Excise Tax Act

Marginal note:Sale of real property

• 193 (1) Subject to subsection (2.1), if at a particular time a registrant makes a particular taxable supply of real property by way of sale, other than

  • (a) a supply deemed under subsection 206(5) or 207(2) to have been made, or

  • (b) a supply made by a public sector body (other than a financial institution) of property in respect of which an election by the body under section 211 is not in effect at the particular time,

  the registrant may, notwithstanding section 170 and Subdivision d, claim an input tax credit for the reporting period in which tax in respect of the particular taxable supply becomes payable or is deemed to have been collected, as the case may be, equal to the amount determined by the formula

  A × B

  where

  A

  is the lesser of

  • (a) the basic tax content of the property at the particular time; and

  • (b) the tax that is or would, but for section 167, be payable in respect of the particular taxable supply, and

  B

  is the percentage that, immediately before the particular time, the use of the property otherwise than in commercial activities of the registrant was of the total use of the property.

• Marginal note:Sale by public sector bodies

  (2) Subject to subsection (2.1), if at a particular time a registrant that is a public sector body (other than a financial institution) makes a particular taxable supply of real property by way of sale (other than a supply that is deemed under subsection 200(2) or 206(5) to have been made) and, immediately before the time tax becomes payable in respect of the particular taxable supply, the property was not used by the registrant primarily in commercial activities of the registrant, except where subsection (1) applies, the registrant may, despite section 170 and Subdivision d, claim an input tax credit for the reporting period in which tax in respect of the particular taxable supply became payable or is deemed to have been collected, as the case may be, equal to the lesser of

  • (a) the basic tax content of the property at the particular time; and

  • (b) the tax that is or would, but for section 167, be payable in respect of the particular taxable supply.

• Marginal note:Limitation

  (2.1) If the particular taxable supply of property referred to in subsection (1) or (2) is made at a particular time by a public sector body to another person with whom the public sector body is not dealing at arm’s length, the value of A in subsection (1) and the input tax credit under subsection (2) shall not exceed the lesser of

  • (a) the basic tax content of the property at the particular time, and

  • (b) the amount determined by the formula

    (A/B) × C

    where

    A

    is the basic tax content of the property at the particular time,

    B

    is the amount that would be the basic tax content of the property at that time if that amount were determined without reference to the description of B in paragraph (a) and the description of K in paragraph (b) of the definition basic tax content in subsection 123(1), and

    C

    is the tax that is or would, in the absence of section 167, be payable in respect of the particular taxable supply.

• Marginal note:Redemption of real property

  (3) Where

  • (a) for the purposes of satisfying in whole or in part a debt or obligation owing by a person (in this subsection referred to as the “debtor”), a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of real property, and

  • (b) under the Act or the agreement, the debtor has a right to redeem the property,

  the following rules apply:

  • (c) the debtor is not entitled to claim an input tax credit under this section in respect of the property unless the time limit for redeeming the property has expired and the debtor has not redeemed the property, and

  • (d) where the debtor is entitled to claim the input tax credit, that input tax credit is for the reporting period in which the time limit for redeeming the property expires.