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

Marginal note:Deduction for rebate

• 234 (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.

Marginal note:Net tax where passenger vehicle leased

• 235 (1) If, in a taxation year of a registrant, tax becomes payable, or is paid without having become payable, by the registrant in respect of supplies of a passenger vehicle made under a lease and

  • (a) the total of the consideration for the supplies that would be deductible in computing the registrant’s income for the year for the purposes of the Income Tax Act, if the registrant were a taxpayer under that Act and that Act were read without reference to section 67.3,

  exceeds

  • (b) the amount in respect of that consideration that would be deductible in computing the registrant’s income for the year for the purposes of the Income Tax Act, if the registrant were a taxpayer under that Act and the formulae in paragraph 7307(1)(b), subsection 7307(1.1) and paragraph 7307(3)(b) of the Income Tax Regulations were read without reference to the description of B,

  there shall be added in determining the net tax for the appropriate reporting period of the registrant an amount determined by the formula

  A × B × C

  where

  A

  is the ratio obtained by dividing that excess by that consideration,

  B

  is

  • (a) if the registrant is a selected listed financial institution in the appropriate reporting period, the tax paid or payable under any of subsection 165(1) and sections 212 and 218 in respect of that consideration (other than tax that, by reason of section 170, may not be included in determining an input tax credit of the registrant), and

  • (b) in any other case, the tax paid or payable in respect of that consideration (other than tax that, by reason of section 170, may not be included in determining an input tax credit of the registrant), and

  C

  is the proportion of the total use of the vehicle that is use in commercial activities of the registrant.

• Marginal note:Appropriate reporting periods

  (2) For the purposes of subsection (1), the appropriate reporting period of a registrant in respect of a supply by way of lease to the registrant of a passenger vehicle in a taxation year of the registrant is

  • (a) where the registrant ceases in or at the end of that taxation year to be registered under Subdivision D, the last reporting period of the registrant in that year;

  • (b) where the reporting period of the registrant in that taxation year is that taxation year, that reporting period; and

  • (c) in any other case, the reporting period of the registrant that begins immediately after that taxation year.

Marginal note:Food, beverages and entertainment

• 236 (1) If

  • (a) an amount (in this subsection referred to as the “composite amount”)

    • (i) becomes due from a person, or is a payment made by a person without having become due, in respect of a supply of property or a service made to the person, or

    • (ii) is paid by a person as an allowance or reimbursement in respect of which the person is deemed under section 174 or 175 to have received a supply of property or a service,

  • (b) one or both of the following situations apply:

    • (i) subsection 67.1(1) of the Income Tax Act applies, or would apply, if the person were a taxpayer under that Act, to all of the composite amount or that part of it that is, for the purposes of that Act, an amount (other than an amount to which subsection 67.1(1.1) of that Act applies) paid or payable in respect of the human consumption of food or beverages or the enjoyment of entertainment and section 67.1 of that Act deems the composite amount or that part to be 50% of a particular amount,

    • (ii) subsection 67.1(1.1) of that Act applies, or would apply, if the person were a taxpayer under that Act, to all of the composite amount or that part of it that is, for the purposes of that Act, an amount paid or payable in respect of the consumption of food or beverages by a long-haul truck driver during the driver’s eligible travel period (as those terms are defined in section 67.1 of that Act), and section 67.1 of that Act deems the composite amount or that part to be a percentage of a specified particular amount, and

  • (c) tax included in the composite amount or deemed under section 174 or 175 to have been paid by the person is included in determining an input tax credit in respect of the property or service that is claimed by the person in a return for a reporting period in a fiscal year of the person,

  the person shall, in determining the net tax for the appropriate reporting period of the person, add the amount determined by the formula

  [50% × (A/B) × C] + [20% × (D/B) × C]

  where

  A

  is

  • (i) in the case where subparagraph (b)(i) applies, the particular amount, and

  • (ii) in any other case, zero,

  B

  is the composite amount,

  C

  is the input tax credit, and

  D

  is

  • (i) in the case where subparagraph (b)(ii) applies, the specified particular amount, and

  • (ii) in any other case, zero.

• Marginal note:Appropriate reporting period

  (1.1) Where a person is required under subsection (1) to add, in determining the person’s net tax, an amount determined by reference to an input tax credit claimed by the person in a return for a reporting period in a fiscal year of the person, for the purposes of that subsection, the appropriate reporting period of the person is

  • (a) if the person ceases to be registered under Subdivision D in a reporting period ending in that fiscal year, that reporting period;

  • (b) if that fiscal year is the person’s reporting period, that reporting period; and

  • (c) in any other case, the person’s reporting period that begins immediately after that fiscal year.

• Marginal note:Unreasonable amounts

  (1.2) If tax calculated on an amount (in this subsection referred to as the “unreasonable consideration”) that is all or part of the total amount that becomes due from a person, or is paid by a person without having become due, in respect of a supply of property or a service made to the person is, because of subsection 170(2), not to be included in determining an input tax credit, for the purposes of subsection (1), that total amount is deemed to be the amount, if any, by which it exceeds the total of the unreasonable consideration and all gratuities, and taxes, duties or fees under this Part or under an Act of the legislature of a province, that are paid or payable in respect of the unreasonable consideration.

• Marginal note:Exception

  (2) Subsection (1) does not apply to a charity or a public institution.

Marginal note:Definitions

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

  large business

  large business means a prescribed person or a person of a prescribed class. (grande entreprise)

  specified property or service

  specified property or service means a prescribed property or service, or property or a service of a prescribed class. (bien ou service déterminé)

  specified provincial input tax credit

  specified provincial input tax credit means

  • (a) the portion of an input tax credit of a large business in respect of a specified property or service that is attributable to tax under subsection 165(2), section 212.1 or 218.1 or Division IV.1 in respect of the acquisition, importation or bringing into a participating province of the specified property or service; and

  • (b) a prescribed amount in respect of an input tax credit of a large business that is attributable to tax under subsection 165(2), section 212.1 or 218.1 or Division IV.1 or in respect of an amount that would be such an input tax credit if prescribed conditions were satisfied in prescribed circumstances. (crédit de taxe sur les intrants provincial déterminé)

• Marginal note:Recapture of specified provincial input tax credits

  (2) If a sales tax harmonization agreement with the government of a participating province relating to the new harmonized value-added tax system allows for the recapture of input tax credits, in determining the net tax for the reporting period of a large business that includes a prescribed time, the large business shall add all or part, as determined in prescribed manner, of a specified provincial input tax credit of the large business.

• Marginal note:Deduction of amounts

  (3) If a sales tax harmonization agreement with the government of a participating province relating to the new harmonized value-added tax system allows for the recapture of input tax credits, in determining the net tax for the reporting period of a large business that includes a prescribed time, the large business may deduct in prescribed circumstances an amount determined in prescribed manner.

• Marginal note:Simplified method

  (4) The Governor in Council may make regulations respecting

  • (a) the methods that may be used by a large business to determine the amount that is required to be added under subsection (2) to, or that may be deducted under subsection (3) from, the net tax for a reporting period of the large business, including any conditions for the use of those methods;

  • (b) the reporting and accounting for such an amount; and

  • (c) compliance measures, including penalties, or other measures and requirements in respect of such an amount.

Marginal note:Adjustment if property not exported or supplied

236.1 If a registrant has received a zero-rated supply of a continuous transmission commodity included in section 15.2 of Part V of Schedule VI and the commodity is neither exported, as described in paragraph (a) of that section, nor supplied, as described in paragraph (b) of that section, by the registrant, the registrant shall, in determining the net tax of the registrant for the reporting period that includes the earliest day on which tax, calculated at the rate set out in subsection 165(1), would, in the absence of that section, have become payable in respect of the supply, add an amount equal to interest, at the prescribed rate, on the total amount of tax that would have been payable in respect of the supply if it were not a zero-rated supply, computed for the period beginning on that earliest day and ending on the day on or before which the return under section 238 for that reporting period is required to be filed.