Excise Tax Act

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.