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

SUBDIVISION B.3Information Returns

Marginal note:Definitions

• 273.2 (1) The following definitions apply in this section and section 284.1.

  actual amount

  actual amount means any amount that is required to be reported in an information return that a person is required to file under subsection (3) for a fiscal year of the person and that is

  • (a) a tax amount for the fiscal year or a previous fiscal year of the person; or

  • (b) an amount calculated using only tax amounts for the fiscal year or a previous fiscal year of the person, unless all of those tax amounts are required to be reported in the information return. (montant réel)

  tax amount

  tax amount for a fiscal year of a person means an amount that

  • (a) is tax paid or payable (other than tax paid or payable under Division II), or is tax that is deemed under this Part to have been paid or become payable, by the person at any time during the fiscal year;

  • (b) became collectible or was collected, or is deemed under this Part to have become collectible or to have been collected, by the person as or on account of tax under Division II in a reporting period of the person in the fiscal year;

  • (c) is an input tax credit for a reporting period of the person in the fiscal year;

  • (d) is an amount that is required to be added or that may be deducted in determining net tax for a reporting period of the person in the fiscal year; or

  • (e) is required under this Part to be used in calculating or determining any amount described in paragraph (b) or (d), other than

    • (i) an amount that is consideration for a supply,

    • (ii) an amount that is the value of property or a service, or

    • (iii) a percentage. (montant de taxe)

• Marginal note:Reporting institution

  (2) For the purposes of this section and section 284.1, a person, other than a prescribed person or a person of a prescribed class, is a reporting institution throughout a fiscal year of the person if

  • (a) the person is a financial institution at any time in the fiscal year;

  • (b) the person is a registrant at any time in the fiscal year; and

  • (c) the total of all amounts each of which is an amount included in computing, for the purposes of the Income Tax Act, the person’s income, or, if the person is an individual, the person’s income from a business, for the last taxation year of the person that ends in the fiscal year, exceeds the amount determined by the formula

    $2,000,000 × A ÷ 365

    where

    A

    is the number of days in the taxation year.

• Marginal note:Information return for reporting institution

  (3) A reporting institution shall file an information return with the Minister for a fiscal year of the reporting institution in prescribed form containing prescribed information on or before the day that is six months after the end of the fiscal year.

• Marginal note:Estimates

  (4) Every reporting institution that is required to report, in an information return filed under subsection (3), an amount (other than an actual amount) that is not reasonably ascertainable at the time on or before which the information return is required to be filed shall provide a reasonable estimate of the amount in the information return.

• Marginal note:Ministerial exemption

  (5) The Minister may exempt any reporting institution or class of reporting institutions from the requirement, under subsection (3), to provide any prescribed information or may allow any reporting institution or class of reporting institutions to provide a reasonable estimate of any actual amount that is required to be reported in an information return under that subsection.

Marginal note:Electronic funds transfer

273.3 For greater certainty, information obtained by the Minister under Part XV.1 of the Income Tax Act may be used for the purposes of this Part.

SUBDIVISION CAnti-avoidance

Marginal note:Definitions

• 274 (1) In this section,

  tax benefit

  tax benefit means a reduction, an avoidance or a deferral of tax or other amount payable under this Part or an increase in a refund or rebate of tax or other amount under this Part; (avantage fiscal)

  tax consequences

  tax consequences to a person means the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, the person under this Part, or any other amount that is relevant to the purposes of computing that amount; (attribut fiscal)

  transaction

  transaction includes an arrangement or event. (opération)

• Marginal note:General anti-avoidance provision

  (2) Where a transaction is an avoidance transaction, the tax consequences to a person shall be determined as is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that include that transaction.

• Marginal note:Avoidance transaction

  (3) An avoidance transaction means any transaction

  • (a) that, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit; or

  • (b) that is part of a series of transactions, which series, but for this section, would result directly or indirectly in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit.

• Marginal note:Provision not applicable

  (4) For greater certainty, subsection (2) does not apply in respect of a transaction where it may reasonably be considered that the transaction would not result, directly or indirectly, in a misuse of the provisions of this Part or in an abuse having regard to the provisions of this Part (other than this section) read as a whole.

• Marginal note:Determination of tax consequences

  (5) Without restricting the generality of subsection (2),

  • (a) any input tax credit or any deduction in computing tax or net tax payable may be allowed or disallowed, in whole or in part,

  • (b) any such credit or deduction or a part thereof may be allocated to any person,

  • (c) the nature of any payment or other amount may be recharacterized, and

  • (d) the tax effects that would otherwise result from the application of other provisions of this Part may be ignored,

  in determining the tax consequences to a person as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction.

• Marginal note:Request for adjustments

  (6) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day of sending of the notice, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

• Marginal note:Exception

  (7) Notwithstanding any other provision of this Part, the tax consequences to any person following the application of this section shall only be determined through a notice of assessment, reassessment or additional assessment involving the application of this section.

• Marginal note:Duties of Minister

  (8) On receipt of a request by a person under subsection (6), the Minister shall, with all due dispatch, consider the request and, notwithstanding subsections 298(1) and (2), assess, reassess or make an additional assessment with respect to the person, except that an assessment, a reassessment or an additional assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (6).

Marginal note:Rate change — variation of agreement

274.1 If

• (a) at any time before July 1, 2006, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

• (b) the supplier and the recipient at a later time either directly or indirectly

  • (i) vary or alter the agreement for the supply, or

  • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

• (c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

• (d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 7% on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

• (e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 6% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 7%, and

• (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

• (g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate of 7% on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

Marginal note:Variation of agreement — 2008 rate reduction

274.11 If

• (a) at any time before January 1, 2008, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

• (b) the supplier and the recipient at a later time either directly or indirectly

  • (i) vary or alter the agreement for the supply, or

  • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

• (c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

• (d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 6% or 7%, as the case may be, on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

• (e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 5% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 6% or 7%, as the case may be, and

• (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

• (g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate at which tax would have been calculated under paragraph (d) on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

Marginal note:Definitions

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

  person

  person does not include a consumer. (personne)

  rate change

  rate change means any change in any rate of tax imposed under this Part. (modification de taux)

  tax benefit

  tax benefit means a reduction, an avoidance or a deferral of tax or other amount payable under this Part or an increase in a refund or rebate of tax or other amount under this Part. (avantage fiscal)

  transaction

  transaction has the meaning assigned by subsection 274(1). (opération)

• Marginal note:Rate change — transactions

  (2) If

  • (a) a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made,

  • (b) the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and

  • (c) it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from a rate change, for one or more of the persons involved in the transaction or series of transactions,

  the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under this Part, or any other amount that is relevant for the purposes of computing that amount shall be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons.

• Marginal note:Denying tax benefit on transactions

  (3) Despite any other provision of this Part, a tax benefit shall only be denied under subsection (2) through an assessment, reassessment or additional assessment.

• Marginal note:Request for adjustments

  (4) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day on which the notice was sent, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

• Marginal note:Duties of Minister

  (5) On receipt of a request by a person under subsection (4), the Minister shall, with all due dispatch, consider the request and, despite subsections 298(1) and (2), assess, reassess or make an additional assessment with respect to the person, except that an assessment, a reassessment or an additional assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4).