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

Full Document:  

Act current to 2024-05-01 and last amended on 2024-01-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION IIGoods and Services Tax (continued)

SUBDIVISION CSpecial Cases (continued)

Marginal note:Non-substantial renovation

 For the purposes of this Part, where in the course of a business of making supplies of real property a person renovates or alters a residential complex of the person and the renovation or alteration is not a substantial renovation, the person shall be deemed

  • (a) to have made and received a taxable supply, in the province in which the complex is situated and at the earlier of the time the renovation is substantially completed and the time ownership of the complex is transferred, for consideration equal to the total of all amounts each of which is an amount in respect of the renovation or alteration (other than an amount of consideration paid or payable by the person for a financial service or for any property or service in respect of which the person is required to pay tax) that would be included in determining the adjusted cost base to the person of the complex for the purposes of the Income Tax Act if the complex were capital property of the person and the person were a taxpayer under that Act; and

  • (b) to have paid as a recipient and to have collected as a supplier, at that time, tax in respect of the supply, calculated on the total determined under paragraph (a).

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1997, c. 10, s. 182

Marginal note:New housing — assignment of agreement

 If a taxable supply by way of sale of a single unit residential complex (as defined in subsection 254(1)) or of a residential condominium unit is made in Canada under an agreement of purchase and sale (in this section referred to as the “purchase agreement”) entered into with a builder of the single unit residential complex or of the residential condominium unit and if another supply by way of assignment of the purchase agreement is made by a person (other than the builder) under another agreement, then the following rules apply for the purposes of this Part:

  • (a) the other supply is deemed to be a taxable supply, by way of sale, of real property that is an interest in the single unit residential complex or residential condominium unit; and

  • (b) the consideration for the other supply is deemed to be equal to the amount determined by the formula

    A − B

    where

    A
    is the consideration for the other supply as otherwise determined for the purposes of this Part, and
    B
    is
    • (i) if the other agreement indicates in writing that a part of the consideration for the other supply is attributable to the reimbursement of a deposit paid under the purchase agreement, the part of the consideration for the other supply, as otherwise determined for the purposes of this Part, that is solely attributable to the reimbursement of the deposit paid under the purchase agreement, and

    • (ii) in any other case, zero.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2022, c. 10, s. 52
Real Property Credits

Marginal note:Sale of real property

  •  (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, in the absence of section 167 or 167.11, 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.

  • [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. 57
  • 1997, c. 10, ss. 39, 183
  • 2006, c. 4, s. 15
  • 2007, c. 18, s. 14
Statement as to Use of Real Property

Marginal note:Incorrect statement

 For the purposes of this Part, where a supplier makes a taxable supply by way of sale of real property and incorrectly states or certifies in writing to the recipient of the supply that the supply is an exempt supply described in any of sections 2 to 5.3, 8 and 9 of Part I of Schedule V, except where the recipient knows or ought to know that the supply is not an exempt supply,

  • (a) the tax payable in respect of the supply is deemed to be equal to the amount determined by the formula

    (A/B) × C

    where

    A
    is
    • (i) if tax under subsection 165(2) was payable in respect of the supply, the total of the rate set out in subsection 165(1) and the tax rate for the participating province in which the supply was made, and

    • (ii) in any other case, the rate set out in subsection 165(1),

    B
    is the total of 100% and the percentage determined for A, and
    C
    is the consideration for the supply; and
  • (b) the supplier shall be deemed to have collected, and the recipient shall be deemed to have paid, that tax on the earlier of the day ownership of the property was transferred to the recipient and the day possession of the property was transferred to the recipient under the agreement for the supply.

  • [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. 58
  • 1997, c. 10, s. 184
  • 2006, c. 4, s. 16

SUBDIVISION DCapital Property

Marginal note:Prescribed property

 For the purposes of this Part, where a person acquires or imports prescribed property or brings it into a participating province for use as capital property of the person, the property is deemed to be personal property and not real property.

  • [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. 59
  • 1997, c. 10, s. 185

Marginal note:Residential complex not capital property

  •  (1) For the purposes of this Part, other than sections 148 and 249, a residential complex shall be deemed not to be, at a particular time, capital property of a builder of the complex unless

    • (a) at or before the particular time, the construction or substantial renovation of the complex was substantially completed; and

    • (b) at or after the time the construction or substantial renovation of the complex was substantially completed and at or before the particular time, the builder received an exempt supply of the complex or was deemed under section 191 to have received a taxable supply of the complex.

  • Marginal note:Addition not capital property

    (2) For the purposes of this Part, other than sections 148 and 249, an addition to a multiple unit residential complex shall be deemed not to be, at a particular time, capital property of a builder of the addition unless

    • (a) at or before the particular time, the construction of the addition was substantially completed; and

    • (b) at or after the time the construction of the addition was substantially completed and at or before the particular time, the builder received an exempt supply of the complex or was deemed under subsection 191(4) to have received a taxable supply of the addition.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1993, c. 27, s. 59

Marginal note:Last acquisition or importation

  •  (1) For the purposes of this Part (other than Division III and Schedule VII), an importation of property shall not be considered in determining the last acquisition or importation of the property

    • (a) where tax under Division III was not paid on the property in respect of that importation because the property was included in section 1 or 9 of Schedule VII or the property was included in section 8 of that Schedule and was classified under heading 98.13 or 98.14 of Schedule I to the Customs Tariff, or would have been so classified but for Note 11(a) to Chapter 98 of that Schedule;

    • (b) where tax under Division III on the property in respect of that importation was calculated on a value determined under the Value of Imported Goods (GST/HST) Regulations, other than section 8 or 12 or a prescribed section of those Regulations; or

    • (c) in prescribed circumstances.

  • Marginal note:Importation of improvement

    (2) For the purposes of this Part (other than Division III and Schedule VII), where a person imports capital property of the person that was improved outside Canada and tax under Division III is payable on a value, determined under the Value of Imported Goods (GST/HST) Regulations, that does not exceed the value of the improvement, the importation shall be deemed to be an importation of the improvement.

  • Marginal note:Application before 1991

    (3) For the purposes of determining the last acquisition or importation of property, this Part shall be deemed to have been in force at all times before 1991.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1993, c. 27, s. 60
  • 2007, c. 18, s. 63

Marginal note:Intended and actual use

  •  (1) For the purposes of this Part, where a person at any time acquires or imports property for use to a particular extent in a particular way, the person shall be deemed to use the property immediately after that time to the particular extent in the particular way.

  • Marginal note:Intended and actual use

    (2) For the purposes of this Part, if a person at any time brings capital property of the person into a particular participating province from another province and the person was using the property to a particular extent in a particular way immediately after the property or a portion of the property was last acquired, imported or brought into a participating province by the person, the person is deemed to bring it into the particular participating province for use to the particular extent in the particular way.

  • [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. 61
  • 1997, c. 10, s. 186
  • 2009, c. 32, s. 12

Marginal note:Appropriation to use as capital property

 For the purposes of this Part, where a registrant, at a particular time, appropriates property of the registrant for use as capital property of the registrant or in improving capital property of the registrant and, immediately before the particular time, the property was not capital property of the registrant or an improvement to capital property of the registrant,

  • (a) the registrant shall be deemed

    • (i) to have made, immediately before the particular time, a supply of the property by way of sale, and

    • (ii) where the property was last acquired or imported by the registrant before the particular time for consumption, use or supply, or was consumed or used before the particular time, in the course of commercial activities of the registrant, to have collected, at the particular time, tax in respect of the supply calculated on the fair market value of the property at the particular time; and

  • (b) the registrant shall be deemed to have received, at the particular time, a supply of the property by way of sale and to have paid, at the particular time, tax in respect of the supply equal to

    • (i) where the property was last acquired or imported by the registrant before the particular time for consumption, use or supply, or was consumed or used before the particular time, in the course of commercial activities of the registrant and the supply is not an exempt supply, tax calculated on the fair market value of the property at the particular time, and

    • (ii) in any other case, the basic tax content of the property at the particular time.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1993, c. 27, s. 61
  • 1997, c. 10, s. 187
 

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