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

Full Document:  

Act current to 2022-11-16 and last amended on 2022-10-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION VCollection and Remittance of Division II Tax (continued)

SUBDIVISION BRemittance of Tax (continued)

Marginal note:Selected listed financial institutions

  •  (1) For the purposes of this Part, a financial institution is a selected listed financial institution throughout a reporting period in a fiscal year that ends in a taxation year of the financial institution if the financial institution is

    • (a) a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) during the taxation year; and

    • (b) a prescribed financial institution throughout the reporting period.

  • Marginal note:Adjustment to net tax

    (2) In determining the net tax for a particular reporting period in a fiscal year that ends in a taxation year of a selected listed financial institution of a prescribed class, the financial institution shall add all positive amounts, and may deduct all negative amounts, each of which is determined, for a participating province, by the formula

    [(A - B) × C × (D/E)] - F + G

    where

    A
    is the total of
    • (a) all tax (other than a prescribed amount of tax) that became payable under any of subsection 165(1) and sections 212, 218 and 218.01 by the financial institution during the particular reporting period or that was paid by the financial institution during the particular reporting period without having become payable,

    • (b) all amounts each of which is tax under subsection 165(1) in respect of a supply (other than a supply to which paragraph (c) applies) made by a person (other than a prescribed person or a person of a prescribed class) to the financial institution that would, in the absence of an election made under section 150, have become payable by the financial institution during the particular reporting period, and

    • (c) all amounts each of which is an amount — in respect of a supply of property or a service that is made during the particular reporting period by another person to the financial institution and to which the financial institution has elected to have this paragraph apply — equal to tax calculated at the rate set out in subsection 165(1) on the cost to the other person of supplying the property or service to the financial institution excluding any remuneration to employees of the other person, the cost of financial services and tax under this Part;

    B
    is the total of
    • (a) all input tax credits (other than input tax credits in respect of an amount of tax that is prescribed for the purposes of paragraph (a) of the description of A) of the financial institution for the particular reporting period or preceding reporting periods of the financial institution claimed by the financial institution in the return under this Division filed by the financial institution for the particular reporting period, and

    • (b) all amounts each of which would be an input tax credit of the financial institution for the particular reporting period of the financial institution in respect of property or a service if tax became payable during the particular reporting period in respect of the supply of the property or service equal to the amount included for the particular reporting period under paragraph (b) or (c) of the description of A in respect of the supply;

    C
    is the financial institution’s percentage for the participating province for the taxation year, determined in accordance with the prescribed rules that apply to financial institutions of that class;
    D
    is the tax rate for the participating province;
    E
    is the rate set out in subsection 165(1);
    F
    is the total of
    • (a) all amounts of tax (other than a prescribed amount of tax) under subsection 165(2) in respect of supplies made in the participating province to the financial institution, or under section 212.1 calculated at the tax rate for the participating province, that

      • (i) became payable, or were paid without having become payable, by the financial institution during

        • (A) the particular reporting period, or

        • (B) any other reporting period of the financial institution that precedes the particular reporting period, provided that

          • (I) the particular reporting period ends within two years after the end of the financial institution’s fiscal year that includes the other reporting period, and

          • (II) the financial institution was a selected listed financial institution throughout the other reporting period,

      • (ii) were not included in determining the positive or negative amounts that the financial institution is required to add, or may deduct, under this subsection in determining its net tax for any reporting period of the financial institution other than the particular reporting period, and

      • (iii) are claimed by the financial institution in a return under this Division filed by the financial institution for the particular reporting period, and

    • (b) all amounts each of which is an amount — in respect of a supply of property or a service that is made during the particular reporting period by another person to the financial institution and to which the financial institution has elected to have paragraph (c) of the description of A apply — equal to tax payable by the other person under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 that is included in the cost to the other person of supplying the property or service to the financial institution; and

    G
    is the total of all amounts each of which is a positive or negative prescribed amount.
  • Marginal note:Exclusions from adjustment

    (3) In determining an amount that a selected listed financial institution is required to add or may deduct under subsection (2) in determining its net tax,

    • (a) tax that the financial institution is deemed to have paid under any of subsections 171(1), 171.1(2), 206(2) and (3) and 208(2) and (3) shall be excluded from the totals for A and F in the formula in subsection (2);

    • (b) input tax credits in respect of tax referred to in paragraph (a) and input tax credits that the financial institution is permitted to claim under subsection 193(1) or (2) shall be excluded from the total for B in that formula; and

    • (c) no amount of tax paid or payable by the financial institution in respect of property or services acquired, imported or brought into a participating province otherwise than for consumption, use or supply in the course of an endeavour (as defined in subsection 141.01(1)) of the financial institution shall be included.

  • Marginal note:Election

    (4) If a person, other than a prescribed person or a person of a prescribed class, and a selected listed financial institution have made jointly an election under section 150, the financial institution may make an election, in prescribed form containing prescribed information, to have paragraph (c) of the description of A in subsection (2) apply to every supply to which subsection 150(1) applies that is made by the person to the financial institution at a time the election made under this subsection is in effect.

  • (5) [Repealed, 2017, c. 33, s. 131]

  • Marginal note:Effective period of election

    (6) An election made under subsection (4) by a selected listed financial institution in respect of supplies made by a person to the financial institution shall be effective for the period beginning on the day specified in the election and ending on the earliest of

    • (a) the day the election made jointly by the person and the financial institution under section 150 ceases to be effective,

    • (b) the day specified in a revocation of the election made under subsection (6.1),

    • (c) the day the person becomes a prescribed person, or a person of a prescribed class, for the purposes of subsection (4), and

    • (d) the day the financial institution ceases to be a selected listed financial institution.

  • Marginal note:Revocation

    (6.1) A selected listed financial institution that has made an election under subsection (4) may revoke the election, in prescribed form containing prescribed information, effective on the day specified in the revocation, which day is at least 365 days after the day on which the election becomes effective.

  • Marginal note:Notice of election

    (6.2) If a particular selected listed financial institution has made an election under subsection (4) in respect of supplies made by another selected listed financial institution to the particular financial institution, the particular financial institution shall, in a manner satisfactory to the Minister,

    • (a) notify the other financial institution of the election and of the day it becomes effective on or before that day or any later day that the Minister may allow; and

    • (b) if the election ceases to be effective, notify the other financial institution of the day that the election ceases to be effective on or before that day or any later day that the Minister may allow.

  • Marginal note:Information requirements

    (7) For the purposes of this section, subsections 169(4) and (5) and 223(2) apply with respect to any amount that is included in the description of F in subsection (2) as if that amount were an input tax credit.

  • (8) [Repealed, 2012, c. 31, s. 79]

  • Marginal note:Regulations — selected listed financial institutions

    (9) The Governor in Council may make regulations

    • (a) requiring any person or any class of persons to provide to a person any information that is required to allow a selected listed financial institution to determine the value of an element of a formula in subsection (2) or 237(5) or in any other provision of this Part or of a regulation made under this Part, specifying what information is to be provided, prescribing compliance measures in respect of that provision of information, and prescribing joint and several, or solidary, liability or penalties for failing to provide that information when and as required;

    • (b) allowing a person and a selected listed financial institution to make an election in respect of the filing of the returns of the person or the financial institution, specifying the circumstances in which that election may be revoked, prescribing compliance measures or other requirements in respect of that filing, and prescribing joint and several, or solidary, liability or penalties in respect of that filing; or

    • (c) requiring any selected listed financial institution to register under Subdivision D for the purposes of this Part or deeming any selected listed financial institution to be a registrant for the purposes of this Part.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1997, c. 10, s. 208
  • 2000, c. 30, s. 54
  • 2006, c. 4, s. 21
  • 2007, c. 18, s. 27
  • 2009, c. 32, s. 20
  • 2010, c. 12, s. 70
  • 2012, c. 31, s. 79
  • 2017, c. 33, s. 131

Marginal note:Definitions

  •  (1) In this section, exchange-traded fund, exchange-traded series, non-stratified investment plan and stratified investment plan have the meaning prescribed by regulation.

  • Marginal note:Application to Minister

    (2) A selected listed financial institution that is an exchange-traded fund may apply to the Minister to use particular methods, for a fiscal year that ends in a taxation year of the financial institution, to determine

    • (a) if the financial institution is a stratified investment plan, the financial institution’s percentages for the purposes of subsection 225.2(2) for each exchange-traded series of the financial institution, for each participating province and for the taxation year; and

    • (b) if the financial institution is a non-stratified investment plan, the financial institution’s percentages for the purposes of subsection 225.2(2) for each participating province and for the taxation year.

  • Marginal note:Form and manner of application

    (3) An application made by a selected listed financial institution under subsection (2) is to be

    • (a) made in prescribed form containing prescribed information, including

      • (i) if the financial institution is a stratified investment plan, the particular methods to be used for each exchange-traded series of the financial institution, and

      • (ii) if the financial institution is a non-stratified investment plan, the particular methods to be used for the financial institution; and

    • (b) filed by the financial institution with the Minister in prescribed manner on or before

      • (i) the day that is 180 days before the first day of the fiscal year for which the application is made, or

      • (ii) any later day that the Minister may allow.

  • Marginal note:Authorization

    (4) On receipt of an application made under subsection (2), the Minister must

    • (a) consider the application and authorize or deny the use of the particular methods; and

    • (b) notify the selected listed financial institution in writing of the decision on or before

      • (i) the later of

        • (A) the day that is 180 days after the receipt of the application, and

        • (B) the day that is 180 days before the first day of the fiscal year for which the application is made, or

      • (ii) any later day that the Minister may specify, if the day is set out in a written application filed by the financial institution with the Minister.

  • Marginal note:Effect of authorization

    (5) If the Minister authorizes under subsection (4) the use of particular methods for a fiscal year of the selected listed financial institution,

    • (a) despite Part 2 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

      • (i) the financial institution’s percentages for any participating province and for the taxation year in which the fiscal year ends that would, in the absence of this section, be determined under that Part are to be determined in accordance with those particular methods, and

      • (ii) the financial institution’s percentages for any exchange-traded series of the financial institution, for any participating province and for the taxation year in which the fiscal year ends that would, in the absence of this section, be determined under that Part are to be determined in accordance with those particular methods; and

    • (b) the financial institution must consistently, throughout the fiscal year, use those particular methods as indicated in the application to determine the percentages referred to in paragraph (a).

  • Marginal note:Revocation

    (6) An authorization granted under subsection (4) to a selected listed financial institution in respect of a fiscal year of the financial institution ceases to have effect on the first day of the fiscal year and, for the purposes of this Part, is deemed never to have been granted, if

    • (a) the Minister revokes the authorization and sends a notice of revocation to the financial institution at least 60 days before the first day of the fiscal year; or

    • (b) the financial institution files with the Minister in prescribed manner a notice of revocation in prescribed form containing prescribed information on or before the first day of the fiscal year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2012, c. 31, s. 80

Marginal note:Definitions

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

    business input

    business input has the same meaning as in subsection 141.02(1). (intrant d’entreprise)

    Canadian activity

    Canadian activity has the same meaning as in section 217. (activité au Canada)

    exclusive input

    exclusive input of a person means property or a service that is acquired or imported by the person for consumption or use directly and exclusively for the purpose of making taxable supplies for consideration or directly and exclusively for purposes other than making taxable supplies for consideration. (intrant exclusif)

  • Marginal note:Prescribed definitions

    (2) In this section, exchange-traded fund, exchange-traded series, individual, investment plan, non-stratified investment plan, plan member, private investment plan, series, specified investor, stratified investment plan and unit have the meaning prescribed by regulation.

  • Marginal note:Stratified investment plans

    (3) If a selected listed financial institution is a stratified investment plan and no election under subsection (6) in respect of a series of the financial institution is in effect throughout a fiscal year of the financial institution that ends in a calendar year, the following rules apply:

    • (a) for the purposes of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

      • (i) if the series is an exchange-traded series, all units of the series that are held, at a particular time in the fiscal year, by a person that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individual that is resident in Canada but not resident in any participating province,

      • (ii) if the series is not an exchange-traded series, all units of the series that are held, at a particular time in the fiscal year, by an individual, or a specified investor in the financial institution, that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individual that is resident in Canada but not resident in any participating province, and

      • (iii) the financial institution is deemed to know, on December 31 of the calendar year, the province in which the particular individual referred to in subparagraph (i) or (ii) is resident;

    • (b) for the purposes of determining an input tax credit of the financial institution, any supply made during the fiscal year by the financial institution in respect of units of the series that are held by a person that is not resident in Canada is deemed to have been made to a person resident in Canada;

    • (c) for the purposes of the definitions external charge and qualifying consideration in section 217, any outlay made, or expense incurred, by the financial institution during the fiscal year in respect of units of the series that are held by a person that is not resident in Canada is deemed to be applicable to a Canadian activity of the financial institution; and

    • (d) no amount of tax in respect of a business input of the financial institution that becomes payable by the financial institution during the fiscal year or that is paid by the financial institution during the fiscal year without having become payable is to be included in determining an input tax credit of the financial institution if the business input

      • (i) is acquired or imported for consumption, use or supply in the course of any activity relating to the series, or

      • (ii) is not an exclusive input of the financial institution.

  • Marginal note:Non-stratified investment plans

    (4) If a selected listed financial institution is a non-stratified investment plan and no election under subsection (7) made by the financial institution is in effect throughout a fiscal year of the financial institution that ends in a calendar year, the following rules apply:

    • (a) for the purposes of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

      • (i) if the financial institution is an exchange-traded fund, all units of the financial institution that are held, at a particular time in the fiscal year, by a person that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individual that is resident in Canada but not resident in any participating province,

      • (ii) if the financial institution is not an exchange-traded fund, all units of the financial institution that are held, at a particular time in the fiscal year, by an individual, or a specified investor in the financial institution, that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individual that is resident in Canada but not resident in any participating province, and

      • (iii) the financial institution is deemed to know, on December 31 of the calendar year, the province in which the particular individual referred to in subparagraph (i) or (ii) is resident;

    • (b) for the purposes of determining an input tax credit of the financial institution, any supply made during the fiscal year by the financial institution in respect of units of the financial institution that are held by a person that is not resident in Canada is deemed to have been made to a person resident in Canada;

    • (c) for the purposes of the definitions external charge and qualifying consideration in section 217, any outlay made, or expense incurred, by the financial institution during the fiscal year in respect of units of the financial institution that are held by a person that is not resident in Canada is deemed to be applicable to a Canadian activity of the financial institution; and

    • (d) no amount of tax in respect of a business input of the financial institution that becomes payable by the financial institution during the fiscal year or that is paid by the financial institution during the fiscal year without having become payable is to be included in determining an input tax credit of the financial institution if the business input is not an exclusive input of the financial institution.

  • Marginal note:Pension entities and private investment plans

    (5) If a selected listed financial institution is an investment plan that is a pension entity of a pension plan or a private investment plan and no election under subsection (7) made by the financial institution is in effect throughout a fiscal year of the financial institution that ends in a calendar year, the following rules apply:

    • (a) for the purposes of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

      • (i) all plan members of the financial institution that the financial institution knows, on December 31 of the calendar year, are not resident in Canada at a particular time in the fiscal year are deemed to be resident in Canada at the particular time but not resident in any participating province, and

      • (ii) the financial institution is deemed to know, on December 31 of the calendar year, the province in which each of the plan members referred to in subparagraph (i) is resident;

    • (b) for the purposes of determining an input tax credit of the financial institution, any supply made during the fiscal year by the financial institution in respect of plan members of the financial institution that are not resident in Canada is deemed to have been made to a person resident in Canada;

    • (c) for the purposes of the definitions external charge and qualifying consideration in section 217, any outlay made, or expense incurred, by the financial institution during the fiscal year in respect of plan members of the financial institution that are not resident in Canada is deemed to be applicable to a Canadian activity of the financial institution; and

    • (d) no amount of tax in respect of a business input of the financial institution that becomes payable by the financial institution during the fiscal year or that is paid by the financial institution during the fiscal year without having become payable is to be included in determining an input tax credit of the financial institution if the business input is not an exclusive input of the financial institution.

  • Marginal note:Election — stratified investment plans

    (6) A stratified investment plan may make an election in respect of a series of the investment plan to have subsection (3) not apply to the series, and that election is to be effective from the first day of a fiscal year of the investment plan.

  • Marginal note:Election — other investment plans

    (7) A person that is a non-stratified investment plan, a pension entity or a private investment plan may make an election to have subsection (4) or (5), as the case may be, not apply to the person, and that election is to be effective from the first day of a fiscal year of the person.

  • Marginal note:Form of election

    (8) An election made under subsection (6) or (7) by a person is to

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

    • (b) set out the first fiscal year of the person during which the election is to be in effect; and

    • (c) be filed with the Minister in prescribed manner on or before the first day of that first fiscal year or any later day that the Minister may allow.

  • Marginal note:Cessation

    (9) An election made under subsection (6) or (7) by a person ceases to have effect on the earliest of

    • (a) the first day of the fiscal year of the person in which the person ceases to be a selected listed financial institution,

    • (b) in the case of an election made under subsection (6), the first day of the fiscal year of the person in which the person ceases to be a stratified investment plan,

    • (c) in the case of an election made under subsection (7), the first day of the fiscal year of the person in which the person ceases to be a non-stratified investment plan, a pension entity or a private investment plan, as the case may be, and

    • (d) the day on which a revocation of the election becomes effective.

  • Marginal note:Revocation

    (10) A person that has made an election under subsection (6) or (7) may revoke the election, effective on the first day of a fiscal year of the person that begins at least five years after the election becomes effective, or on the first day of any earlier fiscal year as the Minister may allow on application by the person, by filing with the Minister in prescribed manner a notice of revocation in prescribed form containing prescribed information no later than the day on which the revocation is to become effective.

  • Marginal note:Restriction

    (11) If a revocation of an election made under subsection (6) or (7) by a person becomes effective on a particular day, any subsequent election under that subsection is not a valid election unless the first day of the fiscal year of the person set out in the subsequent election is a day that is at least five years after the particular day or any earlier day as the Minister may allow on application by the person.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2012, c. 31, s. 80
 
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