Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada

Search

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

Full Document:  

Act current to 2022-09-22 and last amended on 2022-09-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION VIIMiscellaneous (continued)

SUBDIVISION B.2Export Distribution Centres

Marginal note:Definitions

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

    added property

    added property that is in the possession of a person means tangible personal property (other than property that serves as evidence of the payment of postage) or software that the person incorporates into, attaches to, combines or assembles with, or uses to pack, other property that is not property of the person held otherwise than for sale by the person. (bien d’appoint)

    base value

    base value of property that a particular person imports or obtains physical possession of in Canada from another person means

    • (a) if the particular person imports the property, the value that is or would be, but for subsection 215(2), deemed under subsection 215(1) to be the value of the property for the purposes of Division III; and

    • (b) in any other case, the fair market value of the property at the time the particular person obtains physical possession of it in Canada. (valeur de base)

    basic service

    basic service means any of the following services performed at any time in respect of goods, to the extent that, if the goods were held in a bonded warehouse at that time, it would be feasible, given the stage of processing of the goods at that time, to perform that service in the bonded warehouse and it would be permissible to do so according to the Customs Bonded Warehouses Regulations:

    • (a) disassembling or reassembling, if the goods have been assembled or disassembled for packing, handling or transportation purposes;

    • (b) displaying;

    • (c) inspecting;

    • (d) labelling;

    • (e) packing;

    • (f) removing, for the sole purpose of soliciting orders for goods or services, a small quantity of material, or a portion, a piece or an individual object, that represents the goods;

    • (g) storing;

    • (h) testing; or

    • (i) any of the following that do not materially alter the characteristics of the goods:

      • (i) cleaning,

      • (ii) complying with any applicable law of Canada or of a province,

      • (iii) diluting,

      • (iv) normal maintenance and servicing,

      • (v) preserving,

      • (vi) separating defective goods from prime quality goods,

      • (vii) sorting or grading, and

      • (viii) trimming, filing, slitting or cutting. (service de base)

    bonded warehouse

    bonded warehouse has the meaning assigned by subsection 2(1) of the Customs Act. (entrepôt de stockage)

    customer’s good

    customer’s good, in respect of a particular person, means tangible personal property of another person that the particular person imports, or obtains physical possession of in Canada, for the purpose of supplying a service or added property in respect of the tangible personal property. (produit de client)

    domestic inventory

    domestic inventory of a person means tangible personal property that the person acquires in Canada, or acquires outside Canada and imports, for the purpose of selling the property separately for consideration in the ordinary course of a business carried on by the person. (stocks intérieurs)

    export revenue

    export revenue of a particular person for a fiscal year means the total of all amounts each of which is consideration, included in determining the specified total revenue of the person for the year, for

    • (a) a supply by way of sale of an item of domestic inventory of the person that is made outside Canada or included in Part V of Schedule VI (other than sections 2.1, 3, 11, 14 and 15.1 of that Part);

    • (b) a supply by way of sale of added property acquired by the person for the purpose of processing in Canada particular property where the particular property, or all the products resulting from that processing, as the case may be, are exported, after that processing is complete, without being consumed, used, transformed or further processed, manufactured or produced in Canada by another person except to the extent reasonably necessary or incidental to the transportation of the particular property or those products; or

    • (c) a supply of a service of processing, storing or distributing tangible personal property of another person if the property, or all the products resulting from that processing, as the case may be, are exported, after the processing in Canada, if any, by the particular person is complete, without being consumed, used, transformed or further processed, manufactured or produced in Canada by any person other than the particular person except to the extent reasonably necessary or incidental to the transportation of that property or those products. (recettes d’exportation)

    export revenue percentage

    export revenue percentage of a person for a year means the proportion (expressed as a percentage) that the person’s export revenue for the year is of the person’s specified total revenue for the year. (pourcentage de recettes d’exportation)

    finished inventory

    finished inventory of a person means property of the person (other than capital property) that is in the state at which it is intended to be sold by the person, or to be used by the person as added property, in the course of a business carried on by the person. (stocks finis)

    labelling

    labelling includes marking, tagging and ticketing. (étiquetage)

    packing

    packing includes unpacking, repacking, packaging and repackaging. (emballage)

    processing

    processing includes adjusting, altering, assembling and any basic service. (traitement)

    specified total revenue

    specified total revenue of a person for a fiscal year of the person means the total of all amounts each of which is consideration, included in determining the income from a business of the person for the year, for a supply made by the person (or that would be made by the person but for any provision of this Part that deems the supply to be made by another person), other than

    • (a) a supply of a service in respect of property that the person neither imports nor obtains physical possession of in Canada for the purpose of providing the service;

    • (b) a supply by way of sale of particular property that the person acquires for the purpose of selling the particular property (or selling other property to which the particular property has been added or with which the particular property has been combined) for consideration but that is neither acquired in Canada nor imported by the person;

    • (c) a supply by way of sale of added property that the person acquires for the purpose of processing tangible personal property that the person neither imports nor obtains physical possession of in Canada; and

    • (d) a supply by way of sale of capital property of the person. (recettes totales déterminées)

    substantial alteration of property

    substantial alteration of property by a person, in respect of a fiscal year of the person, means

    • (a) manufacturing or producing, or engaging another person to manufacture or produce, property (other than capital property of the person) at any time in the year in the course of a business carried on by the person; or

    • (b) any processing undertaken by or for the person during the year to bring property of the person to a state at which the property or the product of that processing is finished inventory of the person, if

      • (i) the person’s percentage value added attributable to non-basic services in respect of finished inventory of the person for the year exceeds 10%, and

      • (ii) the person’s percentage total value added in respect of finished inventory of the person for the year exceeds 20%. (modification sensible)

  • Marginal note:Value added attributable to non-basic services in respect of finished inventory

    (2) A person’s percentage value added attributable to non-basic services in respect of finished inventory of the person for a fiscal year of the person is the amount (expressed as a percentage) determined by the formula

    A/B

    where

    A
    is the total of all amounts each of which
    • (a) is part of the total cost to the person of all property that was finished inventory of the person supplied, or used as added property, by the person during the year, and

    • (b) is reasonably attributable to

      • (i) salary, wages or other remuneration paid or payable to employees of the person, excluding any amounts that are reasonably attributable to the performance of basic services, or

      • (ii) consideration paid or payable by the person to engage other persons to perform processing, excluding any portion of such consideration that is reasonably attributed by the other persons to tangible personal property supplied in connection with that processing or that is reasonably attributable to the performance of basic services, and

    B
    is the total cost to the person of the property.
  • Marginal note:Total value added in respect of finished inventory

    (3) The percentage total value added in respect of finished inventory of a person for a fiscal year of the person is the amount (expressed as a percentage) that would be determined for the year by the formula in subsection (2) if the total for A in that subsection did not exclude any amounts that are reasonably attributable to the performance of basic services.

  • Marginal note:Value added attributable to non-basic services in respect of customers’ goods

    (4) A person’s percentage value added attributable to non-basic services in respect of customers’ goods for a fiscal year of the person is the amount (expressed as a percentage) determined by the formula

    A/(A + B)

    where

    A
    is the total of all consideration, included in determining the income from a business of the person for the year, for supplies of services, or of added property, in respect of customers’ goods, other than the portion of such consideration that is reasonably attributable to the performance of basic services or to the provision of added property used in the performance of basic services, and
    B
    is the total of the base values of the customers’ goods.
  • Marginal note:Total value added in respect of customers’ goods

    (5) A person’s percentage total value added in respect of customers’ goods for a fiscal year of the person is the percentage that would be determined for the year by the formula in subsection (4) if the total for A in that subsection did not exclude any amounts that are reasonably attributable to the performance of basic services or the provision of added property used in the performance of basic services.

  • Marginal note:Non-arm’s length transactions

    (6) For the purpose of determining a particular person’s export revenue percentage or an amount under any of subsections (2) to (5) in respect of finished inventory of a particular person or customers’ goods in respect of a particular person, if a supply between the particular person and another person with whom the particular person is not dealing at arm’s length is made for no consideration or for less than fair market value and any consideration for the supply would be included in determining the income from a business of the particular person for a year, the supply is deemed to have been made for consideration equal to fair market value and that consideration is deemed to be included in determining that income.

  • Marginal note:Export distribution centre certificate

    (7) The Minister may, on the application of a person who is registered under Subdivision D of Division V and who is engaged exclusively in commercial activities, authorize the person to use, beginning on a particular day in a fiscal year of the person and subject to such conditions as the Minister may from time to time specify, a certificate (in this section referred to as an “export distribution centre certificate”) for the purposes of section 1.2 of Part V of Schedule VI and section 11 of Schedule VII, if it can reasonably be expected that

    • (a) the person will not engage in the substantial alteration of property in the year;

    • (b) either the person’s percentage value added attributable to non-basic services in respect of customers’ goods for the year will not exceed 10% or the person’s percentage total value added in respect of customers’ goods for the year will not exceed 20%; and

    • (c) the person’s export revenue percentage for the year will be at least 90%.

  • Marginal note:Application

    (8) An application for an authorization to use an export distribution centre certificate shall be made in prescribed form containing prescribed information and be filed with the Minister in prescribed manner.

  • Marginal note:Notice of authorization

    (9) If the Minister authorizes a person to use an export distribution centre certificate, the Minister shall notify the person in writing of the authorization, its effective date and its expiry date and the number assigned by the Minister that identifies the person or the authorization and that must be disclosed by the person when providing the certificate for the purpose of section 1.2 of Part V of Schedule VI or when accounting for imported goods in accordance with section 11 of Schedule VII.

  • Marginal note:Revocation

    (10) The Minister may, after giving a person to whom an authorization has been granted under subsection (7) reasonable written notice, revoke the authorization, effective on a day in a particular fiscal year of the person, if

    • (a) the person fails to comply with any condition attached to the authorization or with any provision of this Part;

    • (b) it can reasonably be expected that

      • (i) one or both of the conditions described in paragraphs (7)(a) and (b) would not be met if the fiscal year referred to in those paragraphs were the particular fiscal year, or

      • (ii) the person’s export revenue percentage for the particular fiscal year will be less than 80%; or

    • (c) the person has requested in writing that the authorization be revoked as of that day.

  • Marginal note:Deemed revocation

    (11) Subject to subsection (10), an authorization granted to a person under subsection (7) is deemed to have been revoked, effective immediately after a fiscal year of the person, if

    • (a) the person had engaged in the substantial alteration of property in that year;

    • (b) the person’s percentage value added attributable to non-basic services in respect of customers’ goods for the year exceeds 10% and the person’s percentage total value added in respect of customers’ goods for the year exceeds 20%; or

    • (c) the person’s export revenue percentage for the year is less than 80%.

  • Marginal note:Cessation

    (12) An authorization granted under subsection (7) to a person ceases to have effect immediately before the earlier of

    • (a) the day on which a revocation of the authorization becomes effective, and

    • (b) the day that is three years after the day on which the authorization became effective.

  • Marginal note:Application after revocation

    (13) If an authorization granted to a person under subsection (7) is revoked, effective on a particular day, the Minister shall not grant to the person another authorization under that subsection that becomes effective before

    • (a) if the authorization was revoked in circumstances described in paragraph (10)(a), the day that is two years after the particular day; and

    • (b) in any other case, the first day of the second fiscal year of the person beginning after the particular day.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2001, c. 15, s. 19
  • 2017, c. 33, s. 145(F)

SUBDIVISION B.3Information Returns

Marginal note:Definitions

  •  (1) The following definitions apply in this section and section 284.1.

    actual amount

    actual amount means any amount that is required to be reported in an information return that a person is required to file under subsection (3) for a fiscal year of the person and that is

    • (a) a tax amount for the fiscal year or a previous fiscal year of the person; or

    • (b) an amount calculated using only tax amounts for the fiscal year or a previous fiscal year of the person, unless all of those tax amounts are required to be reported in the information return. (montant réel)

    tax amount

    tax amount for a fiscal year of a person means an amount that

    • (a) is tax paid or payable (other than tax paid or payable under Division II), or is tax that is deemed under this Part to have been paid or become payable, by the person at any time during the fiscal year;

    • (b) became collectible or was collected, or is deemed under this Part to have become collectible or to have been collected, by the person as or on account of tax under Division II in a reporting period of the person in the fiscal year;

    • (c) is an input tax credit for a reporting period of the person in the fiscal year;

    • (d) is an amount that is required to be added or that may be deducted in determining net tax for a reporting period of the person in the fiscal year; or

    • (e) is required under this Part to be used in calculating or determining any amount described in paragraph (b) or (d), other than

      • (i) an amount that is consideration for a supply,

      • (ii) an amount that is the value of property or a service, or

      • (iii) a percentage. (montant de taxe)

  • Marginal note:Reporting institution

    (2) For the purposes of this section and section 284.1, a person, other than a prescribed person or a person of a prescribed class, is a reporting institution throughout a fiscal year of the person if

    • (a) the person is a financial institution at any time in the fiscal year;

    • (b) the person is a registrant at any time in the fiscal year; and

    • (c) the total of all amounts each of which is an amount included in computing, for the purposes of the Income Tax Act, the person’s income, or, if the person is an individual, the person’s income from a business, for the last taxation year of the person that ends in the fiscal year, exceeds the amount determined by the formula

      $1,000,000 × A/365

      where

      A
      is the number of days in the taxation year.
  • Marginal note:Information return for reporting institution

    (3) A reporting institution shall file an information return with the Minister for a fiscal year of the reporting institution in prescribed form containing prescribed information on or before the day that is six months after the end of the fiscal year.

  • Marginal note:Estimates

    (4) Every reporting institution that is required to report, in an information return filed under subsection (3), an amount (other than an actual amount) that is not reasonably ascertainable at the time on or before which the information return is required to be filed shall provide a reasonable estimate of the amount in the information return.

  • Marginal note:Ministerial exemption

    (5) The Minister may exempt any reporting institution or class of reporting institutions from the requirement, under subsection (3), to provide any prescribed information or may allow any reporting institution or class of reporting institutions to provide a reasonable estimate of any actual amount that is required to be reported in an information return under that subsection.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2010, c. 12, s. 76
 
Date modified: