeavour of the supplier, and

  • (b) it can reasonably be regarded that among the purposes (in this subsection referred to as the “specified purposes”) for which the free supply is made is the purpose of facilitating, furthering or promoting

    • (i) the acquisition, consumption or use of other property or services by any other person, or

    • (ii) an endeavour of any person,

  the following rules apply:

  • (c) to the extent that the supplier acquired or imported a particular property or service or brought it into a participating province for the purpose of making the free supply of that property or service or for consumption or use in the course of making the free supply, the supplier shall be deemed, for the purposes of subsection (2), to have acquired or imported the particular property or service or brought it into the province, as the case may be,

    • (i) for use in the course of the particular endeavour, and

    • (ii) for the specified purposes and not for the purpose of making the free supply, and

  • (d) to the extent that the supplier consumed or used a particular property or service for the purpose of making the free supply, the supplier shall be deemed, for the purposes of subsection (3), to have consumed or used the particular property or service for the specified purposes and not for the purpose of making the free supply.

• Marginal note:Method of determining extent of use, etc.

  (5) Subject to section 141.02, the methods used by a person in a fiscal year to determine

  • (a) the extent to which properties or services are acquired, imported or brought into a participating province by the person for the purpose of making taxable supplies for consideration or for other purposes, and

  • (b) the extent to which the consumption or use of properties or services is for the purpose of making taxable supplies for consideration or for other purposes,

  shall be fair and reasonable and shall be used consistently by the person throughout the year.

• Marginal note:Application to other provisions

  (6) Where

  • (a) a particular provision of this Part, other than subsections (2) to (4), deems certain circumstances or facts to exist, and

  • (b) that deeming is dependent, in whole or in part, on the particular circumstance that property or a service is or was consumed or used, or acquired, imported or brought into a participating province for consumption or use, to a certain extent in the course of, or otherwise than in the course of, commercial activities or other activities,

  that certain extent shall be determined under subsection (2) or (3), as the case requires, for the purpose of determining whether the particular circumstance exists, but where it is so determined that the particular circumstance exists and all other circumstances necessary for the particular provision to apply exist, the deeming by the particular provision shall apply notwithstanding subsections (2) and (3).

• Marginal note:Idem

  (7) Where a provision of this Part deems the consideration for a supply not to be consideration for the supply, a supply to be made for no consideration or a supply not to have been made by a person, that deeming shall not apply for the purposes of any of subsections (1) to (4).