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Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations (SOR/2001-171)

Regulations are current to 2022-09-22 and last amended on 2019-03-04. Previous Versions

PART 2Percentage for a Participating Province (continued)

Determination of the Attribution Percentage

Marginal note:Basic rules

  •  (1) For the purposes of these Regulations, the description of C in subsection 225.2(2) of the Act and the description of D in subparagraph 237(5)(b)(ii) of the Act, a financial institution’s percentage for any participating province and for a particular period is determined in accordance with this Part.

  • Marginal note:Basic rules — real-time

    (2) For the purposes of these Regulations and the description of A3 in subsection 225.2(2) of the Act, as adapted by subsection 48(1) or (2), a financial institution’s percentage for any participating province as of a particular day, or a financial institution’s percentage for any series and for any participating province as of a particular day, as the case may require, is determined in accordance with this Part.

  • Marginal note:Basic rules — series

    (3) For the purposes of these Regulations and the description of A6 in subsection 225.2(2) of the Act, as adapted by subsection 48(1), a financial institution’s percentage for any series, for any participating province and for a particular period is determined in accordance with this Part.

  • SOR/2013-71, s. 2

Marginal note:Member of partnership

 For the purposes of this Part, if a selected listed financial institution is a member of a partnership during a particular period, the following rules apply:

  • (a) the financial institution’s gross revenue for the particular period is not to include any portion of the total gross revenue of the partnership; and

  • (b) the salaries and wages paid in the particular period by the financial institution is not to include any portion of the salaries and wages paid to employees of the partnership.

  • SOR/2013-71, s. 2

Marginal note:Central paymaster

  •  (1) For the purposes of this Part, if an individual is employed by a person (referred to in this section as the “employer”) and performs a service in a particular province for the benefit of or on behalf of a person (referred to in this section as the “labour recipient”) that is not the employer, an amount that may reasonably be regarded as equal to the amount of salary or wages (referred to in this section as the “particular salary”) earned by the individual for the service is deemed to be salary paid by the labour recipient to an employee of the labour recipient in the particular period of the labour recipient in which the particular salary is paid if

    • (a) at the time the service is performed,

      • (i) the labour recipient and the employer do not deal at arm’s length, and

      • (ii) the labour recipient has a permanent establishment in the particular province;

    • (b) the service

      • (i) is performed by the individual in the ordinary course of the individual’s employment by the employer,

      • (ii) is performed for the benefit of or on behalf of the labour recipient in the ordinary course of a business carried on by the labour recipient, and

      • (iii) is of a type that could reasonably be expected to be performed by employees of the labour recipient in the ordinary course of the business referred to in subparagraph (ii); and

    • (c) the amount is not otherwise included in the aggregate, determined for the purposes of this Part, of the salaries and wages paid by the labour recipient.

  • Marginal note:Deemed payments — permanent establishment

    (2) For the purposes of this Part, an amount deemed under subsection (1) to be salary paid by a labour recipient to an employee of the labour recipient for a service performed in a particular province is deemed to have been paid,

    • (a) if the service was performed at one or more permanent establishments of the labour recipient in the particular province, to an employee of the permanent establishment or establishments; or

    • (b) in any other case, to an employee of any other permanent establishment (as is reasonably determined in the circumstances) of the labour recipient in the particular province.

  • Marginal note:Particular salaries paid not included

    (3) For the determination under this Part of the amount of salaries and wages paid in a particular period by an employer, the total of all amounts each of which is a particular salary paid by the employer in the particular period is to be deducted.

  • Marginal note:Arm’s length transactions

    (4) Despite subparagraph (1)(a)(i), this section applies to a labour recipient and an employer that deal at arm’s length if the Minister determines that the labour recipient and the employer have entered into an arrangement the purpose of which is to reduce, through the provision of services as described in subsection (1), the net tax for a reporting period of the employer, the net tax for a reporting period of the labour recipient or an amount required to be paid to the Receiver General under section 237 of the Act.

  • SOR/2013-71, s. 2

General Rules for Individuals

Marginal note:No permanent establishment in participating province

  •  (1) Subject to this Part, if, in a particular period, a selected listed financial institution that is an individual does not have a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is nil.

  • Marginal note:Determination of percentage

    (2) Subject to this Part, if, in a particular period, a selected listed financial institution that is an individual has a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is 1/2 of the total of

    • (a) the percentage that its gross revenue for the particular period that is reasonably attributable to its permanent establishments in that province is of its total gross revenue for the particular period, and

    • (b) the percentage that the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in that province is of the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in Canada.

  • Marginal note:Special rules for attribution of gross revenue

    (3) For the purposes of applying subsection (2) and the definition total gross revenue in subsection 16(1) in relation to a financial institution that is an individual, gross revenue for a particular period of the financial institution is reasonably attributable to a particular permanent establishment if that gross revenue would be attributable to that permanent establishment under the rules set out in subsection 2603(4) of the Income Tax Regulations, if the financial institution were a taxpayer under the Income Tax Act and if the references in that subsection to a year and to gross revenue for the year were read as references to the particular period and to the gross revenue for the particular period, respectively.

  • Marginal note:Fees

    (4) For the purpose of subsection (2), if a financial institution pays a fee to another person under an agreement under which that other person or employees of that other person perform services for the financial institution that would normally be performed by the financial institution’s employees, the fee is deemed to be salary paid by the financial institution and the part of the fee that may reasonably be regarded as payment in respect of services rendered at a permanent establishment of the financial institution is deemed to be salary paid to an employee of the permanent establishment.

  • Marginal note:Commissions

    (5) For the purpose of subsection (4), a fee paid by a financial institution does not include a commission paid to a person that is not an employee of the financial institution.

  • SOR/2013-71, s. 2

General Rules for Corporations

Marginal note:No permanent establishment in participating province

  •  (1) Subject to this Part, if, in a particular period, a selected listed financial institution that is a corporation does not have a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is nil.

  • Marginal note:Determination of percentage

    (2) Subject to this Part, if, in a particular period, a selected listed financial institution that is a corporation has a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is

    • (a) except where paragraph (b) or (c) applies, 1/2 of the total of

      • (i) the percentage that its gross revenue for the particular period reasonably attributable to its permanent establishments in that province is of its total gross revenue for the particular period, and

      • (ii) the percentage that the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in that province is of the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in Canada;

    • (b) if its total gross revenue for the particular period is nil, the percentage that the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in the participating province is of the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in Canada; and

    • (c) if the total of all salaries and wages paid in the particular period by the financial institution to employees of its permanent establishments in Canada is nil, the percentage that its gross revenue for the particular period reasonably attributable to its permanent establishments in that province is of its total gross revenue for the particular period.

  • Marginal note:Special rules for attribution of gross revenue

    (3) For the purposes of applying subsection (2) and the definition total gross revenue in subsection 16(1) in relation to a financial institution that is not an individual, gross revenue for a particular period of the financial institution is reasonably attributable to a particular permanent establishment if that gross revenue would be attributable to that permanent establishment under the rules set out in subsections 402(4) and (4.1) and 413(1) of the Income Tax Regulations, if the financial institution were a taxpayer under the Income Tax Act and if the references in those subsections to a taxation year and to a year were read as references to the particular period.

  • Marginal note:Interest on various instruments

    (4) For the purpose of subsection (2), gross revenue does not include interest on bonds, debentures or mortgages, dividends on shares of capital stock, or rentals or royalties from property that is not used in connection with the principal business operations of the financial institution.

  • Marginal note:Fees

    (5) For the purpose of subsection (2), if a financial institution pays a fee to another person under an agreement under which that other person or employees of that other person perform services for the financial institution that would normally be performed by the financial institution’s employees, the fee is deemed to be salary paid by the financial institution and the part of the fee that may reasonably be regarded as payment in respect of services rendered at a permanent establishment of the financial institution is deemed to be salary paid to an employee of that permanent establishment.

  • Marginal note:Commissions

    (6) For the purpose of subsection (5), a fee paid by a financial institution does not include a commission paid to a person that is not an employee of the financial institution.

  • SOR/2013-71, s. 2

Insurers

Definition of net premiums

  •  (1) In this section, net premiums of a selected listed financial institution for a particular period means the total of the gross premiums received by the financial institution in the particular period (other than consideration received for annuities) minus the total for the particular period of

    • (a) premiums paid by the financial institution for reinsurance,

    • (b) dividends or rebates paid or credited by the financial institution to policy-holders, and

    • (c) rebates or returned premiums paid by the financial institution in respect of the cancellation of policies.

  • Marginal note:Determination of percentage

    (2) If a selected listed financial institution is an insurer, the financial institution’s percentage for a participating province and for a particular period in which it has a permanent establishment in that province is the amount, expressed as a percentage, determined by the formula

    A/B

    where

    A
    is the total of its net premiums for the particular period in respect of the insurance of risk in respect of property situated in the province and of its net premiums for the particular period in respect of the insurance of risk in respect of persons resident in that province, that are included in computing its income for the purposes of Part I of the Income Tax Act or that would be included in computing its income for the purposes of Part I of that Act if the financial institution were an insurance corporation; and
    B
    is the total of its net premiums for the particular period in respect of the insurance of risk in respect of property situated in Canada and of its net premiums for the particular period in respect of the insurance of risk in respect of persons resident in Canada, that are included in computing its income for the purposes of Part I of the Income Tax Act or that would be included in computing its income for the purposes of Part I of that Act if the financial institution were an insurance corporation.
  • Marginal note:Exclusions from net premiums

    (3) For the purposes of subsections (1) and (2), no amounts that relate to an insurance policy issued by a selected listed financial institution are to be included in the determination of the net premiums of the financial institution to the extent that

    • (a) if the policy is a life or accident and sickness insurance policy (other than a group policy), the policy is issued in respect of an individual who at the time the policy becomes effective, is a non-resident individual;

    • (b) if the policy is a group life or accident and sickness insurance policy, the policy relates to non-resident individuals who are insured under the policy;

    • (c) if the policy is a policy in respect of real property, the policy relates to real property situated outside Canada; and

    • (d) if the policy is a policy of any other kind, the policy relates to risks that are ordinarily situated outside Canada.

Banks and Credit Unions

[
  • SOR/2019-59, s. 18
]

Marginal note:Determination of percentage

  •  (1) If a selected listed financial institution is a bank or a credit union, the financial institution’s percentage for a particular period and for a participating province in which the financial institution has a permanent establishment is 1/5 of the total of

    • (a) the percentage that the total of all salaries and wages paid in the particular period by the financial institution to employees of its permanent establishments in that province is of the total of all salaries and wages paid in the particular period by the financial institution to employees of its permanent establishments in Canada, and

    • (b) four times the percentage that the total amount of loans and deposits of its permanent establishments in that province for the particular period is of the total amount of all loans and deposits of its permanent establishments in Canada for the particular period.

  • Marginal note:Amount of loans

    (2) For the purpose of subsection (1), the amount of loans for a particular period is the amount determined by the formula

    A/B

    where

    A
    is the total of the amounts outstanding on the loans made by the selected listed financial institution at the close of business on the last day of each calendar quarter that ends in the particular period; and
    B
    is the number of calendar quarters that end in the particular period.
  • Marginal note:Amount of deposits

    (3) For the purpose of subsection (1), the amount of deposits for a particular period is the amount determined by the formula

    A/B

    where

    A
    is the total of the amounts on deposit with the selected listed financial institution at the close of business on the last day of each calendar quarter that ends in the particular period; and
    B
    is the number of calendar quarters that end in the particular period.
  • Marginal note:Exclusion from loans and deposits

    (4) For the purposes of subsections (2) and (3), loans and deposits do not include

    • (a) bonds, stocks, debentures, items in transit and deposits in favour of Her Majesty in right of Canada; and

    • (b) any loan made to a non-resident person and any deposit held by a non-resident person, unless the loan or deposit is a debt or financial instrument included in any of paragraphs 1(a) to (e) of Part IX of Schedule VI to the Act.

  • Marginal note:Exclusion from salaries and wages

    (5) For the purposes of subsection (1), salaries and wages paid by a financial institution do not include salary or wages paid to an employee of the financial institution to the extent that the salary or wages are reasonably attributable to the rendering by the employee of services, the supply of which are zero-rated supplies.

 
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