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

Full Document:  

Act current to 2024-02-06 and last amended on 2024-01-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION IVTax on Imported Taxable Supplies (continued)

Marginal note:Imposition of goods and services tax

 Subject to this Part, every recipient of an imported taxable supply shall pay to Her Majesty in right of Canada tax calculated at the rate of 5% on the value of the consideration for the imported taxable supply.

  • [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. 203
  • 2006, c. 4, s. 20
  • 2007, c. 35, s. 187

Marginal note:Imposition of goods and services tax

 Subject to this Part, every qualifying taxpayer shall, for each specified year of the qualifying taxpayer, pay to Her Majesty in right of Canada tax calculated at the rate of 5% on

  • (a) if an election under subsection 217.2(1) is in effect for the specified year, the amount determined by the formula

    A + B

    where

    A
    is the total of all amounts, each of which is an internal charge for the specified year that is greater than zero, and
    B
    is the total of all amounts, each of which is an external charge for the specified year that is greater than zero; and
  • (b) in any other case, the total of all amounts, each of which is qualifying consideration for the specified year that is greater than zero.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2010, c. 12, s. 63

Marginal note:Tax in participating province

  •  (1) Subject to this Part,

    • (a) every person that is resident in a participating province and is the recipient of an imported taxable supply that is a supply of intangible personal property or a service that is acquired by the person for consumption, use or supply in participating provinces to an extent that is prescribed must, for each time an amount of consideration for the supply becomes due or is paid without having become due and for each participating province, pay to Her Majesty in right of Canada, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

      A × B × C

      where

      A
      is the tax rate for the participating province,
      B
      is the value of that consideration that is paid or becomes due at that time, and
      C
      is the extent (expressed as a percentage) to which the person acquired the property or service for consumption, use or supply in the participating province; and
    • (b) every person that

      • (i) is a registrant and is the recipient of a supply, included in paragraph (b) of the definition imported taxable supply in section 217, of property the physical possession of which is transferred to the registrant in a particular participating province,

      • (ii) is the recipient of a supply, included in any of paragraphs (b.01) to (b.3) of the definition imported taxable supply in section 217, of property that is delivered or made available to the person in a particular participating province and is either resident in that province or is a registrant, or

      • (iii) is the recipient of a supply that is included in paragraph (c.1), (d) or (e) of the definition imported taxable supply in section 217 and that is made in a particular participating province

      shall pay to Her Majesty in right of Canada, each time an amount of consideration for the supply becomes due or is paid without having become due, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

      A × B × C

      where

      A
      is the tax rate for the particular participating province,
      B
      is the value of that consideration that is paid or becomes due at that time, and
      C
      is
      • (A) in the case of an imported taxable supply of tangible personal property, 100%, and

      • (B) in any other case, the extent (expressed as a percentage) to which the person acquired the property for consumption, use or supply in the particular participating province.

  • Marginal note:Delivery in a province

    (1.1) Section 3 of Part II of Schedule IX applies for the purpose of subparagraph (1)(b)(ii).

  • Marginal note:Tax in a participating province

    (1.2) Subject to this Part, every qualifying taxpayer that is resident in a participating province shall, for each specified year of the qualifying taxpayer and for each particular participating province, pay to Her Majesty in right of Canada, in addition to the tax payable under section 218.01, tax calculated at the tax rate for the particular participating province on

    • (a) if an election under subsection 217.2(1) is in effect for the specified year, the amount determined by the formula

      A + B

      where

      A
      is the total of all amounts, each of which is an amount in respect of an internal charge for the specified year that is greater than zero determined by the formula

      A1 × A2

      where

      A1
      is the internal charge, and
      A2
      is the extent (expressed as a percentage) to which the internal charge is attributable to outlays or expenses that were made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the internal charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province, and
      B
      is the total of all amounts, each of which is an amount in respect of an external charge for the specified year that is greater than zero determined by the formula

      B1 × B2

      where

      B1
      is the external charge, and
      B2
      is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the external charge, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the external charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province; and
    • (b) in any other case, the total of all amounts, each of which is an amount in respect of qualifying consideration for the specified year that is greater than zero determined by the formula

      C × D

      where

      C
      is the qualifying consideration, and
      D
      is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the qualifying consideration, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the qualifying consideration is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province.
  • Marginal note:Qualifying taxpayer resident in a province

    (1.3) Despite section 132.1 and for the purposes of subsection (1.2), a qualifying taxpayer is deemed to be resident in a province at any time if, at that time,

    • (a) the qualifying taxpayer has a qualifying establishment in the province; or

    • (b) in the case of a qualifying taxpayer that is resident in Canada, the qualifying taxpayer is

      • (i) a corporation incorporated or continued under the laws of the province and not continued elsewhere,

      • (ii) an entity that is a partnership, an unincorporated society, a club, an association or an organization, or a branch of such an entity, in respect of which a majority of the members having management and control of the entity or branch are resident in the province, or

      • (iii) a trust, carrying on activities as a trust in the province, that has a local office or branch in the province.

  • Marginal note:Selected listed financial institutions

    (2) If tax under subsection (1) or (1.2) would, in the absence of this subsection, become payable by a person when the person is a selected listed financial institution, that tax is not payable unless it is an amount of tax that

    • (a) is prescribed for the purposes of paragraph (a) of the description of F in subsection 225.2(2);

    • (b) is in respect of an imported taxable supply of property or a service acquired otherwise than for consumption, use or supply in the course of an endeavour (as defined in subsection 141.01(1)) of the person; or

    • (c) is a prescribed amount.

  • Marginal note:Application in offshore areas

    (3) Subsection (1) does not apply to

    • (a) an imported taxable supply of intangible personal property or a service made to a person who is resident in the Nova Scotia offshore area or the Newfoundland offshore area unless the property or service is acquired by the person for consumption, use or supply in the course of an offshore activity or the person is also resident in a participating province that is not an offshore area; or

    • (b) an imported taxable supply of tangible personal property the physical possession of which is transferred, or that is delivered or made available, to the recipient of the supply in the Nova Scotia offshore area or the Newfoundland offshore area unless the property is acquired by the recipient for consumption, use or supply in the course of an offshore activity.

  • Marginal note:Use in offshore areas

    (4) For the purposes of subsection (1), a person that acquires property or a service for consumption, use or supply in the Nova Scotia offshore area or the Newfoundland offshore area is deemed to acquire the property or service for consumption, use or supply in that area only to the extent that it is acquired for consumption, use or supply in that area in the course of an offshore activity.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1997, c. 10, s. 203
  • 2000, c. 30, s. 46
  • 2001, c. 15, s. 8
  • 2007, c. 35, s. 3
  • 2009, c. 32, s. 14
  • 2010, c. 12, ss. 64, 95
  • 2012, c. 31, s. 76
  • 2017, c. 33, s. 127

Marginal note:When tax payable

 Tax under this Division (other than tax under section 218.01 or subsection 218.1(1.2)) that is calculated on an amount of consideration for a supply that becomes due at any time, or is paid at any time without having become due, becomes payable at that time.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1997, c. 10, s. 203
  • 2010, c. 12, s. 65

Marginal note:When tax payable

 Tax under section 218.01 and subsection 218.1(1.2) that is determined for a specified year of a qualifying taxpayer becomes payable by the qualifying taxpayer on

  • (a) if the specified year is a taxation year of the qualifying taxpayer for the purposes of the Income Tax Act and the qualifying taxpayer is required under Division I of that Act to file a return of income for the specified year, the filing-due date for the specified year for the purposes of that Act; and

  • (b) in any other case, the day that is six months after the end of the specified year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2010, c. 12, s. 65

Marginal note:Filing of returns and payment of tax

 Where tax under this Division is payable by a person,

  • (a) if the person is a registrant, the person shall, on or before the day on or before which the person’s return under section 238 for the reporting period in which the tax became payable is required to be filed, pay the tax to the Receiver General and

    • (i) if the person is not a qualifying taxpayer, report the tax in that return, or

    • (ii) if the person is a qualifying taxpayer, file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information; and

  • (b) in any other case, the person shall, on or before the last day of the month following the calendar month in which the tax became payable, 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.

  • [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. 43
  • 2010, c. 12, s. 66

Marginal note:Definitions

  •  (1) The following definitions apply in this section.

    intangible capital

    intangible capital of a specified person means any of the following that is consumed or used by the specified person in the process of creating, developing or bringing into existence intangible personal property:

    • (a) all or part of a labour activity of the specified person;

    • (b) all or part of property (other than intangible personal property described in paragraph (a) of the definition intangible resource); or

    • (c) all or part of a service. (capital incorporel)

    intangible resource

    intangible resource of a specified person means

    • (a) all or part of intangible personal property supplied to, or created, developed or brought into existence by, the specified person that is not support capital of the specified person;

    • (b) intangible capital of the specified person; or

    • (c) any combination of the items referred to in paragraphs (a) and (b). (ressource incorporelle)

    labour activity

    labour activity of a specified person means anything done by an employee of the specified person in the course of, or in relation to, the office or employment of the employee. (activité de main-d’oeuvre)

    support capital

    support capital of a specified person means all or part of intangible personal property that is consumed or used by the specified person in the process of creating, developing or bringing into existence property (other than intangible personal property) or in supporting, assisting or furthering a labour activity of the specified person. (capital d’appui)

    support resource

    support resource of a specified person means

    • (a) all or part of property (other than intangible personal property) supplied to, or created, developed or brought into existence by, the specified person that is not intangible capital of the specified person;

    • (b) all or part of a service supplied to the specified person that is not intangible capital of the specified person;

    • (c) all or part of a labour activity of the specified person that is not intangible capital of the specified person;

    • (d) support capital of the specified person; or

    • (e) any combination of the items referred to in paragraphs (a) to (d). (ressource d’appui)

  • Marginal note:Specified person and specified business

    (2) For the purposes of this section,

    • (a) a person (other than a financial institution) is a specified person throughout a taxation year of the person if the person

      • (i) carries on, at any time in the taxation year, a business through a permanent establishment of the person outside Canada, and

      • (ii) carries on, at any time in the taxation year, a business through a permanent establishment of the person in Canada; and

    • (b) a business of a person is a specified business of the person throughout a taxation year of the person if the business is carried on, at any time in the taxation year, in Canada through a permanent establishment of the person.

  • Marginal note:Internal use

    (3) For the purposes of this section, internal use of a support resource, or of an intangible resource, of a specified person occurs during a taxation year of the specified person if

    • (a) the specified person at any time in the taxation year uses outside Canada any part of the resource in relation to the carrying on of a specified business of the specified person; or

    • (b) the specified person is permitted under the Income Tax Act, or would be so permitted if that Act applied to the specified person, to allocate for the taxation year, as an amount in respect of a specified business of the specified person,

      • (i) any part of an outlay made, or expense incurred, by the specified person in respect of any part of the resource, or

      • (ii) any part of an allowance, or allocation for a reserve, in respect of any part of such an outlay or expense.

  • Marginal note:Dealings between permanent establishments

    (4) If internal use of a support resource of a specified person occurs during a taxation year of the specified person, the following rules apply:

    • (a) for the purposes of this Division, the specified person is deemed

      • (i) to have rendered, during the taxation year, a service of internally using the support resource at a permanent establishment of the specified person outside Canada in the course of carrying on a specified business of the specified person, and to be the person to which the service was rendered,

      • (ii) to be the recipient of a supply made outside Canada of the service, and

      • (iii) to be, in the case of a non-resident specified person, resident in Canada;

    • (b) for the purposes of this Division, the supply is deemed not to be a supply of a service that is in respect of

      • (i) real property situated outside Canada, or

      • (ii) tangible personal property that is situated outside Canada at the time the service is performed;

    • (c) for the purposes of this Division, the value of the consideration for the supply is deemed to be the total of all amounts, each of which is the fair market value of a part, or of the use of a part, as the case may be, of the support resource referred to in subsection (3)

      • (i) if the part is only referred to in paragraph (3)(a), at the time referred to in that paragraph, and

      • (ii) otherwise, on the last day of the taxation year;

    • (d) for the purposes of this Division, the consideration for the supply is deemed to have become due and to have been paid, on the last day of the taxation year, by the specified person; and

    • (e) for the purposes of section 217 and of determining an input tax credit of the specified person under this Part, the specified person is deemed to have acquired the service for the same purpose as that for which the part of the support resource referred to in subsection (3) was acquired, consumed or used by the specified person.

  • Marginal note:Dealings between permanent establishments

    (5) If internal use of an intangible resource of a specified person occurs during a taxation year of the specified person, the following rules apply:

    • (a) for the purposes of this Division, the specified person is deemed

      • (i) to have made available, during the taxation year, at a permanent establishment of the specified person outside Canada intangible personal property in the course of carrying on a specified business of the specified person and to be the person to which the property was made available,

      • (ii) to be the recipient of a supply made outside Canada of the property, and

      • (iii) to be, in the case of a non-resident specified person, resident in Canada;

    • (b) for the purposes of this Division, the supply is deemed not to be a supply of property that relates to real property situated outside Canada, to a service to be performed wholly outside Canada or to tangible personal property situated outside Canada;

    • (c) for the purposes of this Division, the value of the consideration for the supply is deemed to be the total of all amounts, each of which is the fair market value of a part, or of the use of a part, as the case may be, of the intangible resource referred to in subsection (3)

      • (i) if the part is only referred to in paragraph (3)(a), at the time referred to in that paragraph, and

      • (ii) otherwise, on the last day of the taxation year;

    • (d) for the purposes of this Division, the consideration for the supply is deemed to have become due and to have been paid, on the last day of the taxation year, by the specified person; and

    • (e) for the purposes section 217 and of determining an input tax credit of the specified person under this Part, the specified person is deemed to have acquired the property for the same purpose as that for which the part of the intangible resource referred to in subsection (3) was acquired, consumed or used by the specified person.

  • [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. 84
  • 2010, c. 12, s. 67
 

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