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Games of Chance (GST/HST) Regulations (SOR/91-28)

Regulations are current to 2020-09-09 and last amended on 2019-03-04. Previous Versions

PART 3Net Tax of Prescribed Registrants (continued)

Net Tax of Provincial Gaming Authority

Marginal note:Total net tax

 The net tax of a provincial gaming authority for a reporting period of the authority is the positive or negative amount determined by the formula

A + B

where

A
is the authority’s net tax for the period attributable to gaming activities determined in accordance with section 7; and
B
is the authority’s positive or negative net tax for the period attributable to non-gaming activities determined in accordance with section 8.
  • SOR/98-440, s. 6

Marginal note:Net tax attributable to gaming activities

  •  (1) A provincial gaming authority’s net tax attributable to gaming activities for a reporting period of the authority is the amount determined by the formula

    A - B

    where

    A
    is the total of all amounts that the authority is required under subsection (2) or (3) to add in determining its net tax for the period; and
    B
    is the total of all credits of the authority for the period in respect of prizes or winnings determined under subsection (4) or (5) and the authority’s additional credit in respect of gaming activities for the period determined under subsection (6).
  • Marginal note:Bet received

    (2) Where a person bets an amount with a provincial gaming authority (other than by purchasing an instant win ticket from a distributor of the authority), the authority shall, in determining its net tax attributable to gaming activities for the reporting period in which it becomes ascertainable whether an amount is payable as a prize or winnings in respect of the bet, add the amount determined by the formula

    (A/B) × (C - D)

    where

    A
    is
    • (a) if the person placed the bet in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and

    • (b) in any other case, the rate set out in subsection 165(1) of the Act;

    B
    is the total of 100% and the percentage determined for A;
    C
    is the total amount that is given by the person in respect of the bet, including any amounts payable by the person in respect of the bet as or on account of tax under Part IX of the Act or under an Act of the legislature of a province; and
    D
    is the amount of any tax payable under an Act of the legislature of a province by the person in respect of the bet.
  • Marginal note:Supply of instant win ticket

    (3) Where a provincial gaming authority has delivered or agreed to deliver an instant win ticket to a distributor of the authority and, during a reporting period of the authority, the distributor pays or becomes liable to pay an amount in respect of the ticket to the authority, the authority shall, in determining its net tax attributable to gaming activities for the period, add the amount determined by the formula

    (A/B) × (C - D)

    where

    A
    is
    • (a) if the instant win ticket was or is to be delivered to the distributor in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and

    • (b) in any other case, the rate set out in subsection 165(1) of the Act;

    B
    is the total of 100% and the percentage determined for A;
    C
    is the face value of the ticket, including any amounts payable by the distributor in respect of the ticket as or on account of tax under an Act of the legislature of a province; and
    D
    is the amount of any tax payable under an Act of the legislature of a province by the distributor in respect of the ticket.
  • Marginal note:Prizes and winnings

    (4) A credit of a provincial gaming authority for a reporting period of the authority in respect of an amount of money that the authority becomes liable, during the period, to pay as a prize or winnings in a game of chance conducted by the authority (other than a prize or winnings in respect of a bet made by purchasing an instant win ticket from a distributor of the authority) is the amount determined by the formula

    (A/B) × C

    where

    A
    is
    • (a) if the bet in respect of which the prize or winnings becomes payable was placed in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and

    • (b) in any other case, the rate set out in subsection 165(1) of the Act;

    B
    is the total of 100% and the percentage determined for A; and
    C
    is the amount payable as a prize or winnings.
  • Marginal note:Prize on instant win ticket

    (5) A credit of a provincial gaming authority for a reporting period of the authority in respect of a prize or winnings in respect of an instant win ticket of a particular kind that the authority has delivered or agreed to deliver to a distributor of the authority and in respect of which the distributor pays or becomes liable to pay, during the period, an amount to the authority is the amount determined by the formula

    (A/B) × C

    where

    A
    is
    • (a) if the instant win ticket was or is to be delivered to the distributor in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and

    • (b) in any other case, the rate set out in subsection 165(1) of the Act;

    B
    is the total of 100% and the percentage determined for A; and
    C
    is the expected value, determined on the basis of mathematical probability, of the prize or winnings in respect of each instant win ticket of that kind supplied by the authority.
  • Marginal note:Additional credit

    (6) A provincial gaming authority’s additional credit in respect of gaming activities for a reporting period of the authority is the amount determined by the formula

    A - B - C

    where

    A
    is the total of all amounts each of which is an amount that the authority is required, under subsection (2) or (3), to add in determining its net tax for the period;
    B
    is the total of all amounts each of which is a credit of the authority in respect of a prize or winnings for the period determined under subsection (4) or (5); and
    C
    is the imputed tax payable by the authority on gaming expenses for the period determined under subsection (7).
  • Marginal note:Imputed tax on gaming expenses

    (7) The imputed tax payable by a provincial gaming authority on gaming expenses for a particular reporting period of the authority is the amount determined by the formula

    A + B + C + D + E

    where

    A
    is the amount determined by the formula

    A1 - A2

    where

    A1
    is the total of all amounts each of which is
    • (a) an amount of tax (other than tax that is deemed under subsection 206(2) or (3) of the Act to have been paid or that is calculated on a reimbursement) that became payable during the particular period, or that was paid during the particular period without having become payable, by the authority in respect of property or a service (other than a casino operating service or a prize in kind) that was acquired or imported by the authority, (a.1) twice the amount determined under section 13 for the particular period as the imputed tax payable by the authority in respect of expenses incurred by the Interprovincial Lottery Corporation,

    • (b) an amount of tax that the authority is deemed to have collected during the period under subsection 206(5) of the Act,

    • (b.1) an amount (other than an amount described in subparagraph (d)(ii)) of tax in respect of a supply deemed under subsection 143(1) of the Act to have been made outside Canada (other than a supply described in subsection 178.8(2) of the Act) that would have become payable by the authority during the particular period if the supply had been made in Canada by a registrant,

    • (c) the total of all amounts each of which is determined by the formula

      A3 × A4

      where

      A3
      is a reimbursement (other than a non-gaming reimbursement) that became payable during the particular period, or that was paid during the particular period without having become payable, by the authority to a distributor of the authority, other than
      • (i) a non-taxable reimbursement,

      • (ii) a reimbursement of the cost to the distributor of a right to play or participate in a game of chance given away free of charge by the distributor,

      • (iii) a reimbursement of salaries, wages or other remuneration paid or payable by the distributor to an employee of the distributor to the extent that that remuneration is a cost to the distributor of supplying a casino operating service to the authority, or

      • (iv) a reimbursement of an expense incurred by the distributor in the course of supplying a service referred to in subparagraph 188.1(4)(a)(iii) of the Act, and

      A4
      is
      • (i) if the reimbursement is in respect of a supply made by the distributor to the authority in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and

      • (ii) in any other case, the rate set out in subsection 165(1) of the Act, and

    • (d) twice the value of all amounts each of which is

      • (i) an amount that, but for subsection 156(2) or 167(1.1) of the Act, would have become payable by the authority during the particular period as tax under Division II of Part IX of the Act in respect of a supply made to the authority,

      • (ii) an amount that would have become payable by the authority during the particular period as tax under Division IV or IV.1 of Part IX of the Act if the authority’s gaming activities were not commercial activities,

      • (iii) the amount by which

        • (A) the total of all amounts each of which is tax that would have become payable by the authority during the particular period under Division II of Part IX of the Act in respect of a supply (other than a supply referred to in subparagraph (iv) or (v)) made to the authority that is a taxable supply of property or a service for consideration less than fair market value, or an exempt supply by way of lease of tangible personal property or real property, if the supply had been a taxable supply made for consideration equal to fair market value,

        exceeds

        • (B) the total amount of tax under that Division that became payable by the authority during the particular period in respect of supplies included in clause (A),

      • (iv) the amount of tax that would have become payable by the authority during the particular period under Division II of Part IX of the Act in respect of an exempt supply of real property made to the authority by way of lease by a wholly-owned subsidiary of the authority that had acquired the property for consideration equal to fair market value if the supply had been a taxable supply and if the amount of consideration for the supply that had become due in the period or was paid in the period without having become due were equal to the greater of the period cost of the supply for the period and the total of any amounts of consideration for the supply, as otherwise determined for the purposes of Part IX of the Act, that became due in the period or were paid in the period without having become due, or

      • (v) the amount, if any, by which

        • (A) the amount of tax that would have become payable by the authority during the particular period under Division II of Part IX of the Act in respect of a taxable supply of property made to the authority by way of lease by a wholly-owned subsidiary of the authority that had acquired the property for consideration equal to fair market value if consideration for the supply, equal to the period cost of the supply for the period, became due in the period and if that were the only consideration for the supply that became due in the period or was paid in the period without having become due,

        exceeds

        • (B) the total amount of tax under that Division that became payable by the authority during the particular period in respect of the supply, and

    A2
    is the total of all amounts each of which is determined by the formula

    A5 × A6

    where

    A5
    is
    • (a) an input tax credit of the authority for the particular period that is in respect of an amount included under paragraph (a), or

    • (b) twice the value of an imputed input tax credit of the authority for the particular period that is in respect of an amount included under any of subparagraphs (d)(i) to (iii), of the description of A1 in determining the total for A1 for the particular period, and

    A6
    is the extent (expressed as a percentage) to which the authority is, subject to section 9, entitled to include the input tax credit or imputed input tax credit, as the case may be, in determining this total for the particular period;
    B
    is the total of all amounts each of which is an amount of tax that would have become payable by the authority during the particular period in respect of consideration for a supply of a casino operating service made to the authority by a distributor of the authority if subsection 188.1(4) of the Act did not apply to the supply and the consideration for the supply were equal to the amount determined by the formula

    B1 - (B2 + B3)

    where

    B1
    is the consideration for the casino operating service determined under Part IX of the Act without reference to that subsection,
    B2
    is the total of all amounts each of which is determined by the formula

    B4 × B5

    where

    B4
    is a particular amount of salaries, wages or other remuneration (other than an amount described in the description of B6) paid or payable by the distributor, or by a person (in this description and in the description of B6 referred to as the “distributor’s subsidiary”) that is a wholly-owned subsidiary of the distributor, to an employee of the distributor or of the distributor’s subsidiary, and
    B5
    is the extent (expressed as a percentage) to which the particular amount is
    • (i) a cost to the distributor of supplying the casino operating service to the authority, or

    • (ii) a cost to the authority of the management, administration and carrying on of the day-to-day operations of the authority’s gaming activities that are connected with a casino of the authority, and

    B3
    is the total of all amounts each of which is determined by the formula

    B6 × B7

    where

    B6
    is a particular amount that is paid by, or is in respect of a supply of property or a service made by, the distributor or the distributor’s subsidiary to an employee of the distributor or of the distributor’s subsidiary or to a person related to such an employee, and that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for a taxation year of the employee, and
    B7
    is the extent (expressed as a percentage) to which the particular amount is
    • (i) a cost to the distributor of supplying the casino operating service to the authority, or

    • (ii) a cost to the authority of the management, administration and carrying on of the day-to-day operations of the authority’s gaming activities that are connected with a casino of the authority;

    C
    is the total of all amounts each of which is an amount determined by the formula

    C1 × C2

    where

    C1
    is the total of all amounts each of which is an amount that, in the absence of subsection 188.1(4) of the Act, would be consideration (other than charitable proceeds from Superstar Bingo) for a supply (other than a supply of a casino operating service) by a distributor of the authority to the authority or would be a reimbursement paid or payable by the authority to a distributor of the authority (other than a reimbursement that is a non-gaming reimbursement, a non-taxable reimbursement, a reimbursement of the cost to the distributor of a right to play or participate in a game of chance given away free of charge by the distributor or a reimbursement of salaries, wages or other remuneration paid or payable by the distributor to an employee of the distributor to the extent that that remuneration is a cost to the distributor of supplying a casino operating service to the authority), where
    • (a) if the amount represents a commission in respect of the sale, by the distributor on behalf of the authority, of a right to play or participate in a game of chance (other than an instant win game), it became ascertainable in the particular period whether a prize or winnings were payable in respect of the right, and

    • (b) in any other case, the amount became due to the distributor during the particular period or was paid to the distributor during the particular period without having become due, and

    C2
    is
    • (a) if the particular supply by the distributor to the authority relates to the making of supplies of rights of the authority in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and

    • (b) in any other case, the rate set out in subsection 165(1) of the Act;

    D
    is the total of all amounts each of which is a positive or negative amount determined, in respect of each distributor of the authority, by the formula

    (D1 - D2) × D3

    where

    D1
    is the amount by which
    • (a) the total face value of all rights of the authority evidenced by tickets, cards or other printed devices that were acquired by the distributor from the authority for the purpose of supply on the distributor’s own behalf otherwise than as prizes in kind and

      • (i) in the case of instant win tickets, the consideration for the supplies of which by the authority to the distributor became due during the particular period or was paid during the particular period without having become due, or

      • (ii) in any other case, in respect of which it became ascertainable in the particular period whether amounts were payable as prizes or winnings

    exceeds

    • (b) the total amount paid or payable for the supplies referred to in paragraph (a) made by the authority to the distributor,

    D2
    is the amount by which
    • (a) the total face value of all rights of the authority evidenced by tickets, cards or other printed devices that were supplied to the distributor by the authority, the face value of which is included in determining the value for D1 for the particular period or a preceding reporting period of the authority and that are returned by the distributor to the authority during the particular period

    exceeds

    • (b) the total amount paid or payable for the supplies referred to in paragraph (a) made by the authority to the distributor, and

    D3
    is
    • (a) if the distributor acquired the devices for the purpose of supplying them in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and

    • (b) in any other case, the rate set out in subsection 165(1) of the Act; and

    E
    is
    • (a) if the particular period includes the last day of February in a calendar year, the total of all amounts, if any, each of which is determined by the formula

      E1 × (100% - E2) × E3

      where

      E1
      is an amount (in this paragraph referred to as the “benefit amount”)
      • (i) that

        • (A) was paid by the authority, or

        • (B) is in respect of a supply of property or a service (other than property or a service in respect of which the authority was not entitled to claim an input tax credit because of subsection 170(1) of the Act) made by the authority to an individual who was an employee of the authority during the previous calendar year or to a person related to the individual, and

      • (ii) that the individual is required under section 6 of the Income Tax Act to include in computing the individual’s income for that previous calendar year,

      E2
      is the extent (expressed as a percentage) to which the benefit amount is a cost to the authority of making non-gaming supplies other than the supply referred to in clause (i)(B) of the description of E1, and
      E3
      is
      • (i) where the benefit amount is required under paragraph 6(1)(k) or (l) of the Income Tax Act to be included in computing the individual’s income,

      • (ii) in any other case, the amount determined by the formula

        E4/E5

        where

        E4
        is
        • (A) if the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act and the last establishment at which the individual ordinarily worked or to which the individual ordinarily reported in the previous calendar year in relation to the individual’s office or employment with the authority is located in a participating province, the total of 4% and the tax rate for the participating province, and

        • (A.1) [Repealed, SOR/2012-191, s. 3]

        • (B) in any other case, 4%, and

        E5
        is the total of 100% and the percentage determined for E4, and
    • (b) in any other case, zero.

  • SOR/98-440, s. 6
  • SOR/2011-56, s. 12
  • SOR/2012-191, s. 3
  • SOR/2013-44, s. 1
  • SOR/2016-212, s. 3
 
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