Marginal note:Delivery to consignee of a non-resident
179 (1) For the purposes of this Part, where
(a) a registrant, under an agreement between the registrant and a non-resident person who is not registered under Subdivision d of Division V,
(i) makes a taxable supply in Canada of tangible personal property by way of sale, or a taxable supply in Canada of a service of manufacturing or producing tangible personal property, to the non-resident person, or acquires physical possession of tangible personal property (other than property of a person who is resident in Canada or is registered under Subdivision d of Division V) for the purpose of making a taxable supply of a commercial service in respect of the property to the non-resident person, and
(ii) at any time causes physical possession of the property to be transferred, at a place in Canada, to a third person (in this subsection referred to as the “consignee”) or to the non-resident person, and
(b) the non-resident person is not a consumer of the property or service supplied by the registrant under the agreement,
the following rules apply:
(c) the registrant is deemed to have made to the non-resident person, and the non-resident person is deemed to have received from the registrant, a taxable supply of the property,
(c.1) where physical possession of the property was so transferred at a place in a participating province, that supply is, subject to subsections (2) and (3), deemed to have been made in that province,
(c.2) that supply is deemed to have been made for consideration, that becomes due and is paid at that time, equal to
(i) where the registrant has caused physical possession of the property to be transferred to a consignee to whom the non-resident person has supplied the property for no consideration, nil, and
(ii) in any other case, the fair market value of the property at that time, and
(d) where the registrant made a supply of a service referred to in subparagraph (a)(i) in respect of the property to the non-resident person, except in the case of a supply of a service of storing or shipping the property, the registrant is deemed not to have made that supply of the service.
Marginal note:Exception where delivery to registrant consignee of a non-resident
(2) For the purposes of this Part, where
(a) a registrant, under an agreement between the registrant and a non-resident person who is not registered under Subdivision d of Division V,
(i) makes a taxable supply in Canada of tangible personal property by way of sale, or a taxable supply in Canada of a service of manufacturing or producing tangible personal property, to the non-resident person, or acquires physical possession of tangible personal property (other than property of a person who is resident in Canada) for the purpose of making a taxable supply of a commercial service in respect of the property to the non-resident person, and
(ii) causes physical possession of the property to be transferred, at a place in Canada, to a third person (in this subsection referred to as the “consignee”) who is registered under Subdivision d of Division V,
(b) the non-resident person is not a consumer of the property or service supplied by the registrant under the agreement, and
(c) the consignee gives to the registrant, and the registrant retains, a certificate that
(i) states the consignee’s name and registration number assigned under subsection 241(1), and
(ii) acknowledges that the consignee, on taking physical possession of the property, is assuming liability to pay or remit any amount that is or may become payable or remittable by the consignee under subsection (1) or Division IV in respect of the property,
subsection (1) does not apply to a supply referred to in subparagraph (a)(i) and, except in the case of a supply of a service of shipping the property, any supply made by the registrant and referred to in that subparagraph is deemed to have been made outside Canada.
Marginal note:Exception where export
(3) For the purposes of this Part, where
(a) a registrant, under an agreement between the registrant and a non-resident person who is not registered under Subdivision d of Division V,
(i) makes a taxable supply in Canada of tangible personal property by way of sale to the non-resident person,
(ii) makes a taxable supply in Canada of a service of manufacturing or producing tangible personal property to the non-resident person, or
(iii) acquires physical possession of tangible personal property (other than the property of a person who is resident in Canada) for the purpose of making a taxable supply of a commercial service in respect of the property to the non-resident person,
(b) the non-resident person is not a consumer of the property or service supplied by the registrant under the agreement, and
(c) either
(i) the registrant causes physical possession of the property to be transferred to a person at a place outside Canada or to a carrier, or the registrant mails the property, for export and delivery to a person at a place outside Canada, or
(ii) all of the following conditions are met:
(A) the registrant causes physical possession of the property to be transferred at a place in Canada to the non-resident person or any other person (each of whom is referred to in this subparagraph as the “exporter”) for export,
(B) after physical possession of the property is transferred to the exporter, the exporter exports the property as soon as is reasonable having regard to the circumstances surrounding the exportation and, where applicable, the normal business practices of the exporter and the owner of the property,
(C) the property has not been acquired by the non-resident person or any owner of the property for consumption, use or supply in Canada at any time after physical possession of the property is transferred to the exporter and before the property is exported,
(D) after physical possession of the property is transferred to the exporter and before the property is exported, the property is not further processed, transformed or altered except to the extent reasonably necessary or incidental to its transportation, and
(E) the registrant maintains evidence satisfactory to the Minister of the exportation of the property or, where the exporter is authorized under subsection 221.1(2), the exporter provides the registrant with a certificate in which the exporter certifies that the property will be exported in the circumstances described in clauses (B) to (D),
subsection (1) does not apply to a supply referred to in paragraph (a) and, except in the case of a supply of a service of shipping the property, any supply made by the registrant and referred to in that paragraph is deemed to have been made outside Canada.
Marginal note:Retention of possession
(4) For the purposes of this section, section 180 and paragraph (b) of the definition imported taxable supply in section 217, where
(a) a particular registrant at any time transfers ownership of tangible personal property to a non-resident person, who is not registered under Subdivision d of Division V, under an agreement for the supply of the property, and
(b) the particular registrant, or another registrant who has physical possession of the property at that time and who gives the particular registrant a certificate described in paragraph (2)(c), retains physical possession of the property after that time for the purpose of
(i) transferring physical possession of the property to the non-resident person, a person (in this paragraph referred to as a “subsequent purchaser”) who subsequently acquires ownership of the property or a person designated by the non-resident person or a subsequent purchaser,
(ii) making a supply of a commercial service in respect of the property to the non-resident person or a subsequent purchaser, or
(iii) consumption, use or supply by that registrant under an agreement for a supply of the property made by way of sale or lease to that registrant by the non-resident person, by a subsequent purchaser or by a lessee or sub-lessee of the non-resident person or of the subsequent purchaser,
the following rules apply:
(c) where the particular registrant so retains physical possession of the property after that time, the particular registrant shall be deemed to have transferred physical possession of the property at that time to another registrant and to have obtained a certificate of the other registrant described in paragraph (2)(c) and to have acquired physical possession of the property at that time for the purpose referred to in paragraph (b), and
(d) where another registrant so retains physical possession of the property after that time, the particular registrant shall be deemed to have transferred physical possession of the property at that time to the other registrant and the other registrant shall be deemed to have acquired physical possession of the property at that time for the purpose referred to in paragraph (b).
Marginal note:Transfer of possession to bailee
(5) For the purposes of this section, section 180 and paragraph (b) of the definition imported taxable supply in section 217, where a registrant at any time transfers physical possession of tangible personal property to a bailee solely for the purpose of storing or shipping the property and either
(a) the bailee is a carrier to whom physical possession of the property has been transferred solely for the purpose of shipping the property, or
(b) the bailee has not, at or before that time, given the registrant a certificate described in paragraph (2)(c),
the following rules apply:
(c) where, under the agreement with the bailee for storing or shipping the property, the bailee is required to transfer physical possession of the property to a person, other than the registrant, who is named at that time in the agreement,
(i) the registrant shall be deemed to have transferred physical possession of the property to that person at that time and that person shall be deemed to have acquired physical possession of the property at that time, and
(ii) the registrant shall be deemed not to have transferred physical possession of the property to the bailee and the bailee shall be deemed not to have acquired physical possession of the property, and
(d) where, under the agreement with the bailee for storing or shipping the property, the bailee is required to transfer physical possession of the property to the registrant or to another person (in this paragraph referred to as the “consignee”) who is to be identified at a later time,
(i) the registrant shall be deemed to retain physical possession of the property, and the bailee shall be deemed not to have acquired physical possession of the property, throughout the period beginning at that time and ending at the earliest of
(A) the time the consignee becomes identified,
(B) the time the bailee transfers physical possession of the property to the registrant, and
(C) where the bailee is not a carrier to whom physical possession of the property has been transferred for the sole purpose of shipping the property, the time the bailee gives the registrant a certificate of the bailee described in paragraph (2)(c),
(ii) where the bailee is not a carrier to whom physical possession of the property has been transferred for the sole purpose of shipping the property and the bailee, at a particular time before the time the consignee becomes identified, gives the registrant a certificate of the bailee described in paragraph (2)(c), the registrant shall be deemed to have transferred physical possession of the property to the bailee at the particular time and the bailee shall be deemed to have acquired physical possession of the property at the particular time for the purpose of making a supply of a commercial service in respect of the property to the owner of the property under an agreement with the owner, and
(iii) where the consignee becomes identified at a particular time before the bailee gives the registrant a certificate of the bailee described in paragraph (2)(c) in circumstances described in subparagraph (ii), the registrant shall be deemed to have transferred physical possession of the property to the consignee at the particular time and the consignee shall be deemed to have acquired physical possession of the property at the particular time,
and, for the purposes of this paragraph, a consignee becomes identified at the earliest of
(iv) the time the registrant gives the consignee such documents in writing as are sufficient to enable the consignee to require the bailee to transfer physical possession of the property to the consignee,
(v) the time the registrant directs the bailee in writing to transfer physical possession of the property to the consignee, and
(vi) the time the bailee transfers physical possession of the property to the consignee.
Marginal note:Goods transferred to bailee by non-resident
(6) For the purposes of this section, section 180 and paragraph (b) of the definition imported taxable supply in section 217, where a non-resident person who is not registered under Subdivision d of Division V transfers physical possession of tangible personal property to a bailee who is a registrant for the sole purpose of storing or shipping the property and the bailee
(a) is a carrier who is acquiring physical possession of the property for the sole purpose of shipping the property, or
(b) does not claim an input tax credit in respect of the property,
the bailee shall be deemed not to have acquired physical possession of the property.
Marginal note:Use of railway rolling stock
(7) For the purpose of clause (3)(c)(ii)(C), if the only use of railway rolling stock after physical possession of it is transferred as described in that clause and before it is next exported is for the purpose of transporting tangible personal property or passengers in the course of that exportation and that exportation occurs within sixty days after the day on which the transfer takes place, that use of the rolling stock is deemed to take place entirely outside Canada.
- [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. 44
- 1997, c. 10, ss. 30, 173
- 2001, c. 15, s. 4
- Date modified: