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

Full Document:  

Act current to 2020-11-02 and last amended on 2020-07-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION IIGoods and Services Tax (continued)

SUBDIVISION CSpecial Cases (continued)

Marginal note:Rebates

 Where

  • (a) a registrant makes a taxable supply in Canada of property or a service (other than a zero-rated supply),

  • (b) a particular person acquires the property or service, either from the registrant or from another person,

  • (c) the registrant pays, at any time, a rebate in respect of the property or service to the particular person and therewith provides written indication that a portion of the rebate is an amount on account of tax, and

  • (d) subsection 232(3) does not apply to the rebate,

the following rules apply:

  • (e) the registrant may claim an input tax credit for the reporting period of the registrant that includes that time equal to the product obtained when the amount of the rebate is multiplied by the fraction (in this section referred to as the “tax fraction in respect of the rebate”)

    A/B

    where

    A
    is
    • (i) if tax under subsection 165(2) was payable in respect of the supply of the property or service to the particular person, the total of the rate set out in subsection 165(1) and the tax rate of the participating province in which that supply was made, and

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

    B
    is the total of 100% and the percentage determined for A, and
  • (f) where the particular person is a registrant who was entitled to claim an input tax credit, or a rebate under Division VI, in respect of the acquisition of the property or service, the particular person shall be deemed, for the purposes of this Part, to have made a taxable supply and to have collected, at that time, tax in respect of the supply equal to the amount determined by the formula

    A × (B/C) × D

    where

    A
    is the tax fraction in respect of the rebate,
    B
    is the input tax credit or rebate under Division VI that the particular person was entitled to claim in respect of the acquisition of the property or service,
    C
    is the tax payable by the particular person in respect of the acquisition of the property or service, and
    D
    is the amount of the rebate paid to the particular person by the registrant.
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1993, c. 27, s. 46
  • 1997, c. 10, s. 175
  • 2006, c. 4, s. 8

Marginal note:Gift certificates

 For the purposes of this Part, the issuance or sale of a gift certificate for consideration shall be deemed not to be a supply and, when given as consideration for a supply of property or a service, the gift certificate shall be deemed to be money.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1993, c. 27, s. 46

Marginal note:Definitions

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

    administrator

    administrator of a barter exchange network means the person who is responsible for administering, maintaining or operating a system of accounts, to which barter units may be credited, of members of the network. (administrateur)

    barter exchange network

    barter exchange network means a group of persons each member of which has agreed in writing to accept as full or partial consideration for the supply of property or services by that particular member to any other member of that group one or more credits (in this section referred to as “barter units”) on an account of the particular member maintained or operated by a single administrator of all such accounts of the members, which credits can be used as full or partial consideration for supplies of property or services between members of that group. (réseau de troc)

  • Marginal note:Application for designation

    (2) The administrator of a barter exchange network may make an application to the Minister, in prescribed form containing prescribed information and filed in prescribed manner, to have the network designated for the purposes of subsection (5).

  • Marginal note:Designation of barter exchange network

    (3) On application by an administrator of a barter exchange network under subsection (2), the Minister may designate the barter exchange network for the purposes of subsection (5), in which case the Minister shall notify the administrator in writing of the designation and its effective date.

  • Marginal note:Notification by administrator

    (4) On receipt of a notification by the Minister of a designation of a barter exchange network, the administrator of the network shall, within a reasonable time, notify each member of the network in writing of the designation and its effective date.

  • Marginal note:Exchange of barter unit

    (5) If a member of a barter exchange network or the administrator of a barter exchange network gives, while a designation of the network under subsection (3) is in effect, property, a service or money in exchange for a barter unit, the value of that property, service or money as consideration for the barter unit is, for the purposes of this Part and despite section 155, deemed to be nil.

  • Marginal note:Deemed non-financial services

    (6) For the purposes of this Part, each of the following is deemed not to be a financial service:

    • (a) the operation, maintenance or administration of a system of accounts, to which barter units can be credited, of members of a barter exchange network;

    • (b) the crediting of a barter unit to such an account;

    • (c) the supply, receipt or redemption of a barter unit; and

    • (d) the agreeing to provide, or the arranging for, anything referred to in any of paragraphs (a) to (c).

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

Marginal note:Forfeiture, extinguished debt, etc.

  •  (1) For the purposes of this Part, where at any time, as a consequence of the breach, modification or termination after 1990 of an agreement for the making of a taxable supply (other than a zero-rated supply) of property or a service in Canada by a registrant to a person, an amount is paid or forfeited to the registrant otherwise than as consideration for the supply, or a debt or other obligation of the registrant is reduced or extinguished without payment on account of the debt or obligation,

    • (a) the person is deemed to have paid, at that time, an amount of consideration for the supply equal to the amount determined by the formula

      (A/B) × C

      where

      A
      is 100%,
      B
      is
      • (i) if tax under subsection 165(2) was payable in respect of the supply, the total of 100%, 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 total of 100% and the rate set out in subsection 165(1), and

      C
      is the amount paid, forfeited or extinguished, or by which the debt or obligation was reduced, as the case may be; and
    • (b) the registrant is deemed to have collected, and the person is deemed to have paid, at that time, all tax in respect of the supply that is calculated on that consideration, which is deemed to be equal to

      • (i) where tax under subsection 165(2) was payable in respect of the supply, the total of the tax under that subsection and under subsection 165(1) calculated on that consideration, and

      • (ii) in any other case, tax under subsection 165(1) calculated on that consideration.

  • Marginal note:Transitional

    (2) Paragraph (1)(b) does not apply in respect of amounts paid or forfeited, and debts or other obligations reduced or extinguished, as a consequence of a breach, modification or termination of an agreement where

    • (a) the agreement was entered into in writing before 1991;

    • (b) the amount is paid or forfeited, or the debt or other obligation is reduced or extinguished, as the case may be, after 1992; and

    • (c) tax in respect of the amount paid, forfeited or extinguished, or by which the debt or obligation was reduced, as the case may be, was not contemplated in the agreement.

  • Marginal note:Application of Division IX

    (2.1) Division IX does not apply for the purposes of subsection (1).

  • Marginal note:Exception

    (3) Subsection (1) does not apply to that part of any amount paid or forfeited in respect of the breach, modification or termination of an agreement for the making of a supply where that part is

    • (a) an additional amount that is charged to a person because the consideration for the supply is not paid within a reasonable period and is such an amount referred to in section 161;

    • (b) an amount paid by one railway corporation to another railway corporation as or on account of a penalty for failure to return rolling stock within a stipulated time; or

    • (c) an amount paid as or on account of demurrage.

  • [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. 46
  • 1997, c. 10, ss. 32, 176
  • 2006, c. 4, s. 9
 
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