Streamlined Accounting (GST/HST) Regulations

21.3 (1) If an election by a registrant to determine the net tax of the registrant in accordance with this Part is in effect during a reporting period of the registrant, the net tax of the registrant for the reporting period is, subject to this Part, the positive or negative amount of net tax for the reporting period determined in accordance with

• (a) if the registrant has filed an election to determine the net tax of the registrant in accordance with Part IV that is in effect during the reporting period, Part IV;

• (b) if the registrant has filed an election to determine the net tax of the registrant in accordance with Part V that is in effect during the reporting period, Part V; and

• (c) in any other case, subsection 225(1) of the Act.

(2) If personal property or a service is supplied in Canada to a registrant by another person, or tangible personal property is supplied outside Canada to a registrant by another person and imported by the registrant, and the registrant is entitled to claim an input tax credit in respect of the property or service for any reporting period of the registrant, for the purposes of determining

• (a) an input tax credit of the registrant in respect of the property or service for a particular reporting period of the registrant, and

• (b) an amount that is required by subsection 235(1) of the Act to be added in determining the net tax of the registrant for any reporting period,

for the purposes of this Part, the amount of tax under Division II or III, as the case may be, that became payable, or was paid without having become payable, by the registrant during the particular reporting period in respect of the supply or importation of the property or service is deemed to be equal to the amount determined by the formula

(3) Subsection (2) does not apply to a passenger vehicle or aircraft acquired or imported by a registrant who is an individual or a partnership for use as capital property of the registrant otherwise than exclusively in commercial activities of the registrant.

(4) For the purposes of this Part, if paragraph 13(7)(g) or (h) of the Income Tax Act deems an amount to be the capital cost to a registrant of a passenger vehicle for the purposes of section 13 of that Act, the amount, if any, by which

• (a) the total of all amounts each of which is an amount of tax that is deemed by subsection (2) to have become payable, or to have been paid without having become payable, by the registrant in respect of the acquisition or importation of the vehicle or the acquisition or importation of an improvement to the vehicle,

exceeds

• (b) the amount determined by the formula

  A × B

  where

  A

  is the amount determined by the formula

  C / D

  where

  C

  is

  • (i) if tax under subsection 165(2) or section 212.1 of the Act was payable in respect of the acquisition or importation, the total of the rate set out in subsection 165(1) of the Act and the tax rate of the participating province that applied in respect of the acquisition or importation, and

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

  D

  is the total of 100% and the percentage determined for C, and

  B

  is the amount deemed by paragraph 13(7)(g) or (h) of the Income Tax Act to be the capital cost to the registrant of the vehicle for the purposes of section 13 of that Act,

shall not be included in determining an input tax credit of the registrant for any reporting period of the registrant.

(5) For the purpose of determining, in accordance with this Part, an input tax credit of a partnership, an employer, a charity or a public institution that pays an amount as a reimbursement in respect of property or a service acquired or imported by a member of the partnership, an employee of the employer or a volunteer who has given services to the charity or public institution and in respect of which the member, employee or volunteer was liable to pay tax under Division II or III, the amount of that tax is deemed, for the purpose of applying section 175 of the Act, to be equal to the amount that would be determined under subsection (2) if that subsection applied to the acquisition or importation by the member, employee or volunteer.