Excise Tax Act

Marginal note:Definitions

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

  Canadian partnership

  société de personnes canadienne

  Canadian partnership means a partnership each member of which is a corporation or partnership and is resident in Canada. (société de personnes canadienne)

  distribution

  attribution

  distribution has the meaning assigned by subsection 55(1) of the Income Tax Act. (attribution)

  qualifying group

  groupe admissible

  qualifying group means

  • (a) a group of corporations, each member of which is closely related, within the meaning assigned by section 128, to each other member of the group; or

  • (b) a group of Canadian partnerships, or of Canadian partnerships and corporations, each member of which is closely related, within the meaning of this section, to each other member of the group. (groupe admissible)

  qualifying member

  membre admissible

  qualifying member of a qualifying group means a registrant that is a corporation resident in Canada or a Canadian partnership and that meets the following conditions:

  • (a) the registrant is a member of the group;

  • (b) the registrant is not a party to an election under subsection 150(1); and

  • (c) the registrant last manufactured, produced, acquired or imported all or substantially all of its property (other than financial instruments) for consumption, use or supply exclusively in the course of commercial activities of the registrant or, if the registrant has no property (other than financial instruments), all or substantially all of the supplies made by the registrant are taxable supplies. (membre admissible)

  secured creditor

  secured creditor[Repealed, 2000, c. 30, s. 25]

  security interest

  security interest[Repealed, 2000, c. 30, s. 25]

  specified member

  membre déterminé

  specified member of a qualifying group means

  • (a) a qualifying member of the group; or

  • (b) a temporary member of the group during the course of the reorganization referred to in paragraph (f) of the definition temporary member. (membre déterminé)

  temporary member

  membre temporaire

  temporary member of a qualifying group means a corporation

  • (a) that is a registrant;

  • (b) that is resident in Canada;

  • (c) that is a member of the qualifying group;

  • (d) that is not a qualifying member of the qualifying group;

  • (e) that is not a party to an election under subsection 150(1);

  • (f) that receives a supply of property made in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)(b)(i) of the Income Tax Act from the distributing corporation referred to in that subparagraph that is a qualifying member of the qualifying group;

  • (g) that, before receiving the supply, does not carry on any business or have any property (other than financial instruments); and

  • (h) the shares of which are transferred on the distribution. (membre temporaire)

• Marginal note:Closely related persons

  (1.1) For the purposes of this section, a particular Canadian partnership and another person that is a Canadian partnership or a corporation are closely related to each other at any time if, at that time,

  • (a) in the case where the other person is a Canadian partnership,

    • (i) all or substantially all of the interest in the other person is held by

      • (A) the particular partnership,

      • (B) a corporation, or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member, or

      • (C) any combination of corporations or partnerships referred to in clauses (A) and (B), or

    • (ii) the particular partnership

      • (A) owns at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the other person is a member, or

      • (B) holds all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the other person is a member; and

  • (b) in the case where the other person is a corporation,

    • (i) not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the other person are owned by

      • (A) the particular partnership,

      • (B) a corporation, or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member, or

      • (C) any combination of corporations or partnerships referred to in clauses (A) and (B),

    • (ii) not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation are owned by

      • (A) if the corporation is a member of a qualifying group of which the particular partnership is a member, the other person, and

      • (B) if the corporation is a member of a qualifying group of which the other person is a member, the particular partnership,

    • (iii) all or substantially all of the interest in the particular partnership is held by

      • (A) the other person,

      • (B) a corporation, or a Canadian partnership, that is a member of a qualifying group of which the other person is a member, or

      • (C) any combination of corporations or partnerships referred to in clauses (A) and (B), or

    • (iv) all or substantially all of the interest in a Canadian partnership is held by

      • (A) if the Canadian partnership is a member of a qualifying group of which the particular partnership is a member, the other person, and

      • (B) if the Canadian partnership is a member of a qualifying group of which the other person is a member, the particular partnership.

• Marginal note:Persons closely related to the same person

  (1.2) If, under subsection (1.1), two persons are closely related to the same corporation or partnership, or would be so related if each member of that partnership were resident in Canada, the two persons are closely related to each other for the purposes of this section.

• Marginal note:Interest in a partnership

  (1.3) For the purposes of this section, a person, or a group of persons, holds, at any time, all or substantially all of the interest in a partnership only if, at that time,

  • (a) the person, or every person in the group of persons, is a member of the partnership; and

  • (b) the person, or the members of the group collectively, as the case may be, is or are

    • (i) entitled to receive at least 90% of

      • (A) if the partnership had income for the last fiscal period (within the meaning of the Income Tax Act) of the partnership that ended before that time (or, if the partnership’s first fiscal period includes that time, for that period), the total of all amounts each of which is the share of that income from all sources that each member of the partnership is entitled to receive, or

      • (B) if the partnership had no income for the last fiscal period or the first fiscal period referred to in clause (A), as the case may be, the total of all amounts each of which is the share of the income of the partnership that each member of the partnership would be entitled to receive if the income of the partnership from each source were one dollar,

    • (ii) entitled to receive at least 90% of the total amount that would be paid to all members of the partnership (otherwise than as a share of any income of the partnership) if it were wound up at that time, and

    • (iii) able to direct the business and affairs of the partnership or would be so able if no secured creditor had any security interest in an interest in, or the property of, the partnership.

• Marginal note:Election for nil consideration

  (2) For the purposes of this Part, if at any time after 2014 a person that is a specified member of a qualifying group files an election made jointly by the person and another specified member of the group, every taxable supply made between the person and the other specified member at a time when the election is in effect is deemed to have been made for no consideration.

• Marginal note:Non-application

  (2.1) Subsection (2) does not apply to

  • (a) a supply by way of sale of real property;

  • (b) a supply of property, or of a service, that is not acquired by the recipient for consumption, use or supply exclusively in the course of commercial activities of the recipient; or

  • (c) a supply that is not a supply of property made in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)(b)(i) of the Income Tax Act, if the recipient of the supply is a temporary member.

• Marginal note:Cessation

  (3) An election under subsection (2) made jointly by a particular member of a qualifying group and another member of the group ceases to have effect on the earliest of

  • (a) the day on which the particular member ceases to be a specified member of the group,

  • (b) the day on which the other member ceases to be a specified member of the group, and

  • (c) the day on which the election is revoked jointly by those members.

• Marginal note:Form of election and revocation

  (4) An election under subsection (2) made jointly by a particular specified member of a qualifying group and another specified member of the group and a revocation of the election by those specified members shall

  • (a) be made in prescribed form containing prescribed information and specify the day (in this subsection referred to as the “effective day”) on which the election or revocation is to become effective; and

  • (b) be filed with the Minister in prescribed manner on or before

    • (i) the particular day that is the earlier of

      • (A) the day on or before which the particular specified member must file a return under Division V for the reporting period of the particular specified member that includes the effective day, and

      • (B) the day on or before which the other specified member must file a return under Division V for the reporting period of the other specified member that includes the effective day, or

    • (ii) any day after the particular day that the Minister may allow.

• Marginal note:Joint and several liability

  (5) A particular person and another person are jointly and severally, or solidarily, liable for all obligations under this Part that result upon, or as a consequence of, a failure to account for or pay as and when required under this Part an amount of net tax of the particular person or of the other person if that tax is attributable to a supply made at any time between the particular person and the other person and if

  • (a) an election under subsection (2) made jointly by the particular person and the other person

    • (i) is in effect at that time, or

    • (ii) ceased to be in effect before that time but the particular person and the other person are conducting themselves as if the election were in effect at that time; or

  • (b) the particular person and the other person purport to have jointly made an election under subsection (2) before that time and are conducting themselves as if an election under subsection (2) made jointly by the particular person and the other person were in effect at that time.