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

Full Document:  

Act current to 2022-08-08 and last amended on 2022-06-23. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION IIGoods and Services Tax (continued)

SUBDIVISION AImposition of Tax (continued)

Marginal note:Supplies to non-resident persons of admissions to conventions

  •  (1) If a sponsor of a convention makes a taxable supply of an admission to the convention to a non-resident person, the following shall not be included in calculating the tax payable in respect of the supply:

    • (a) that portion of the consideration for the admission that is reasonably attributable to the provision of the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering; and

    • (b) 50% of that portion of the consideration for the admission that is reasonably attributable to the provision of related convention supplies that are food or beverages or are supplied under a contract for catering.

  • Marginal note:Supplies to non-resident exhibitors

    (2) Where a sponsor of a convention makes a taxable supply by way of lease, licence or similar arrangement to a non-resident person of real property that is acquired by the person exclusively for use as a site for the promotion, at the convention, of property or services supplied by, or of a business of, the person, no tax is payable in respect of that supply to the person or in respect of any supply by the sponsor to the person of property or services that are acquired by the person for consumption or use as related convention supplies in respect of the convention.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1993, c. 27, s. 34
  • 2000, c. 30, s. 27
When Tax Payable

Marginal note:General rule

  •  (1) Tax under this Division in respect of a taxable supply is payable by the recipient on the earlier of the day the consideration for the supply is paid and the day the consideration for the supply becomes due.

  • Marginal note:Partial consideration

    (2) Notwithstanding subsection (1), where consideration for a taxable supply is paid or becomes due on more than one day,

    • (a) tax under this Division in respect of the supply is payable on each day that is the earlier of the day a part of the consideration is paid and the day that part becomes due; and

    • (b) the tax that is payable on each such day shall be calculated on the value of the part of the consideration that is paid or becomes due, as the case may be, on that day.

  • Marginal note:Supply completed

    (3) Notwithstanding subsections (1) and (2), where all or any part of the consideration for a taxable supply has not been paid or become due on or before the last day of the calendar month immediately following the first calendar month in which

    • (a) where the supply is of tangible personal property by way of sale, other than a supply described in paragraph (b) or (c), the ownership or possession of the property is transferred to the recipient,

    • (b) where the supply is of tangible personal property by way of sale under which the supplier delivers the property to the recipient on approval, consignment, sale-or-return basis or other similar terms, the recipient acquires ownership of the property or makes a supply of it to any person, other than the supplier, or

    • (c) where the supply is under an agreement in writing for the construction, renovation or alteration of, or repair to,

      • (i) any real property, or

      • (ii) any ship or other marine vessel, and it may reasonably be expected that the construction, renovation, alteration or repair will require more than three months to complete,

      the construction, renovation, alteration or repair is substantially completed,

    tax under this Division in respect of the supply, calculated on the value of that consideration or part, as the case may be, is payable on that day.

  • Marginal note:Continuous supplies

    (4) Subsection (3) does not apply in respect of a supply of water, electricity, natural gas, steam or any other property where the property is delivered or made available to the recipient on a continuous basis by means of a wire, pipeline or other conduit and the supplier invoices the recipient in respect of that supply on a regular or periodic basis.

  • Marginal note:Sale of real property

    (5) Notwithstanding subsections (1) and (2), tax under this Division in respect of a taxable supply of real property by way of sale is payable

    • (a) in the case of a supply of a residential condominium unit where possession of the unit is transferred, after 1990 and before the condominium complex in which the unit is situated is registered as a condominium, to the recipient under the agreement for the supply, on the earlier of the day ownership of the unit is transferred to the recipient and the day that is sixty days after the day the condominium complex is registered as a condominium; and

    • (b) in any other case, on the earlier of the day ownership of the property is transferred to the recipient and the day possession of the property is transferred to the recipient under the agreement for the supply.

  • Marginal note:Value not ascertainable

    (6) Where under subsection (3) or (5) tax is payable on a day and the value of the consideration, or any part thereof, for the taxable supply is not ascertainable on that day,

    • (a) tax calculated on the value of the consideration or part, as the case may be, that is ascertainable on that day is payable on that day; and

    • (b) tax calculated on the value of the consideration or part, as the case may be, that is not ascertainable on that day is payable on the day the value becomes ascertainable.

  • Marginal note:Retention of consideration

    (7) Notwithstanding subsections (1), (2), (3), (5) and (6), where the recipient of a taxable supply retains, pursuant to

    • (a) an Act of Parliament or of the legislature of a province, or

    • (b) an agreement in writing for the construction, renovation or alteration of, or repair to, any real property or any ship or other marine vessel,

    a part of the consideration for the supply pending full and satisfactory performance of the supply, or any part thereof, tax under this Division, calculated on the value of that part of the consideration, is payable on the earlier of the day that part is paid and the day it becomes payable.

  • Marginal note:Combined supply

    (8) For the purposes of this section, where a supply of any combination of service, personal property or real property (each of which is in this subsection referred to as an “element”) is made and the consideration for each element is not separately identified,

    • (a) where the value of a particular element can reasonably be regarded as exceeding the value of each of the other elements, the supply of all of the elements shall be deemed to be a supply only of the particular element; and

    • (b) in any other case, the supply of all of the elements shall be deemed

      • (i) where one of the elements is real property, to be a supply only of real property, and

      • (ii) in any other case, to be a supply only of a service.

  • Marginal note:Deposits

    (9) For the purposes of this section, a deposit (other than a deposit in respect of a covering or container in respect of which section 137 applies), whether refundable or not, given in respect of a supply shall not be considered as consideration paid for the supply unless and until the supplier applies the deposit as consideration for the supply.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 2017, c. 33, s. 113(F)

SUBDIVISION BInput Tax Credits

Marginal note:General rule for credits

  •  (1) Subject to this Part, where a person acquires or imports property or a service or brings it into a participating province and, during a reporting period of the person during which the person is a registrant, tax in respect of the supply, importation or bringing in becomes payable by the person or is paid by the person without having become payable, the amount determined by the following formula is an input tax credit of the person in respect of the property or service for the period:

    A × B

    where

    A
    is the tax in respect of the supply, importation or bringing in, as the case may be, that becomes payable by the person during the reporting period or that is paid by the person during the period without having become payable; and
    B
    is
    • (a) where the tax is deemed under subsection 202(4) to have been paid in respect of the property on the last day of a taxation year of the person, the extent (expressed as a percentage of the total use of the property in the course of commercial activities and businesses of the person during that taxation year) to which the person used the property in the course of commercial activities of the person during that taxation year,

    • (b) where the property or service is acquired, imported or brought into the province, as the case may be, by the person for use in improving capital property of the person, the extent (expressed as a percentage) to which the person was using the capital property in the course of commercial activities of the person immediately after the capital property or a portion thereof was last acquired or imported by the person, and

    • (c) in any other case, the extent (expressed as a percentage) to which the person acquired or imported the property or service or brought it into the participating province, as the case may be, for consumption, use or supply in the course of commercial activities of the person.

  • Marginal note:Determining credit for improvement

    (1.1) Where a person acquires or imports property or a service or brings it into a participating province partly for use in improving capital property of the person and partly for another purpose, for the purpose of determining an input tax credit of the person in respect of the property or service,

    • (a) notwithstanding section 138, that part of the property or service that is for use in improving the capital property and the remaining part of the property or service are each deemed to be a separate property or service that does not form part of the other;

    • (b) the tax payable in respect of the supply, importation or bringing in, as the case may be, of that part of the property or service that is for use in improving the capital property is deemed to be equal to the amount determined by the formula

      A × B

      where

      A
      is the tax payable (in this section referred to as the “total tax payable”) by the person in respect of the supply, importation or bringing in, as the case may be, of the property or service, determined without reference to this section, and
      B
      is the extent (expressed as a percentage) to which the total consideration paid or payable by the person for the supply in Canada of the property or service or the value of the imported goods or the property brought in is or would be, if the person were a taxpayer under the Income Tax Act, included in determining the adjusted cost base to the person of the capital property for the purposes of that Act; and
    • (c) the tax payable in respect of that part of the property or service that is not for use in improving the capital property is deemed to be equal to the difference between the total tax payable and the amount determined under paragraph (b).

  • (1.2) and (1.3) [Repealed, 1997, c. 10, s. 161]

  • Marginal note:Credit for goods imported to provide commercial service

    (2) Subject to this Part, where a registrant imports goods of a non-resident person who is not registered under Subdivision D of Division V for the purpose of making a taxable supply to the non-resident person of a commercial service in respect of the goods and, during a reporting period of the registrant, tax in respect of the importation becomes payable by the registrant or is paid by the registrant without having become payable, the input tax credit of the registrant in respect of the goods for the reporting period is an amount equal to that tax.

  • Marginal note:Restricted credit for selected listed financial institutions

    (3) No amount shall be included in determining an input tax credit of a person in respect of tax that becomes payable by the person under subsection 165(2) or section 212.1 while the person is a selected listed financial institution unless

    • (a) the input tax credit is in respect of

      • (i) tax that the person is deemed to have paid under subsection 171(1), 171.1(2), 206(2) or (3) or 208(2) or (3), or

      • (ii) an amount of tax that is prescribed for the purposes of paragraph (a) of the description of F in subsection 225.2(2);

    • (b) the person is permitted to claim the input tax credit under subsection 193(1) or (2); or

    • (c) the amount is a prescribed amount.

  • Marginal note:Required documentation

    (4) A registrant may not claim an input tax credit for a reporting period unless, before filing the return in which the credit is claimed,

    • (a) the registrant has obtained sufficient evidence in such form containing such information as will enable the amount of the input tax credit to be determined, including any such information as may be prescribed; and

    • (b) where the credit is in respect of property or a service supplied to the registrant in circumstances in which the registrant is required to report the tax payable in respect of the supply in a return filed with the Minister under this Part, the registrant has so reported the tax in a return filed under this Part.

  • Marginal note:Exemption

    (5) Where the Minister is satisfied that there are or will be sufficient records available to establish the particulars of any supply or importation or of any supply or importation of a specified class and the tax in respect of the supply or importation paid or payable under this Part, the Minister may

    • (a) exempt a specified registrant, a specified class of registrants or registrants generally from any of the requirements of subsection (4) in respect of that supply or importation or a supply or importation of that class; and

    • (b) specify terms and conditions of the exemption.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 35
  • 1997, c. 10, ss. 19, 161
  • 2000, c. 30, s. 28
  • 2009, c. 32, s. 5

Marginal note:Restriction

  •  (1) In determining an input tax credit of a registrant, no amount shall be included in respect of the tax payable by the registrant in respect of

    • (a) a supply of a membership, or a right to acquire a membership, in a club the main purpose of which is to provide dining, recreational or sporting facilities, except where the registrant acquires the membership or right, as the case may be, exclusively for supply in the ordinary course of a business of the registrant of supplying such memberships or rights;

    • (a.1) a supply, importation or bringing into a participating province of property or a service that is acquired, imported or brought in by the registrant for consumption or use by the registrant (or, where the registrant is a partnership, an individual who is a member of the partnership) in relation to any part (in this paragraph referred to as the “work space”) of a self-contained domestic establishment in which the registrant or the individual, as the case may be, resides unless the work space

      • (i) is the principal place of business of the registrant, or

      • (ii) is used exclusively for the purpose of earning income from a business and is used on a regular and continuous basis for meeting clients, customers or patients of the registrant in respect of the business;

    • (b) a supply, importation or bringing into a participating province of property or a service that is acquired, imported or brought in by the registrant at any time in or before a reporting period of the registrant exclusively for the personal consumption, use or enjoyment (in this paragraph referred to as the “benefit”) in that period of a particular individual who was, is or agrees to become an officer or employee of the registrant, or of another individual related to the particular individual, except where

      • (i) the registrant makes a taxable supply of the property or service to the particular individual or the other individual for consideration that becomes due in that period and that is equal to the fair market value of the property or service at the time the consideration becomes due, or

      • (ii) if no amount were payable by the particular individual for the benefit, no amount would be included under section 6 of the Income Tax Act in respect of the benefit in computing the income of the particular individual for the purposes of that Act; and

    • (c) a supply made in or before a reporting period of the registrant of property, by way of lease, licence or similar arrangement, primarily for the personal consumption, use or enjoyment in that period of

      • (i) where the registrant is an individual, the registrant or another individual related to the registrant,

      • (ii) where the registrant is a partnership, an individual who is a member of the partnership or another individual who is an employee, officer or shareholder of, or related to, a member of the partnership,

      • (iii) where the registrant is a corporation, an individual who is a shareholder of the corporation or another individual related to the shareholder, and

      • (iv) where the registrant is a trust, an individual who is a beneficiary of the trust or another individual related to the beneficiary,

      except where the registrant makes a taxable supply of the property in that period to such an individual for consideration that becomes due in that period and that is equal to the fair market value of the supply at the time the consideration becomes due.

  • Marginal note:Further restriction

    (2) In determining an input tax credit of a registrant, no amount shall be included in respect of the tax payable by the registrant in respect of property or a service acquired, imported or brought into a participating province by the registrant, except to the extent that

    • (a) the consumption or use of property or services of such quality, nature or cost is reasonable in the circumstances, having regard to the nature of the commercial activities of the registrant; and

    • (b) the amount is calculated on consideration for the property or service or on a value of the property that is reasonable in the circumstances.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 36
  • 1997, c. 10, ss. 20, 162
 
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