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

Full Document:  

Act current to 2022-05-02 and last amended on 2021-07-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION VIIMiscellaneous (continued)

SUBDIVISION B.3Information Returns (continued)

Marginal note:Electronic funds transfer

 For greater certainty, information obtained by the Minister under Part XV.1 of the Income Tax Act may be used for the purposes of this Part.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2014, c. 20, s. 49

SUBDIVISION CAnti-avoidance

Marginal note:Definitions

  •  (1) In this section,

    tax benefit

    tax benefit means a reduction, an avoidance or a deferral of tax or other amount payable under this Part or an increase in a refund or rebate of tax or other amount under this Part; (avantage fiscal)

    tax consequences

    tax consequences to a person means the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, the person under this Part, or any other amount that is relevant to the purposes of computing that amount; (attribut fiscal)

    transaction

    transaction includes an arrangement or event. (opération)

  • Marginal note:General anti-avoidance provision

    (2) Where a transaction is an avoidance transaction, the tax consequences to a person shall be determined as is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that include that transaction.

  • Marginal note:Avoidance transaction

    (3) An avoidance transaction means any transaction

    • (a) that, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit; or

    • (b) that is part of a series of transactions, which series, but for this section, would result directly or indirectly in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit.

  • Marginal note:Provision not applicable

    (4) For greater certainty, subsection (2) does not apply in respect of a transaction where it may reasonably be considered that the transaction would not result, directly or indirectly, in a misuse of the provisions of this Part or in an abuse having regard to the provisions of this Part (other than this section) read as a whole.

  • Marginal note:Determination of tax consequences

    (5) Without restricting the generality of subsection (2),

    • (a) any input tax credit or any deduction in computing tax or net tax payable may be allowed or disallowed, in whole or in part,

    • (b) any such credit or deduction or a part thereof may be allocated to any person,

    • (c) the nature of any payment or other amount may be recharacterized, and

    • (d) the tax effects that would otherwise result from the application of other provisions of this Part may be ignored,

    in determining the tax consequences to a person as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction.

  • Marginal note:Request for adjustments

    (6) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day of sending of the notice, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

  • Marginal note:Exception

    (7) Notwithstanding any other provision of this Part, the tax consequences to any person following the application of this section shall only be determined through a notice of assessment, reassessment or additional assessment involving the application of this section.

  • Marginal note:Duties of Minister

    (8) On receipt of a request by a person under subsection (6), the Minister shall, with all due dispatch, consider the request and, notwithstanding subsections 298(1) and (2), assess, reassess or make an additional assessment with respect to the person, except that an assessment, a reassessment or an additional assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (6).

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 2010, c. 25, s. 136

Marginal note:Rate change — variation of agreement

 If

  • (a) at any time before July 1, 2006, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

  • (b) the supplier and the recipient at a later time either directly or indirectly

    • (i) vary or alter the agreement for the supply, or

    • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

  • (c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

  • (d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 7% on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

  • (e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 6% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 7%, and

  • (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

  • (g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate of 7% on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2006, c. 4, s. 32

Marginal note:Variation of agreement — 2008 rate reduction

 If

  • (a) at any time before January 1, 2008, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

  • (b) the supplier and the recipient at a later time either directly or indirectly

    • (i) vary or alter the agreement for the supply, or

    • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

  • (c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

  • (d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 6% or 7%, as the case may be, on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

  • (e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 5% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 6% or 7%, as the case may be, and

  • (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

  • (g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate at which tax would have been calculated under paragraph (d) on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2007, c. 35, s. 195

Marginal note:Definitions

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

    person

    person does not include a consumer. (personne)

    rate change

    rate change means any change in any rate of tax imposed under this Part. (modification de taux)

    tax benefit

    tax benefit means a reduction, an avoidance or a deferral of tax or other amount payable under this Part or an increase in a refund or rebate of tax or other amount under this Part. (avantage fiscal)

    transaction

    transaction has the meaning assigned by subsection 274(1). (opération)

  • Marginal note:Rate change — transactions

    (2) If

    • (a) a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made,

    • (b) the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and

    • (c) it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from a rate change, for one or more of the persons involved in the transaction or series of transactions,

    the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under this Part, or any other amount that is relevant for the purposes of computing that amount shall be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons.

  • Marginal note:Denying tax benefit on transactions

    (3) Despite any other provision of this Part, a tax benefit shall only be denied under subsection (2) through an assessment, reassessment or additional assessment.

  • Marginal note:Request for adjustments

    (4) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day on which the notice was sent, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

  • Marginal note:Duties of Minister

    (5) On receipt of a request by a person under subsection (4), the Minister shall, with all due dispatch, consider the request and, despite subsections 298(1) and (2), assess, reassess or make an additional assessment with respect to the person, except that an assessment, a reassessment or an additional assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4).

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2006, c. 4, s. 32
  • 2010, c. 25, s. 137

DIVISION VIIIAdministration and Enforcement

SUBDIVISION AAdministration

Marginal note:Minister’s duty

  •  (1) The Minister shall administer and enforce this Part and the Commissioner may exercise all the powers and perform the duties of the Minister under this Part.

  • Marginal note:Officers and employees

    (2) Such officers, agents and employees as are necessary to administer and enforce this Part shall be appointed or employed in the manner authorized by law.

  • Marginal note:Delegation of powers

    (3) The Minister may authorize a designated officer or agent or a class of officers or agents to exercise powers or perform duties of the Minister under this Part.

  • Marginal note:Administration of oaths

    (4) Any officer or employee employed in connection with the administration or enforcement of this Part, if designated by the Minister for the purpose, may administer oaths and take and receive affidavits, declarations and affirmations for the purposes of or incidental to the administration or enforcement of this Part or regulations made under this Part, and every officer or employee so designated has for those purposes all the powers of a commissioner for administering oaths or taking affidavits.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1994, c. 9, s. 19(F)
  • 1999, c. 17, s. 153

Marginal note:Inquiry

  •  (1) The Minister may, for any purpose related to the administration or enforcement of this Part, authorize any person, whether or not the person is an officer of the Canada Revenue Agency, to make such inquiry as the Minister may deem necessary with reference to anything relating to the administration or enforcement of this Part.

  • Marginal note:Appointment of hearing officer

    (2) Where the Minister, under subsection (1), authorizes a person to make an inquiry, the Minister shall forthwith apply to the Tax Court for an order appointing a hearing officer before whom the inquiry will be held.

  • Marginal note:Powers of hearing officer

    (3) For the purposes of an inquiry authorized under subsection (1), a hearing officer appointed under subsection (2) in relation thereto has all the powers conferred on a commissioner by sections 4 and 5 of the Inquiries Act and that may be conferred on a commissioner under section 11 of that Act.

  • Marginal note:When powers to be exercised

    (4) A hearing officer appointed under subsection (2) in relation to an inquiry shall exercise the powers conferred on a commissioner by section 4 of the Inquiries Act in relation to such persons as the person authorized to make the inquiry considers appropriate for the conduct thereof, but the hearing officer shall not exercise the power to punish any person unless, on application by the hearing officer, a judge of a superior or county court certifies that the power may be exercised in the matter disclosed in the application and the applicant has given to the person in respect of whom the power is proposed to be exercised twenty-four hours notice of the hearing of the application, or such shorter notice as the judge considers reasonable.

  • Marginal note:Rights of witnesses

    (5) Any person who gives evidence in an inquiry authorized under subsection (1) is entitled to be represented by counsel and, on request made by the person to the Minister, to receive a transcript of that evidence.

  • Marginal note:Rights of person investigated

    (6) Any person whose affairs are investigated in the course of an inquiry authorized under subsection (1) is entitled to be present and to be represented by counsel throughout the inquiry unless the hearing officer appointed under subsection (2), on application by the Minister or a person giving evidence, orders otherwise in relation to the whole or any part of the inquiry, on the ground that the presence of the person and the person’s counsel, or either of them, would be prejudicial to the effective conduct of the inquiry.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1999, c. 17, s. 156
  • 2017, c. 33, s. 161
 
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