Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)

• 122 (1) Subparagraph 180(a)(ii) of the Act is replaced by the following:

  • (ii) if the particular person is a registrant, causes physical possession of tangible personal property (other than property of a person that is resident in Canada) to be transferred in Canada to the particular person in circumstances in which the particular person is acquiring physical possession of the property for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the non-resident person,

• (2) Subsection (1) applies in respect of supplies made after July 22, 2016.

• 123 (1) Paragraph 183(1)(b) of the French version of the Act is replaced by the following:

  • b) pour l’application de la présente partie, sauf les articles 193 et 257, cette fourniture est réputée avoir été effectuée sans contrepartie;

• (2) Paragraph 183(10.1)(d) of the French version of the Act is replaced by the following:

  • d) le rachat du bien est réputé en être une fourniture par vente effectuée sans contrepartie par l’acquéreur de la première fourniture au profit du débiteur;

124 Paragraph 184(1)(b) of the French version of the Act is replaced by the following:

• 125 (1) Paragraph (b) of the definition imported taxable supply in section 217 of the Act is replaced by the following:

  • (b) a taxable supply (other than a zero-rated or prescribed supply) of tangible personal property made by a non-resident person that is not registered under Subdivision D of Division V to a recipient that is a registrant if

    • (i) the recipient gives to another registrant a certificate described in paragraph 179(2)(d) in respect of an acquisition of physical possession of the property by the recipient, and

    • (ii) the recipient is not acquiring the property for consumption, use or supply exclusively in the course of its commercial activities or the property is a passenger vehicle that the recipient is acquiring for use in Canada as capital property in its commercial activities and that has a capital cost to the recipient exceeding the amount deemed under paragraph 13(7)(g) or (h) of the Income Tax Act to be the capital cost of the vehicle to the recipient for the purposes of section 13 of that Act;

• (2) The definition imported taxable supply in section 217 of the Act is amended by adding the following after paragraph (b):

  • (b.01) a taxable supply (other than a zero-rated or prescribed supply) of tangible personal property made by way of sale by a non-resident person that is not registered under Subdivision D of Division V to a recipient that is a registrant if

    • (i) the recipient gives to another registrant a certificate described in subparagraph 179(2.1)(e)(i) in respect of an acquisition of physical possession of the property by a third person, and

    • (ii) the recipient is not acquiring the property for consumption, use or supply exclusively in the course of its commercial activities or the property is a passenger vehicle that the recipient is acquiring for use in Canada as capital property in its commercial activities and that has a capital cost to the recipient exceeding the amount deemed under paragraph 13(7)(g) or (h) of the Income Tax Act to be the capital cost of the vehicle to the recipient for the purposes of section 13 of that Act;

• (3) Subparagraph (b.01)(i) of the definition imported taxable supply in section 217 of the Act, as enacted by subsection (2), is replaced by the following:

  • (i) the recipient gives to another registrant a certificate described in subparagraph 179(3)(c)(i) in respect of an acquisition of physical possession of the property by a third person, and

• (4) Paragraph (b.1) of the definition imported taxable supply in section 217 of the Act is replaced by the following:

  • (b.1) a taxable supply (other than a zero-rated or prescribed supply) of tangible personal property made by way of sale at a particular time by a non-resident person that is not registered under Subdivision D of Division V to a recipient that is a registrant if

    • (i) the recipient acquires physical possession of the property as the recipient of another supply of the property made by way of lease, licence or similar arrangement and either

      • (A) gives to another registrant a certificate described in paragraph 179(2)(d) in respect of that acquisition of physical possession of the property, or

      • (B) claims an input tax credit in respect of tax that is deemed to have been paid or payable by the recipient under subsection 178.8(2) or paragraph 180(d) in respect of the property, and

    • (ii) the recipient is not acquiring, as the recipient of the taxable supply, the property for consumption, use or supply exclusively in the course of its commercial activities or the property is a passenger vehicle that the recipient is acquiring for use in Canada as capital property in its commercial activities and that has a capital cost to the recipient exceeding the amount deemed under paragraph 13(7)(g) or (h) of the Income Tax Act to be the capital cost of the vehicle to the recipient for the purposes of section 13 of that Act;

• (5) Paragraph (f) of the definition permitted deduction in section 217 of the English version of the Act is replaced by the following:

  • (f) qualifying compensation of an employee of the qualifying taxpayer that is paid in the specified year by the qualifying taxpayer if the employee was primarily in Canada while performing the employee’s duties during the specified year;

• (6) Subsections (1), (3) and (4) apply in respect of supplies made after the day on which this Act receives royal assent.

• (7) Subsection (2) applies in respect of supplies made after July 22, 2016.

• 126 (1) The portion of subsection 217.1(6) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Qualifying rule for credits and rebates

    (6) If an amount (in this subsection referred to as a “qualifying expenditure”) of qualifying consideration, or of an external charge, of a qualifying taxpayer in respect of an outlay made, or expense incurred, outside Canada is greater than zero and, during a reporting period of the qualifying taxpayer during which the qualifying taxpayer is a registrant, tax under section 218.01 or subsection 218.1(1.2) in respect of the qualifying expenditure becomes payable by the qualifying taxpayer or is paid by the qualifying taxpayer without having become payable, the following rules apply for the purpose of determining an input tax credit or an eligible amount, as defined in subsection 261.01(1), of the qualifying taxpayer:

• (2) The portion of subsection 217.1(7) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Qualifying rule for credits and rebates — internal charge

    (7) If tax (in this subsection referred to as “internal tax”) under section 218.01 or subsection 218.1(1.2) in respect of an internal charge becomes payable by a qualifying taxpayer, or is paid by the qualifying taxpayer without having become payable, and the internal charge is determined based in whole or in part on the inclusion of an outlay made, or an expense incurred, outside Canada by the qualifying taxpayer, the following rules apply for the purpose of determining an input tax credit or an eligible amount, as defined in subsection 261.01(1), of the qualifying taxpayer:

• (3) Subsections (1) and (2) apply in respect of any claim period of a person, as defined in subsection 259(1) of the Act, that begins after September 22, 2009.

• (4) If, in assessing under section 297 of the Act a rebate under subsection 261.01(2) of the Act for a claim period of a pension entity, one or more particular amounts were not included as eligible amounts, as defined in subsection 261.01(1) of the Act, for the claim period in determining the amount of the rebate and, as a result of the application of subsections (1) and (2), those particular amounts are eligible amounts for the claim period, the pension entity is entitled until the day that is one year after the day on which this Act receives royal assent to request in writing that the Minister of National Revenue make an assessment, reassessment or additional assessment for the purpose of taking into account that those particular amounts are eligible amounts for the claim period and, on receipt of the request, the Minister must with all due dispatch

  • (a) consider the request; and

  • (b) under sections 296 and 297 of the Act assess, reassess or make an additional assessment of the rebate under subsection 261.01(2) of the Act for the claim period, and of any interest, penalty or other obligation of the person, solely for the purpose of taking into account that the particular amounts are eligible amounts for the claim period.

• (5) If, in assessing under section 296 of the Act the net tax for a reporting period of a qualifying employer, as defined in subsection 261.01(1) of the Act, of a pension plan that includes the day on which an election — made jointly under subsection 261.01(5), (6) or (9) of the Act by the qualifying employer and a pension entity of the pension plan — is filed with the Minister of National Revenue, an amount was not deducted under any of subsections 261.01(5), (6) and (9) of the Act and, as a result of the application of subsections (1) and (2), the amount may be deducted under any of subsections 261.01(5), (6) and (9) of the Act in determining the net tax for the reporting period, the qualifying employer is entitled until the day that is one year after the day on which this Act receives royal assent to request in writing that the Minister of National Revenue make an assessment, reassessment or additional assessment for the purpose of taking into account that the amount may be deducted under any of subsections 261.01(5), (6) and (9) of the Act in determining the net tax for the reporting period and, on receipt of the request, the Minister must with all due dispatch

  • (a) consider the request; and

  • (b) under section 296 of the Act assess, reassess or make an additional assessment of the net tax for the reporting period, and of any interest, penalty or other obligation of the qualifying employer, solely for the purpose of taking into account that the amount may be deducted under any of subsections 261.01(5), (6) and (9) of the Act in determining the net tax for the reporting period.

• 127 (1) The portion of paragraph 218.1(1)(a) of the Act before the formula is replaced by the following:

  • (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

• (2) The description of C in paragraph 218.1(1)(a) of the Act is replaced by the following:

  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

• (3) Subparagraph 218.1(1)(b)(ii) of the Act is replaced by the following:

  • (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

• (4) Clause (B) of the description of C in paragraph 218.1(1)(b) of the Act is replaced by the following:

  • (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.

• (5) The description of A₂ in the description of A in paragraph 218.1(1.2)(a) of the Act is replaced by the following:

  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

• (6) The description of B₂ in the description of B in paragraph 218.1(1.2)(a) of the Act is replaced by the following:

  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

• (7) The description of D in paragraph 218.1(1.2)(b) of the Act is replaced by the following:

  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.

• (8) Subsections (1) to (4) apply in respect of any supply made after July 22, 2016.

• (9) Subsections (5) to (7) apply in respect of any specified year of a person that ends after July 22, 2016.

• 128 (1) Subsection 220.05(3.1) of the Act is amended by striking out “or” at the end of paragraph (a) and by replacing paragraph (b) with the following:

  • (b) the amount determined for the pension plan under the description of B in paragraph 172.1(5.1)(c) in respect of a supply of the same property that is deemed to have been made by the participating employer under paragraph 172.1(5.1)(a) is greater than zero;

  • (c) the amount determined for B in paragraph 172.1(6)(c) in respect of every supply deemed to have been made under paragraph 172.1(6)(a) of an employer resource (as defined in subsection 172.1(1)) consumed or used for the purpose of making the particular supply is greater than zero; or

  • (d) the amount determined for the pension plan under the description of B in paragraph 172.1(6.1)(c) in respect of every supply deemed to have been made under paragraph 172.1(6.1)(a) of an employer resource (as defined in subsection 172.1(1)) consumed or used for the purpose of making the particular supply is greater than zero.

• (2) Subsection (1) is deemed to have come into force on July 22, 2016.

• 129 (1) Subsection 220.08(1) of the Act is replaced by the following:

  Marginal note:Tax in participating province

  • 220.08 (1) Subject to this Part, every person that is resident in a participating province and is the recipient of a taxable supply made in a particular province of intangible personal property or a service that is acquired by the person for consumption, use or supply in whole or in part in any participating province that is not the particular province must 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, tax equal to the amount determined in prescribed manner.

• (2) Subsection 220.08(3.1) of the Act is amended by striking out “or” at the end of paragraph (a) and by replacing paragraph (b) with the following:

  • (b) the amount determined for the pension plan under the description of B in paragraph 172.1(5.1)(c) in respect of a supply of the same property or service that is deemed to have been made by the participating employer under paragraph 172.1(5.1)(a) is greater than zero;

  • (c) the amount determined for B in paragraph 172.1(6)(c) in respect of every supply deemed to have been made under paragraph 172.1(6)(a) of an employer resource (as defined in subsection 172.1(1)) consumed or used for the purpose of making the particular supply is greater than zero; or

  • (d) the amount determined for the pension plan under the description of B in paragraph 172.1(6.1)(c) in respect of every supply deemed to have been made under paragraph 172.1(6.1)(a) of an employer resource (as defined in subsection 172.1(1)) consumed or used for the purpose of making the particular supply is greater than zero.

• (3) Subsection (1) applies in respect of any supply made after July 22, 2016.

• (4) Subsection (2) is deemed to have come into force on July 22, 2016.