Excise Tax Act

Marginal note:Deduction for charity

• 226.1 (1) Where

  • (a) a charity is the recipient of a particular supply (other than a supply to which section 156 or 167 applies) made in Canada by way of sale of a used and empty returnable container (as defined in subsection 226(1)),

  • (b) the charity acquires the container for the purpose of making a supply of the container when empty, or of the by-products of a process of recycling the container, in the course of a business of the charity,

  • (c) the charity is not entitled to claim an input tax credit in respect of the container,

  • (d) if the charity at any time makes a supply of the container in respect of which tax is or would, but for section 156 or 167, be collectible, subsection 226(3) does not apply in respect of that supply, and

  • (e) the charity pays to the supplier, in respect of the particular supply, the total of the portion (in this subsection referred to as the “refundable deposit”) of all taxes or fees that were imposed in respect of the container under an Act of the legislature of a province respecting the regulation, control or prevention of waste and that, pursuant to that Act or an agreement entered into under that Act, is refundable to the supplier and

    • (i) if tax is payable in respect of the particular supply, the tax calculated on the refundable deposit, and

    • (ii) in any other case, the amount of tax, calculated on the refundable deposit, that would be payable by the charity in respect of the particular supply if it were a taxable supply made by a registrant,

    the charity may, in determining the net tax for its reporting period in which the particular supply is made, deduct the amount determined by the formula

    A × B

    where

    A

    is

    • (a) if the particular supply is made in a participating province, the total of 7% and the tax rate for that province, and

    • (b) in any other case, 7%, and

    B

    is the refundable deposit.

• Marginal note:Limitation

  (2) A charity may not claim a deduction under subsection (1) in respect of a supply of a returnable container made to the charity unless the deduction is claimed in a return under this Division filed by the charity not later than the day on or before which the return under this Division is required to be filed for the last reporting period of the charity that ends within four years after the end of the reporting period in which the particular supply is made.