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

Regulations are current to 2020-12-28 and last amended on 2019-03-04. Previous Versions

PART 3Net Tax of Prescribed Registrants (continued)

Interprovincial Lottery Corporation and its Members

Marginal note:Net tax of Interprovincial Lottery Corporation

 The net tax for a reporting period of the Interprovincial Lottery Corporation is the amount that would be its net tax for the period determined under section 225 of the Act if the amount collectible by it as or on account of tax under Division II of Part IX of the Act in respect of each supply made by it to a provincial gaming authority were the amount determined in accordance with section 11.

  • SOR/98-440, s. 6

Marginal note:Presumption concerning tax on supply

 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of the Interprovincial Lottery Corporation, if the Corporation makes a supply of property or a service to a provincial gaming authority, the tax payable in respect of the supply is deemed to be the tax that would be payable in respect of the supply if the value of the consideration for the supply were the amount determined by the formula

A - B

where

A
is the value of the consideration for the supply determined without reference to this section; and
B
is the total of all amounts each of which is determined by the formula

B1 × B2

where

B1
is a particular amount that is
  • (a) salary, wages or other remuneration paid or payable to an employee of the Corporation, other than an amount that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for the purposes of that Act,

  • (b) consideration paid or payable by the Corporation for an exempt supply of a service or a zero-rated supply, or

  • (c) a tax, duty or fee prescribed for the purposes of section 154 of the Act, and

B2
is the extent (expressed as a percentage) to which the particular amount is a cost to the Corporation of supplying the property or service.
  •  SOR/98-440, s. 6
  • SOR/2011-56, s. 14(E)

Marginal note:Presumption concerning rights and distributions

 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of the Interprovincial Lottery Corporation and of any provincial gaming authority, where any proceeds from a game of chance conducted by the Corporation are distributed to one or more provincial gaming authorities, the following rules apply:

  • (a) the particular rights to play or participate in that game to which each authority’s share of the proceeds is attributable are deemed to be rights of that authority and not of the Corporation; and

  • (b) in relation to the particular rights,

    • (i) the game is deemed to be conducted by,

    • (ii) the related bets are deemed to be made with and accepted by, and

    • (iii) the liability for the payment of any related prizes or winnings is deemed to be that of,

    that authority and not the Corporation.

  • SOR/98-440, s. 6

Marginal note:Expenses incurred by Interprovincial Lottery Corporation

 Where the Interprovincial Lottery Corporation incurs expenses in conducting a game of chance and those expenses are not charged to a provincial gaming authority as consideration for a taxable supply but are charged at any time to the authority otherwise than as consideration for a supply or are taken into account in determining the amount of proceeds from the game that are paid, at any time, to the authority, for the purpose of paragraph (a.1) of the description of A1 in subsection 7(7), the imputed tax payable by the authority in respect of those expenses for the reporting period of the authority that includes that time is the amount determined by the formula

A × (B - C)

where

A
is the rate set out in subsection 165(1) of the Act,
B
is the amount of those expenses, and
C
is the total of all amounts each of which is determined by the formula

C1 × C2

where

C1
is a particular amount that is
  • (a) salary, wages or other remuneration paid or payable to an employee of the Corporation, other than an amount that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for the purposes of that Act,

  • (b) consideration paid or payable by the Corporation for an exempt supply of a service or a zero-rated supply, or

  • (c) a tax, duty or fee prescribed for the purposes of section 154 of the Act, and

C2
is the extent (expressed as a percentage) to which the particular amount is a cost to the Corporation of conducting the game and is included in the expenses referred to in the description of B.
  •  SOR/98-440, s. 6
  • SOR/2011-56, s. 15

Marginal note:Presumption concerning status as financial institution

 For all purposes relevant to the determination of the net tax of the Interprovincial Lottery Corporation, the Corporation is deemed not to be a financial institution.

  • SOR/98-440, s. 6

Provincial Gaming Authority as Distributor

Marginal note:Special rule

 If a provincial gaming authority, other than the Interprovincial Lottery Corporation, (in this section referred to as the “reporting authority”) is a distributor of another provincial gaming authority in relation to a game of chance conducted by or on behalf of the other authority,

  • (a) in applying subsection 7(7) and sections 8 and 9 of these Regulations and Part IX of the Act in determining the imputed tax payable on gaming expenses and the input tax credits of the reporting authority and of the other authority, any amount paid or payable by the reporting authority on behalf of the other authority in respect of the acquisition or importation, or bringing into a participating province, of property or a service for consumption, use or supply in relation to the conduct of the game is to be taken into account as if

    • (i) the game were conducted by the reporting authority as part of the gaming activities of the reporting authority and not of the other authority,

    • (ii) the property or service were acquired or imported, or brought into the participating province, and the amount were paid or payable, by the reporting authority on its own account and not by the other authority,

    • (iii) the rights to play or participate in the game were rights of the reporting authority and not of the other authority, and

    • (iv) persons, other than the reporting authority, acting as distributors of the other authority in relation to the game were distributors of the reporting authority, and not of the other authority, in relation to the game;

  • (b) no amount that would, but for subsection 188.1(4) of the Act, be consideration for a supply by the reporting authority to the other authority in relation to the game is to be included in the total for C1 in subsection 7(7); and

  • (c) no amount of a reimbursement paid or payable by the other authority to the reporting authority in respect of an expense incurred or to be incurred by the reporting authority that is attributable to the game is to be included in the amount determined for A3 or C1 in subsection 7(7).

  • SOR/2011-56, s. 16

Wholly-owned Subsidiary Holding Real Property

Marginal note:Net tax of wholly-owned subsidiary holding real property

 The net tax for a reporting period of a corporation that is a wholly-owned subsidiary of a provincial gaming authority and that supplies to the authority, by way of lease, licence or similar arrangement, real property acquired by the authority for use as the authority’s head office is the amount that would be the corporation’s net tax for the period determined under section 225 of the Act if the amount collectible by it as or on account of tax under Division II of Part IX of the Act in respect of each such supply of that real property to the authority were the amount determined in accordance with section 16.

  • SOR/98-440, s. 6

Marginal note:Presumption concerning tax on supply of real property

 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of a wholly-owned subsidiary of a provincial gaming authority, where the subsidiary makes a supply to the authority (other than a supply to which section 156 of the Act applies), by way of lease, license or similar arrangement, of real property that the authority acquires for use as the authority’s head office, the tax payable in respect of the supply is deemed to be the tax that would be payable in respect of the supply if the value of the consideration for the supply were the amount determined by the formula

A - B

where

A
is the value of the consideration for the supply determined without reference to this section; and
B
is the total of all amounts each of which is determined by the formula

B1 × B2 × B3

where

B1
is a particular amount that is property tax payable by the subsidiary in respect of the property or consideration paid or payable by the subsidiary for a zero-rated supply, or an exempt supply of personal property or a service, other than a supply that would be deemed under subsection 188.1(4) of the Act not to be a supply if it were made to the authority instead of the subsidiary,
B2
is the extent (expressed as a percentage) to which the particular amount is a cost to the subsidiary of making the supply of the real property to the authority, and
B3
is the extent (expressed as a percentage) to which the authority acquires the real property for use as the authority’s head office.
  •  SOR/98-440, s. 6
 
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