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

Property and Services

Marginal note:Transfer of personal property before implementation

• 352 (1) If a taxable supply by way of sale of tangible personal property is made in a participating province to a person under an agreement in writing entered into before the implementation date for that province, to the extent that

  • (a) the property is delivered to the person before that date, or

  • (b) ownership of the property is transferred to the person before that implementation date,

  no tax is payable under subsection 165(2) in respect of any consideration for the supply of the property under the agreement.

• Marginal note:Exercise of option to purchase

  (1.1) If a recipient of a supply of tangible personal property by way of lease, licence or similar arrangement exercises an option to purchase the property provided for under the arrangement and the supply by way of sale of the property is made in a participating province, and retail sales tax in respect of the sale became payable before the implementation date for the province or would have become payable if the property or the recipient, as the case may be, were not exempt from that tax, no tax under subsection 165(2) is payable in respect of the sale.

• Marginal note:Imported taxable supply under pre-implementation date agreement

  (2) If an imported taxable supply (as defined in section 217) of tangible personal property is made, under an agreement in writing entered into before the implementation date for a participating province, to a person who is

  • (a) resident in that province, or

  • (b) a registrant to whom the property is delivered or made available, or physical possession of the property is transferred, in that province,

  and physical possession of the property is transferred to the person before the implementation date for that province, no tax is payable under subsection 218.1(1) in respect of any consideration for the supply of the property under the agreement.

• Marginal note:No written agreement

  (3) Where a taxable supply by way of sale of tangible personal property (other than a supply to which subsection (1) applies) is made in a participating province to a person, to the extent that

  • (a) the property is delivered to the person before the implementation date for that province, or

  • (b) ownership of the property is transferred to the person before that implementation date,

  no tax is payable under subsection 165(2) in respect of any consideration for the supply that is paid or becomes due before the day that is four months after that implementation date.

• Marginal note:Imported taxable supply

  (4) Where an imported taxable supply (within the meaning assigned by section 217) of tangible personal property (other than a supply to which subsection (2) applies) is made to a person who is

  • (a) resident in a participating province, or

  • (b) a registrant to whom the property is delivered or made available, or physical possession of the property is transferred, in a participating province,

  and physical possession of the property is transferred to the person before the implementation date for that province, no tax is payable under subsection 218.1(1) in respect of any consideration for the supply that is paid or becomes due before the day that is four months after that implementation date.

• Marginal note:Continuous supplies

  (5) To the extent that consideration for a supply made in a participating province of electricity, natural gas, steam or any property or service that

  • (a) in the case of property, is delivered or made available, or

  • (b) in the case of a service, is performed or made available

  on a continuous basis by means of a wire, pipeline or other conduit is paid or becomes due before the day that is four months after the implementation date for that province, no tax is payable under subsection 165(2) in respect of the property or service delivered, performed or made available, as the case may be, to the recipient before the implementation date for that province.

• Marginal note:Continuous supplies

  (6) To the extent that consideration for a taxable supply made in a participating province of electricity, natural gas, steam or any property or service that

  • (a) in the case of property, is delivered or made available, or

  • (b) in the case of a service, is performed or made available

  on a continuous basis by means of a wire, pipeline or other conduit becomes due on or after the day that is four months after the implementation date for that province, or is paid on or after that day without having become due, and at a time when the supplier is a registrant, subsection 165(2) applies to the supply in respect of that consideration regardless of when the property or service is delivered, performed or made available, as the case may be.

• Marginal note:Payment before implementation for subscription

  (7) No tax is payable under subsection 165(2) or section 212.1 in respect of any consideration for a taxable supply made in a participating province of a subscription for newspapers, magazines or other publications published periodically that is paid before the implementation date for that province.

• Marginal note:Prepayment after specified pre-implementation date for tangible personal property

  (8) If a taxable supply of tangible personal property by way of sale is made

  • (a) in a participating province, or

  • (b) outside Canada to a person to whom the property is delivered or made available, or physical possession of the property is transferred, in a participating province,

  any consideration (other than consideration referred to in subsection (7)) that becomes due, or is paid without having become due, on or after the specified pre-implementation date for that province and before the implementation date for that province for property that is not delivered to the recipient and ownership of which is not transferred to the recipient before that implementation date is deemed, for the purposes of applying subsection 165(2) or section 218.1 to the supply, as the case may require, to have become due on that implementation date and not to have been paid before that implementation date.

• Marginal note:Prepayment before specified pre-implementation date for tangible personal property

  (9) Subject to subsections (5) and (7), where a taxable supply of tangible personal property is made by way of sale

  • (a) in a participating province by a registrant to a person who is not a consumer, or

  • (b) outside Canada to a person who is not a consumer and to whom either the property is delivered or made available, or physical possession of the property is transferred, in a participating province,

  ownership and possession of the property are not transferred to the person before the implementation date for that province and consideration for the supply becomes due or is paid without having become due after the announcement date for that province and before the specified pre-implementation date for that province,

  • (c) tax under subsection 165(2) or 218.1(1), as the case may require, is, notwithstanding subsection 218.1(2), payable in respect of that consideration if it would, but for that subsection, have been payable if the consideration had become due and been paid on the implementation date for the province, unless, in the case of tax under subsection 165(2), the property is acquired by the person for consumption, use or supply exclusively in commercial activities of the person and the person is neither a registrant that is a selected listed financial institution nor a registrant whose net tax is determined under section 225.1 or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations,

  • (d) where the person is a registrant whose return under section 238 for the reporting period that includes the implementation date for the province is required to be filed on a particular day before the day that is four months after that implementation date, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return, and

  • (e) where paragraph (d) does not apply, section 219 does not apply in respect of that tax and the person shall, before the day that is four months after that implementation date, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Prepayments before specified pre-implementation date for services

  (10) Subject to subsections (5) and 356(1), 358(1) and 359(1), where a taxable supply of a service is made

  • (a) in a participating province by a registrant to a person who is not a consumer, or

  • (b) outside the participating provinces to a person who is resident in a participating province and who is not a consumer,

  and consideration became due or was paid without having become due after the announcement date for that province and before the specified pre-implementation date for that province for any part of the service that was not performed before the implementation date for that province,

  • (c) tax under subsection 165(2), 218.1(1) or 220.08(1), as the case may require, is, notwithstanding subsection 218.1(2) and section 220.04, payable in respect of that consideration if, but for subsection 218.1(2) and section 220.04, it would have been payable if the consideration had become due and been paid on the implementation date for the province and, in the case of tax under subsection 220.08(1), if section 1 of Part II of Schedule X did not apply, unless, in the case of tax under subsection 165(2) or 220.08(1),

    • (i) the person is neither a registrant that is a selected listed financial institution nor a registrant whose net tax is determined under section 225.1 or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations, and

    • (ii) the service is acquired by the person for consumption, use or supply exclusively in commercial activities of the person,

  • (d) where the person is a registrant whose return under section 238 for the reporting period that includes the implementation date for the province is required to be filed on a particular day before the day that is four months after that implementation date, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return, and

  • (e) where paragraph (d) does not apply, section 219 and subsection 220.09(1) do not apply in respect of that tax and the person shall, before the day that is four months after that implementation date, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Tangible personal property returned after implementation

  (11) Where a person purchased tangible personal property in a participating province from a supplier before the implementation date for that province and, on or after that implementation date and before the day that is four months after that implementation date, the person returns the property to the supplier in exchange for other tangible personal property that the supplier supplies to the person in the province,

  • (a) if the consideration for the supply of the other property exceeds the consideration for the returned property, tax under subsection 165(2) in respect of the other property applies only on the excess amount; and

  • (b) if the consideration for the supply of the other property is less than or equal to the consideration for the returned property, no tax under subsection 165(2) is payable in respect of the supply of the other property.

• Marginal note:Supply completed

  (12) Where all or part of the consideration for a taxable supply by way of sale of tangible personal property made in a participating province becomes due or is paid without having become due on or after the day that is four months after the implementation date for that province and ownership or possession of the property was transferred before that implementation date to the recipient under the agreement for the supply,

  • (a) where paragraph 168(3)(a) applies, ownership and possession of the property, and

  • (b) where paragraph 168(3)(b) applies, ownership of the property,

  is, for the purpose of determining when tax under subsection 165(2) becomes payable in respect of the supply, deemed to have been transferred to the recipient on the day that is four months after that implementation date.

• Marginal note:Application

  (13) This section does not apply to a supply in a participating province to which section 353 applies.

Marginal note:Budget arrangements

• 353 (1) Where a supply of property or a service (other than a subscription for newspapers, magazines or other publications published periodically) is made in a participating province and the consideration for the supply of the property or service delivered, performed or made available during any period beginning before the implementation date for that province and ending on or after that implementation date is paid by the recipient under a budget payment arrangement with a reconciliation of the payments to take place at or after the end of the period and before the day that is one year after that implementation date, at the time the supplier issues an invoice for the reconciliation of the payments, the supplier shall determine the positive or negative amount determined by the formula

  A - B

  where

  A

  is the tax that would be payable under subsection 165(2) by the recipient for the part of the property or service supplied during the period that was delivered, performed or made available on or after that implementation date if the consideration therefor had become due and been paid on or after that implementation date; and

  B

  is the total tax payable under subsection 165(2) by the recipient in respect of the supply of the property or service delivered, performed or made available during the period.

• Marginal note:Collection of tax

  (2) Where the amount determined under subsection (1) in respect of a supply of property or a service is a positive amount and the supplier is a registrant, the supplier shall collect, and is deemed to have collected on the day the invoice for the reconciliation of payments is issued, that amount from the recipient as tax under subsection 165(2).

• Marginal note:Refund of excess

  (3) Where the amount determined under subsection (1) in respect of a supply of property or a service is a negative amount and the supplier is a registrant, the supplier shall refund or credit that amount to the recipient and issue a credit note for that amount in accordance with section 232.

• Marginal note:Continuous supply

  (4) Where a supply of property or a service, during any period for which the supplier issues an invoice for the supply, is made in a participating province on a continuous basis by means of a wire, pipeline or other conduit and, because of the method of recording the delivery of the property or the provision of the service, the time at which the property or a part thereof is delivered, or the time at which the service or a part thereof is provided, cannot reasonably be determined, an equal part of the whole of the property delivered, or of the whole of the service provided, in the period is deemed, for the purposes of this section, to have been delivered or provided, as the case may be, on each day of the period.

Marginal note:Prepayments of rent and royalties after specified pre-implementation date

• 354 (1) Subject to subsection (4), where

  • (a) a taxable supply of property by way of lease, licence or similar arrangement is made

    • (i) in a participating province by a registrant to a person, or

    • (ii) outside the participating provinces to a person to whom the property is delivered or made available, or physical possession of the property is transferred, in a participating province, and

  • (b) consideration for the supply that is rent, royalty or a similar payment attributable to a period on or after the implementation date for that participating province became due on or after the specified pre-implementation date for that participating province and before the implementation date for that province or was paid on or after that specified pre-implementation date and before that implementation date without having become due,

  that consideration is deemed, for the purpose of applying subsection 165(2), 218.1(1) or 220.08(1) to the supply, as the case may require, to have become due on that implementation date and not to have been paid before that implementation date.

• Marginal note:Prepayments of rent and royalties before specified pre-implementation date

  (2) Subject to subsection (4), where

  • (a) a taxable supply of property by way of lease, licence or similar arrangement is made

    • (i) in a participating province by a registrant to a person who is not a consumer, or

    • (ii) outside the participating provinces to a person who is not a consumer and to whom either the property is delivered or made available, or physical possession of the property is transferred, in a participating province, and

  • (b) consideration for the supply that is a rent, royalty or similar payment attributable to a period on or after the implementation date for that participating province became due after the announcement date for that participating province and before the specified pre-implementation date for that province or was paid after that announcement date and before that specified pre-implementation date without having become due,

  the following rules apply:

  • (c) tax under subsection 165(2), 218.1(1) or 220.08(1), as the case may require, is, notwithstanding subsection 218.1(2) and section 220.04, payable in respect of that consideration if, but for subsection 218.1(2) and section 220.04, it would have been payable if the consideration had become due and been paid on the implementation date for the province and, in the case of tax under subsection 220.08(1), if section 1 of Part II of Schedule X did not apply, unless, in the case of tax under subsection 165(2) or 220.08(1),

    • (i) the person is neither a registrant that is a selected listed financial institution nor a registrant whose net tax is determined under section 225.1 or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations, and

    • (ii) the property is acquired by the person for consumption, use or supply exclusively in commercial activities of the person,

  • (d) where the person is a registrant whose return under section 238 for the reporting period that includes the implementation date for the province is required to be filed on a particular day before the day that is four months after that implementation date, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return, and

  • (e) where paragraph (d) does not apply, section 219 and subsection 220.09(1) do not apply in respect of that tax and the person shall, before the day that is four months after that implementation date, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Periods before implementation

  (3) Where a taxable supply of property by way of lease, licence or similar arrangement is made

  • (a) in a participating province to a person, or

  • (b) outside the participating provinces to a person to whom the property is delivered or made available, or physical possession of the property is transferred, in a participating province,

  no tax is payable under subsection 165(2), 218.1(1) or 220.08(1) in respect of the consideration for the supply that becomes due before the particular day that is four months after the implementation date for that participating province, or is paid before the particular day without having become due, to the extent that the consideration is rent, royalty or a similar payment attributable to a period before that implementation date.

• Marginal note:Period including implementation date

  (4) Where a taxable supply of property by way of lease, licence or similar arrangement is made

  • (a) in a participating province to a person, or

  • (b) outside the participating provinces to a person to whom the property is delivered or made available, or physical possession of the property is transferred, in a participating province,

  no tax is payable under subsection 165(2), 218.1(1) or 220.08(1) in respect of consideration for the supply that is rent, royalty or a similar payment attributable to a period that begins before the implementation date for that participating province and ends before the day that is one month after the day immediately before that implementation date.

• Marginal note:Exception

  (4.1) Subsection (4) does not apply in respect of consideration for a supply of property that is rent, royalty or a similar payment attributable to a period if the supplier supplies services in respect of that property for the same period and the consideration for the supply of the property and the consideration for the supply of the services is included in a single invoice.

• Marginal note:Application

  (5) Subsections (1) to (4) do not apply in respect of payments of consideration for the use of, or the right to use, intangible personal property where the amount of the payment is not dependent on the amount of the use of or production from, or the profit from the use of or production from, the property.