C-40 1 39 55-56 Elizabeth II 2006-2007

An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts

Sales Tax Amendments Act, 2006

Sales Tax, 2006 2007 6 22 18 2007 90392

SUMMARY

Part 1 of this enactment mainly implements proposed measures relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST).

Part 2 contains measures relating to the Excise Act, 2001 and other Acts with respect to the taxation of tobacco, spirits and wine. Finally,

Part 3 contains measures relating to the Air Travellers Security Charge.

The GST/HST measures, contained in

Part 1 of this enactment, are principally aimed at improving the operation and fairness of the GST/HST in the affected areas and ensuring that the legislation accords with the policy intent. In some cases, adjustments have been made to the legislation as originally proposed in response to representations from the tax and business communities.

The principal GST/HST measures are as follows:

(1) Health: confirms the GST/HST exemption for speech-language pathology services; exempts health-related services rendered in the practise of the profession of social work; zero-rates sales and importations of a blood substitute known as plasma expander; restores the zero-rated status of a group of drugs, collectively known as Benzodiazepines; broadens the specially equipped vehicle GST/HST rebate so that this rebate applies to motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities.

(2) Charities: ensures that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property.

(3) Business Arrangements: provides transitional GST/HST relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch; removes technical impediments that hinder the use of existing group relief provisions under the GST/HST; simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST/HST base; permits an agent to claim a GST/HST deduction for bad debts, and to claim adjustments or refunds of tax, in respect of sales made on behalf of a principal where the agent collects and reports tax; extends the existing agent rules under the GST/HST legislation to persons acting only as billing agents for vendors; better accommodates special import arrangements between businesses in certain situations where goods are supplied outside Canada to a Canadian customer; ensures that GST/HST group relief rules cannot be used to exempt from GST/HST otherwise taxable clearing services that are provided by a group member to a closely related financial institution who will then re-supply those services on an exempt basis to a third-party purchaser outside the group; clarifies the treatment of the right to use certain types of amusement or entertainment devices, such as the playing of a game, when it is provided through the operation of a mechanical coin-operated device that can accept only a single coin of twenty-five cents or less as the total consideration for the supply; confirms the policy intent and Canada Revenue Agency’s existing practice that no GST/HST or provincial sales taxes on a passenger vehicle are included in calculating the maximum allowable value for input tax credit purposes.

(4) Governments: ensures that a small supplier division of a municipality is treated in the same manner as a municipality that is a small supplier; exempts a supply of a right to file or retrieve a document or information stored in an electronic official registry.

(5) HST-related Rules: as announced by the Government of Nova Scotia, limits the availability of the current Nova Scotia HST New Housing Rebate to first-time homebuyers and reduces the maximum rebate available to $1,500; includes in the Act the draft Specified Motor Vehicle (GST/HST) Regulations , which prescribe the value of a specified motor vehicle for the purposes of calculating the 8% provincial component of the HST in circumstances where the vehicle is brought into a participating province and prescribe the manner in which that tax is required to be paid.

(6) Administration: adds a discretionary power for the Minister of National Revenue to accept late-filed applications for the GST New Housing Rebate and the Nova Scotia HST New Housing Rebate for owner-built homes, where exceptional circumstances have prevented an applicant from meeting the normal filing deadline; adds a discretionary power for the Minister of National Revenue to accept late-filed elections between closely related financial institutions for adjustments that they are required to make for the provincial component of the HST; permits the Minister of National Revenue to exchange GST/HST information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act .

The measures contained in

Part 2 of this enactment amend the Excise Act, 2001 to implement minor refinements that will improve the operation of the Act and more accurately reflect current industry and administrative practices. They also implement related and consequential amendments to the Access to Information Act , the Customs Act , the Customs Tariff and the Excise Tax Act .

The principal measures related to the Excise Act, 2001 are as follows:

(1) Tobacco: extends the requirement to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export, consistent with the Framework Convention on Tobacco Control, an international treaty on tobacco control; clarifies that cigarettes, tobacco sticks, fine-cut tobacco or cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty-free market.

(2) Alcohol: authorizes private laboratories, provincial liquor boards and vintners to possess a still or similar equipment and produce spirits for the purpose of analysing substances containing ethyl alcohol without holding a spirits licence; defers the payment of duty by small vintners selling wine on consignment in retail stores operated by an association of vintners until the wine is sold.

(3) Administration: permits the Minister of National Revenue to exchange excise duty information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act .

The measures pertaining to the Air Travellers Security Charge (ATSC), contained in

Part 3 of this enactment, include previously announced relief provisions, as well as technical changes to the Air Travellers Security Charge Act .

The principal measures related to the ATSC are as follows:

(1) Relief: relieves, in particular circumstances, the ATSC in respect of air travel sold by resellers or donated by air carriers.

(2) Administration: provides authority for the Governor in Council to add, delete or vary by regulation the

schedule of listed airports.

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

This Act may be cited as the Sales Tax Amendments Act, 2006 .

PART 1

R.S., c. E-15

AMENDMENTS TO THE EXCISE TAX ACT

Amendments in Respect of the Goods and Services Tax/Harmonized Sales Tax

1990, c. 45, s. 12(1)

(1) The definition closely related group in subsection 123(1) of the Excise Tax Act is replaced by the following:

closely related group

groupe étroitement lié

closely related group means a group of corporations, each member of which is a registrant resident in Canada and is closely related, within the meaning assigned by

section 128, to each other member of the group, and for the purposes of this definition,

(

a) a non-resident insurer that has a permanent establishment in Canada is deemed to be resident in Canada, and

(

b) credit unions and members of a mutual insurance group are deemed to be registrants;

1990, c. 45, s. 12(1)

(2) The definition logement en copropriété in subsection 123(1) of the French version of the Act is replaced by the following:

logement en copropriété

residential condominium unit

logement en copropriété Immeuble d’habitation qui est, ou est destiné à être, un espace délimité dans un bâtiment et désigné ou décrit comme étant une unité distincte sur le plan ou la description enregistrés afférents, ou sur un plan ou une description analogues enregistrés en conformité avec les lois d’une province, ainsi que tous droits et intérêts fonciers afférents à la propriété de l’unité.

1997, c. 10, s. 150(6)

(3) Subparagraph (iii) of the description of A in paragraph (

a) of the definition basic tax content in subsection 123(1) of the Act is replaced by the following:

(iii)

the tax under

section 165 that would have been payable by the person, in respect of the last acquisition of the property by the person or in respect of improvements to the property acquired by the person after the property was last acquired or imported by the person, in the absence of subsection 153(4),

section 167,

section 167.11 in the case of property acquired under an agreement for a qualifying supply (as defined in that section) that was not, immediately before that acquisition, capital property of the supplier or the fact that the property or improvements were acquired by the person for consumption, use or supply exclusively in commercial activities,

1997, c. 10, s. 150(6)

(4) Subparagraph (iv) of the description of J in paragraph (

b) of the definition basic tax content in subsection 123(1) of the Act is replaced by the following:

(iv)

the tax under

section 165 that would have been payable by the person, in respect of improvements to the property acquired by the person after the property was brought into the participating province, in the absence of subsection 153(4),

section 167,

section 167.11 in the case of property acquired under an agreement for a qualifying supply (as defined in that section) that was not, immediately before that acquisition, capital property of the supplier or the fact that the improvements were acquired by the person for consumption, use or supply exclusively in commercial activities, or

1990, c. 45, s. 12(1)

(5) The portion of the definition qualifying subsidiary in subsection 123(1) of the Act before paragraph (

b) is replaced by the following:

qualifying subsidiary

filiale déterminée

qualifying subsidiary of a particular corporation means another corporation not less than 90% of the value and number of the issued and outstanding shares of the capital stock of which, having full voting rights under all circumstances, are owned by the particular corporation, and includes

(

a) a corporation that is a qualifying subsidiary of a qualifying subsidiary of the particular corporation,

(6) Subsection 123(1) of the Act is amended by adding the following in alphabetical order:

listed international agreement

accord international désigné

listed international agreement means the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time;

Superintendent

surintendant

Superintendent means the Superintendent of Financial Institutions appointed pursuant to the Office of the Superintendent of Financial Institutions Act ;

(7) Subsections (1) and (5) are deemed to have come into force on November 17, 2005.

(8) Subsection (2) is deemed to have come into force on January 1, 2000.

(9) Subsections (3) and (4) and the definition Superintendant in subsection 123(1) of the Act, as enacted by subsection (6), are deemed to have come into force on June 28, 1999.

1990, c. 45, s. 12(1)

(1) The portion of subsection 128(1) of the Act before subparagraph ( a )(

i) is replaced by the following:

Closely related corporation

(1) For the purposes of this Part, a particular corporation and another corporation are closely related to each other at any time if at that time

(

a) not less than 90% of the value and number of the issued and outstanding shares of the capital stock of the other corporation, having full voting rights under all circumstances, are owned by

1990, c. 45, s. 12(1)

(2) The portion of subsection 128(1) of the Act after paragraph (

b) is repealed.

1990, c. 45, s. 12(1); 1993, c. 27, s. 12(2)

(3) Subsections 128(2) and (3) of the Act are replaced by the following:

Corporations closely related to the same corporation

(2) If under subsection (1) two corporations are closely related to the same corporation, they are closely related to each other for the purposes of this Part.

Investment funds

(3) For the purposes of this section, an investment fund that is a member of a mutual insurance group is deemed to be a corporation.

(4) Subsections (1) to (3) are deemed to have come into force on November 17, 2005.

1993, c. 27, s. 13(1)

(1) Subsection 129.1(1) of the Act is replaced by the following:

Supply by small supplier division

129.1

(1) If a public service body makes a taxable supply through a branch or division of the body and the consideration or a part of the consideration for the supply becomes due to the body at a time when the branch or division is a small supplier division or is paid to the body at such a time without having become due, the consideration or the part of the consideration, as the case may be, shall not be included in calculating the tax payable in respect of the supply or in determining a threshold amount of the body under

section 249 and that supply is, for the purposes of this Part, deemed not to have been made by a registrant, except if the supply is

(

a) a supply by way of sale of real property;

(

b) a supply by way of sale of personal property by a municipality that is capital property of the municipality; or

(

c) a supply by way of sale of designated municipal property of a person designated to be a municipality for the purposes of

section 259 that is capital property of the person.

(2) Subsection (1) applies to any supply for which consideration becomes due after November 27, 2006 or for which consideration is paid after that day without having become due, but does not apply to any supply made under an agreement in writing entered into before November 28, 2006.

1997, c. 10, s. 12(1)

(1) Subsection 150(2) of the Act is replaced by the following:

Exceptions

(2) Subsection (1) does not apply to

(

a) property held or services rendered by a member of a closely related group as a participant in a joint venture with another person while an election under

section 273 made jointly by the member and the other person is in effect;

(

b) an imported taxable supply, as defined in

section 217; or

(

c) a supply of services in relation to the clearing or settlement of cheques and other payment items under the national payments system of the Canadian Payments Association if the recipient (in this paragraph referred to as the “related purchaser”) is acquiring all or part of those services for the purpose of making a supply of exempt services to

(

i) an unrelated party, or

(ii)

a supplier that is a member of a closely related group of which the related purchaser is a member and that acquires all or part of the exempt services for the purpose of making a supply of exempt services to an unrelated party or to a supplier described by this subparagraph.

Definitions

(2.1) The following

definitions apply in subsection (2).

exempt services

services exonérés

exempt services means services prescribed by

section 3 of the Financial Services (GST/HST) Regulations .

unrelated party

tiers non lié

unrelated party , in respect of a supply of services, means a person that is not a member of a closely related group of which the supplier is a member and that is acquiring the services for the purpose of making a supply of services in relation to the clearing or settlement of cheques and other payment items under the national payments system of the Canadian Payments Association.

(2) Subject to subsection (3), subsection (1) is deemed to have come into force on September 14, 2001.

(3) Paragraph 150(2)(

c) of the Act, as enacted by subsection (1), does not apply to

(

a) services provided before September 14, 2001; or

(

b) any supply of services to a related purchaser (within the meaning of that paragraph) if the agreement for the supply of all or part of those services to the unrelated party (as defined in subsection 150(2.1) of the Act, as enacted by subsection (1)) was entered into before September 14, 2001.

(4) For the purposes of

Part IX of the Act, if the supply, referred to in paragraph 150(2)(

c) of the Act, as enacted by subsection (1), made to the related purchaser (within the meaning of that paragraph) includes the provision of services during a period beginning before September 14, 2001 and ending on or after that day,

(

a) the provision of the services (in this subsection referred to as the “excluded services”) that are provided during the part of the period that is before September 14, 2001 and the provision of the services (in this subsection referred to as the “affected services”) that are provided during the remainder of the period are deemed to be a separate supply;

(

b) the consideration for the supply of the excluded services is deemed to be equal to the portion of the total consideration for the services provided in the period that can reasonably be attributed to the excluded services; and

(

c) the consideration for the supply of the affected services is deemed to be equal to the portion of that total consideration that can reasonably be attributed to the affected services.

2000, c. 30, s. 25(1)

(1) The

definitions qualifying group and specified member in subsection 156(1) of the Act are replaced by the following:

qualifying group

groupe admissible

qualifying group means

(

a) a group of corporations, each member of which is closely related, within the meaning assigned by

section 128, to each other member of the group; or

(

b) a group of Canadian partnerships, or of Canadian partnerships and corporations, each member of which is closely related, within the meaning of this section, to each other member of the group.

specified member

membre déterminé

specified member of a qualifying group means

(

a) a qualifying member of the group; or

(

b) a temporary member of the group during the course of the reorganization referred to in paragraph (

f) of the definition temporary member .

(2) Subsection 156(1) of the Act is amended by adding the following in alphabetical order:

distribution

attribution

distribution has the meaning assigned by subsection 55(1) of the Income Tax Act .

qualifying member

membre admissible

qualifying member of a qualifying group means a registrant that is a corporation resident in Canada or a Canadian partnership and that meets the following conditions:

(

a) the registrant is a member of the group;

(

b) the registrant is not a party to an election under subsection 150(1); and

(

c) the registrant last manufactured, produced, acquired or imported all or substantially all of its property (other than financial instruments) for consumption, use or supply exclusively in the course of commercial activities of the registrant or, if the registrant has no property (other than financial instruments), all or substantially all of the supplies made by the registrant are taxable supplies.

temporary member

membre temporaire

temporary member of a qualifying group means a corporation

(

a) that is a registrant;

(

b) that is resident in Canada;

(

c) that is a member of the qualifying group;

(

d) that is not a qualifying member of the qualifying group;

(

e) that is not a party to an election under subsection 150(1);

(

f) that receives a supply of property made in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)( b )(

i) of the Income Tax Act from the distributing corporation referred to in that subparagraph that is a qualifying member of the qualifying group;

(

g) that, before receiving the supply, does not carry on any business or have any property (other than financial instruments); and

(

h) the shares of which are transferred on the distribution.

2000, c. 30, s. 25(1)

(3) The portion of subsection 156(1.1) of the Act before subparagraph ( a )(

i) is replaced by the following:

Closely related persons

(1.1) For the purposes of this section, a particular Canadian partnership and another person that is a Canadian partnership or a corporation are closely related to each other at any time if, at that time,

(

a) in the case where the other person is a Canadian partnership,

2000, c. 30, s. 25(1)

(4) Clause 156(1.1)( a )(i)(

B) of the Act is replaced by the following:

(

B) a corporation, or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member, or

2000, c. 30, s. 25(1)

(5) Clause 156(1.1)( a )(ii)(

A) of the Act is replaced by the following:

(

A) owns at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation that is a member of a qualifying group of which the other person is a member, or

2000, c. 30, s. 25(1)

(6) The portion of paragraph 156(1.1)(

b) of the English version of the Act before subparagraph (

i) is replaced by the following:

(

b) in the case where the other person is a corporation,

2000, c. 30, s. 25(1)

(7) Clause 156(1.1)( b )(i)(

B) of the Act is replaced by the following:

(

B) a corporation, or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member, or

2000, c. 30, s. 25(1)

(8) The portion of subparagraph 156(1.1)( b )(ii) of the Act before clause (

A) is replaced by the following:

(ii)

not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation are owned by

2000, c. 30, s. 25(1)

(9) Clause 156(1.1)( b )(iii)(

B) of the Act is replaced by the following:

(

B) a corporation, or a Canadian partnership, that is a member of a qualifying group of which the other person is a member, or

2000, c. 30, s. 25(1)

(10) Subsection 156(1.2) of the Act is replaced by the following:

Persons closely related to the same person

(1.2) If, under subsection (1.1), two persons are closely related to the same corporation or partnership, or would be so related if each member of that partnership were resident in Canada, the two persons are closely related to each other for the purposes of this section.

2000, c. 30, s. 25(1)

(11) Subsection 156(2) of the Act is replaced by the following:

Election for nil consideration

(2) For the purposes of this Part, if a specified member of a qualifying group elects jointly with another specified member of the group, every taxable supply made between them at a time when the election is in effect is deemed to have been made for no consideration.

Non-application

(2.1) Subsection (2) does not apply to

(

a) a supply by way of sale of real property;

(

b) a supply of property, or of a service, that is not acquired by the recipient for consumption, use or supply exclusively in the course of commercial activities of the recipient; or

(

c) a supply that is not a supply of property made in contemplation of a distribution made in the course of a reorganization described in subparagraph 55(3)( b )(

i) of the Income Tax Act, if the recipient of the supply is a temporary member.

(12) Subsections (1) to (10) are deemed to have come into force on November 17, 2005.

(13) Subsection (11) applies to any supply made after November 16, 2005.

(1) Section 165 of the Act, as it read immediately before April 1, 1997, is amended by adding the following after subsection (3.1):

Supply of right to use device

(3.2) For the purpose of subsection (3.1), a supply of a right to use a device described in that subsection is deemed to be a supply of a service rendered through the operation of the device.

(2) Subsection 165(3.2) of the Act, as enacted by subsection (1), is repealed.

(3) Subsection 165(3.2) of the Act, as enacted by subsection (1), applies to supplies made after April 23, 1996.

(4) Subsection (2) is deemed to have come into force on April 1, 1997.

(1) Section 165.1 of the Act is amended by adding the following after subsection (2):

Supply of right to use device

(3) For the purpose of subsection (2), a supply of a right to use a device described in that subsection is deemed to be a supply of a service rendered through the operation of the device.

(2) Subsection (1) is deemed to have come into force on April 1, 1997.

(1) The Act is amended by adding the following after

section 167.1:

Definitions

167.11

(1) The following

definitions apply in this section.

authorized foreign bank

banque étrangère autorisée

authorized foreign bank has the meaning assigned by

section 2 of the Bank Act .

foreign bank branch

succursale de banque étrangère

foreign bank branch means a branch as defined in paragraph (

b) of the definition branch in

section 2 of the Bank Act .

qualifying supply

fourniture admissible

qualifying supply means a supply of property or a service that is made in Canada under an agreement for the supply (other than an agreement between a supplier that is a registrant and a recipient that is not a registrant at the time the agreement is entered into) and

(

a) that is made by a corporation resident in Canada related to the recipient;

(

b) that is made after June 27, 1999, and before

(

i) if the Superintendent makes an order under subsection 534(1) of the Bank Act in respect of the recipient after the particular day on which the Act enacting this

section receives royal assent but before the day that is one year after the particular day, the day that is one year after the day on which the Superintendent makes the order, and

(ii)

in any other case, the day that is one year after the particular day referred to in subparagraph (i); and

(

c) that is received by a recipient that

(

i) is a non-resident person,

(ii)

is, or has filed an application with the Superintendent for an order under subsection 524(1) of the Bank Act to become, an authorized foreign bank, and

(iii)

acquired the property or service for consumption, use or supply by the recipient for the purpose of the establishment and commencement of business in Canada by the recipient as an authorized foreign bank at a foreign bank branch of the authorized foreign bank.

Supply of assets

(2) For the purposes of this Part, if a supplier and a recipient of a qualifying supply make a joint election in accordance with subsection (7) in respect of the qualifying supply,

(

a) the supplier is deemed to have made, and the recipient is deemed to have received, a separate supply of each property and service that is supplied under the agreement for the qualifying supply for consideration equal to that part of the consideration for the qualifying supply that can reasonably be attributed to that property or service;

(

b) any part of the consideration for the qualifying supply attributed to goodwill is deemed to be attributed to a taxable supply of intangible personal property unless

section 167.1 applies to the qualifying supply; and

( c )

subsections (3) to (6) apply to the supply of each property and service that is supplied under the agreement for the qualifying supply.

Effect of election

(3) For the purposes of this Part, if a supplier and a recipient make a joint election referred to in subsection (2) in respect of a qualifying supply made at any time,

(

a) no tax is payable in respect of a supply of any property or service made under the agreement for the qualifying supply other than

(

i) a taxable supply of a service that is to be rendered by the supplier,

(ii)

a taxable supply of a service unless paragraph 167(1)(

a) applies to the qualifying supply,

(iii)

a taxable supply of property by way of lease, licence or similar arrangement,

(iv)

if the recipient is not a registrant, a taxable supply by way of sale of real property,

(

v) a taxable supply of property or a service, if the property or service was previously supplied under an agreement for a qualifying supply and, by reason of this subsection, no tax was payable in respect of that previous supply of property or service, and

(vi)

a taxable supply of intangible personal property (other than capital property) if the percentage determined by the following formula is greater than 10%:

A - B where A

is the extent (expressed as a percentage of the total use of the property by the supplier) to which the supplier used the property in commercial activities immediately before that time, and

is the extent (expressed as a percentage of the total use of the property by the recipient) to which the recipient used the property in commercial activities immediately after that time;

(

b) if, in the absence of this subsection, tax would have been payable by the recipient in respect of a supply of property made under the agreement for the qualifying supply, the property was capital property of the supplier and the property is being acquired by the recipient for use as capital property of the recipient, the recipient is deemed to have so acquired the property for use exclusively in the course of commercial activities of the recipient;

(

c) if, despite this subsection, tax would not have been payable by the recipient in respect of a supply of property made under the agreement for the qualifying supply, the property was capital property of the supplier and the property is being acquired by the recipient for use as capital property of the recipient, the recipient is deemed to have so acquired the property for use exclusively in activities of the recipient that are not commercial activities; and

(

d) if the recipient acquires under the agreement for the qualifying supply property of the supplier that was used by the supplier immediately before that time otherwise than as capital property of the supplier and, in the absence of this paragraph, tax would have been payable by the recipient in respect of the supply of the property, the recipient is deemed to have acquired the property for consumption, use or supply in the course of commercial activities and otherwise than as capital property of the recipient.

Basic tax content

(4) For the purposes of this Part, if a supplier and a recipient make a joint election referred to in subsection (2) in respect of a qualifying supply and, under the agreement for the qualifying supply, the supplier makes a supply of property that is, immediately before the time the qualifying supply is made, capital property of the supplier and, by reason of subsection (3), no tax is payable in respect of the supply of the property, the basic tax content of the property of the recipient at any time shall be determined by applying the following rules:

(

a) if the last acquisition of the property by the recipient is the acquisition by the recipient at the time the qualifying supply is made, any reference in paragraphs (

a) and (

b) of the definition basic tax content in subsection 123(1) to the last acquisition or importation of the property by the person shall be read as a reference to the last acquisition or importation of the property by the supplier and not the acquisition by the recipient at the time the qualifying supply is made;

(

b) if the last supply to the recipient of the property is the supply to the recipient at the time the qualifying supply is made, the reference in paragraph (

a) of the definition basic tax content in subsection 123(1) to the last supply of the property to the person shall be read as a reference to the last supply of the property to the supplier and not the supply to the recipient at the time the qualifying supply is made; and

(

c) if, at any particular time on or after the last acquisition or importation of the property by the supplier and before the time the qualifying supply is made, the property is acquired, imported or brought into a participating province or an improvement to the property is acquired, imported or brought into a participating province, any reference in paragraphs (

a) and (

b) of the definition basic tax content in subsection 123(1) to

(

i) any acquisition, importation or bringing into a participating province of the property at that particular time or any acquisition, importation or bringing into a participating province of an improvement to the property at that particular time (in this paragraph referred to as the “actions”) by the person shall be read as a reference to actions by the supplier and not actions by the recipient,

(ii)

any tax that was payable, that would have been or would have become payable, that became payable or that had been payable by the person in respect of those actions at that particular time shall be read as a reference to tax that was payable, that would have been or would have become payable, that became payable or that had been payable by the supplier and not by the recipient,

(iii)

the person in respect of those actions at that particular time, or in respect of a particular status of the person at that particular time, shall be read as a reference to the supplier and not to the recipient,

(iv)

any tax that the person was exempt from paying in respect of those actions at that particular time shall be read as a reference to tax that the supplier, and not the recipient, was exempt from paying,

(

v) the person’s percentage for a participating province determined for the purposes of subsection 225.2(2) for the person’s taxation year that includes the time that an amount of tax became payable, or would have become payable by the person while the person was a selected listed financial institution, shall be read as a reference to the supplier’s percentage for a participating province determined for the purposes of subsection 225.2(2) for the supplier’s taxation year that includes the time that an amount of tax became payable, or would have become payable while the supplier was a selected listed financial institution, and

(vi)

all amounts that the person was, or would have been, entitled to recover by way of rebate, refund, remission or otherwise in respect of those actions at that particular time shall be read as a reference to all amounts that the supplier, and not the recipient, was, or would have been, entitled to recover by way of rebate, refund, remission or otherwise in respect of those actions.

Adjustment to net tax

(5) For the purposes of this Part, if a supplier and a recipient make a joint election referred to in subsection (2) in respect of a qualifying supply made before November 17, 2005 under an agreement for the qualifying supply and tax is paid by the recipient in respect of property or a service supplied under the agreement for the qualifying supply despite no tax being payable in respect of that supply as a result of subsection (3), the tax is deemed, except for the purposes of subsection (4) and despite subsection (3), to have been payable by the recipient in respect of the supply of the property or service and, in determining the net tax for the particular reporting period of the recipient in which the election is filed with the Minister, the recipient may deduct in determining the net tax of the recipient for the particular reporting period the total of all amounts each of which is an amount determined by the formula

A - B where A

is the amount of tax paid, despite no tax being payable as a result of subsection (3), by the recipient in respect of the supply of the property or service made under the agreement for the qualifying supply; and

is the total of

(

a) all amounts each of which is an input tax credit that the recipient was entitled to claim in respect of the property or service supplied under the agreement for the qualifying supply,

(

b) all amounts each of which is an amount (other than an amount determined under this subsection) that may be deducted by the recipient under this

Part in determining the net tax of the recipient for a reporting period in respect of the property or service supplied under the agreement for the qualifying supply, and

(

c) all amounts (other than amounts referred to in paragraphs (

a) and ( b )) in respect of the tax paid that may be otherwise recovered by way of rebate, refund, remission or otherwise by the recipient in respect of the property or service supplied under the agreement for the qualifying supply.

Limitation period where election

(6) If a supplier and a recipient make a joint election referred to in subsection (2) in respect of a qualifying supply,

section 298 applies to any assessment, reassessment or additional assessment of an amount payable by the recipient in respect of a supply of property or a service made under the agreement for the qualifying supply, but the Minister has until the day that is four years after the later of the day on which the election under subsection (2) is filed with the Minister and the day on which the qualifying supply is made, to make any assessment, reassessment or additional assessment solely for the purpose of taking into account any tax, net tax or any other amount payable by the recipient or remittable by the supplier in respect of a supply of property or a service made under the agreement for the qualifying supply.

Validity of election

(7) A joint election referred to in subsection (2) made by a supplier and a recipient in respect of a qualifying supply is valid only if

(

a) the recipient files the election with the Minister in prescribed form containing prescribed information not later than the particular day that is the latest of

(

i) if the recipient is

(

A) a registrant at the time the qualifying supply is made, the day on or before which the return under Division V is required to be filed for the recipient’s reporting period in which tax would, in the absence of this section, have become payable in respect of the supply of property or service made under the agreement for the qualifying supply, or

(

B) not a registrant at the time the qualifying supply is made, the day that is one month after the end of the recipient’s reporting period in which tax would, in the absence of this section, have become payable in respect of the supply of property or service made under the agreement for the qualifying supply,

(ii)

the day that is one year after the day on which the Act enacting this

section receives royal assent, and

(iii)

the day that the Minister may determine on application of the recipient;

(

b) the qualifying supply is made on or before the day that is one year after the day on which the recipient received for the first time a qualifying supply in respect of which an election under subsection (2) has been made; and

(

c) on or before the day on which the election referred to in subsection (2) is filed in respect of the qualifying supply, the recipient has not made an election under subsection 167(1.1) in respect of the qualifying supply.

(2) Subsection (1) is deemed to have come into force on June 28, 1999.

1997, c. 10, ss. 25(1) and 169(1)(F)

(1) The portion of subsection 176(1) of the Act before paragraph (

b) is replaced by the following:

Acquisition of used returnable containers

(1) Subject to this Division, if

(

a) a registrant is the recipient of a supply made in Canada by way of sale of used tangible personal property (other than a returnable container as defined in subsection 226(1)) that is a usual covering or container of a class of coverings or containers in which property (other than property the supply of which is a zero-rated supply) is delivered,

1997, c. 10, s. 25(1)

(2) The portion of paragraph 176(1)(

d) of the Act before subparagraph (

i) is replaced by the following:

(

d) the registrant pays consideration for the supply that is not less than the total of

(3) Subsections (1) and (2) apply to supplies for which consideration becomes due after July 15, 2002 or is paid after that day without having become due.

1997, c. 10, s. 26(1)

(1) Paragraphs 177(1.1)(

a) and (

b) of the Act are replaced by the following:

(

a) the tax collectible in respect of the supply or any amount charged or collected by the registrant on behalf of the person as or on account of tax in respect of the supply is deemed to be collectible, charged or collected, as the case may be, by the registrant, and not by the person, for the purposes of

(

i) determining the net tax of the registrant and of the person, and

(ii)

applying sections 222 and 232;

(

b) the registrant and the person are jointly and severally, or solidarily, liable for all obligations under this Part that arise upon or as a consequence of

(

i) the tax becoming collectible,

(ii)

a failure to account for or pay as and when required under this Part an amount of net tax of the registrant, or an amount required under

section 230.1 to be paid by the registrant, that is reasonably attributable to the supply,

(iii)

the registrant claiming, in respect of the supply, an amount as a deduction under

section 231 or 232 to which the registrant was not entitled or in excess of the amount to which the registrant was entitled,

(iv)

a failure to pay as and when required under this Part the amount of any underpayment of net tax by the registrant, or an amount required under

section 230.1 to be paid by the registrant, that is reasonably attributable to a claim referred to in subparagraph (iii),

(

v) a recovery of all or part of a bad debt relating to the supply in respect of which the registrant claimed a deduction under subsection 231(1), or

(vi)

a failure to account for or pay as and when required under this Part an amount of net tax of the registrant, or an amount required under

section 230.1 to be paid by the registrant, that is reasonably attributable to an amount required under subsection 231(3) to be added to the net tax of the registrant in respect of a bad debt referred to in subparagraph (v); and

(

c) the threshold amounts of the registrant and of the person under subsections 249(1) and (2) shall be determined as if any consideration that became due to the person, or was paid to the person without having become due, in respect of the supply had become due to the registrant, or had been paid to the registrant without having become due, as the case may be, and not to the person.

(2) Section 177 of the Act is amended by adding the following after subsection (1.1):

Billing agent

(1.11) If a registrant acts as agent of a supplier in charging and collecting consideration and tax payable in respect of a supply made by the supplier but the registrant does not act as agent in making the supply, the registrant is deemed to have acted as agent of the supplier in making the supply for the purposes of

( a )

subsection (1.1); and

(

b) if an election under subsection (1.1) is made in respect of the supply, any other provision that refers to a supply in respect of which an election under that subsection has been made.

Joint revocation

(1.12) A registrant and a supplier who have jointly made an election under subsection (1.1) may, in prescribed form containing prescribed information, jointly revoke the election with respect to any supply made on or after the effective date specified in the revocation, and the election is thereby deemed, for the purposes of this Part, not to have been made with respect to that supply.

(3) Paragraphs 177(1.1)(

a) and (

c) of the Act, as enacted by subsection (1), and subsection 177(1.11) of the Act, as enacted by subsection (2), apply to supplies made after December 20, 2002.

(4) Paragraph 177(1.1)(

b) of the Act, as enacted by subsection (1), applies to supplies made after April 23, 1996 in respect of which an election under subsection 177(1.1) of the Act is made at any time, except that, with respect to any supply made before December 21, 2002 in respect of which an election under that subsection was made before December 21, 2002,

(

a) subparagraph 177(1.1)( b )(ii) of the Act, as enacted by subsection (1), shall be read as follows:

(ii)

a failure to account for or remit the tax,

and

(

b) the reference in subparagraph 177(1.1)( b )(iii) of the Act, as enacted by subsection (1), to “section 231 or 232” shall be read as a reference to “section 231”.

(5) Subsection 177(1.12) of the Act, as enacted by subsection (2), is deemed to have come into force on December 20, 2002.

2000, c. 30, s. 32(1)

(1) Paragraph 178.7(1)(

b) of the French version of the Act is replaced by the following:

b) l’acquéreur du service est un organisme du secteur public ou une commission ou autre organisme établi par un gouvernement ou une municipalité.

(2) Subsection (1) is deemed to have come into force on February 24, 1998 and applies to reporting periods beginning after that day.

(1) The Act is amended by adding the following after

section 178.7:

Import Arrangements

Definition of specified supply

178.8

(1) In this section, specified supply means a supply of goods that

(

a) are, at any time after the supply is made, imported; or

(

b) have been imported in circumstances in which

section 144 deems the supply to have been made outside Canada.

Deemed importer of goods

(2) Subject to subsections (4) and (7), if a recipient of a specified supply of goods made outside Canada does not, at any time before the release of the goods, supply the goods outside Canada and the recipient or any other person imported the goods for consumption, use or supply by the recipient (in this

section referred to as the “constructive importer”), the constructive importer is deemed to have so imported the goods, and any amount paid or payable as or on account of tax on the goods under Division III in respect of the importation is deemed to have been paid or payable, as the case may be, by or on behalf of the constructive importer and not by or on behalf of any other person.

Agreement to treat supply as made in Canada

(3) If a registrant makes a specified supply of goods outside Canada that is a taxable supply, the recipient of the supply is the constructive importer of the goods and an amount is, in the absence of subsection (2), paid or payable by or on behalf of the registrant as or on account of tax on the goods under Division III in respect of the importation, the registrant and the recipient may at any time agree, in prescribed form containing prescribed information, to have subsection (4) apply in respect of the supply and importation.

Effect of agreement

(4) If a registrant and the constructive importer of goods have entered into an agreement under subsection (3) in respect of the supply and importation of the goods and the constructive importer has not entered into an agreement under subsection (5) in respect of any amount paid as or on account of tax on the goods under Division III in respect of the importation,

(

a) the supply is deemed to have been made in Canada

(

i) in the case of a constructive importer who is an individual to whom the goods are shipped to a destination in Canada by another person, at the address to which the goods are sent by mail or courier by the shipper or at the destination that is specified in the contract for carriage of the goods or at which the shipper has directed a common carrier or consignee retained on behalf of the constructive importer to transfer physical possession of the goods, and

(ii)

in any other case, at the place at which the goods are released;

(

b) except if subsection 155(1) applies, the consideration for the supply is deemed to be equal to the amount otherwise determined for the purposes of this Part plus any amount (in this paragraph referred to as “additional consideration”) not otherwise included in that consideration that the constructive importer at a particular time pays or is required to pay to the registrant in respect of duties or taxes payable on the goods under this Act (other than this Part), the Customs Tariff , the Excise Act, 2001 , the Special Import Measures Act or any other law relating to customs and, despite

section 168, the tax in respect of the supply that is calculated on the additional consideration becomes payable at the particular time;

(

c) the registrant is deemed to have imported the goods for the purpose of supply in the course of commercial activities of the registrant; and

(

d) any amount paid or payable as or on account of tax on the goods under Division III in respect of the importation is deemed to have been paid or payable, as the case may be, by or on behalf of the registrant and not by or on behalf of any other person.

Agreement regarding rebates, abatements and refunds

(5) If the constructive importer of goods is deemed under subsection (2) to be the person by whom the goods are imported but another person (in this

section referred to as the “specified importer”) was identified, for the purposes of the Customs Act , as the importer of the goods when the goods were accounted for under

section 32 of that Act and, in the absence of subsection (2), paid an amount as or on account of tax on the goods under Division III, the constructive importer and the specified importer may agree in writing to have subsection (7) apply in respect of that amount.

Restriction

(6) Subsection (5) does not apply to any amount in respect of which, because of

section 263.01, the constructive importer of goods would not be entitled to a rebate referred to in that

section if the constructive importer paid the amount as or on account of tax on the goods under Division III.

Effect of agreement

(7) If a constructive importer of goods and a specified importer have entered into an agreement under subsection (5) to have this subsection apply in respect of an amount paid as or on account of tax on the goods under Division III and the constructive importer has not entered into an agreement under subsection (3) with the supplier of the goods in respect of the importation,

(

a) subsections 215.1(2) and (3) and 216(6) and (7) apply as if the specified importer and not the constructive importer were the person by whom the goods were imported and the amount was paid, but only if, within a reasonable time after any rebate under subsection 215.1(2) or 216(6) in respect of the amount is granted or any abatement or refund is, because of subsection 215.1(3) or 216(7), granted in respect of the amount, the specified importer issues to the constructive importer a note (in this subsection referred to as a “tax adjustment note”), in prescribed form containing prescribed information, indicating the amount of the rebate, abatement or refund;

(

b) in applying subsection 215.1(2) or (3) in respect of the amount in accordance with paragraph ( a ), that subsection shall be read without reference to subparagraphs ( a )(

i) and (ii), and paragraph ( c ), of that subsection; and

(

c) if the constructive importer receives a tax adjustment note indicating the amount of a rebate, abatement or refund,

(

i) the amount that is rebated, abated or refunded is deemed to have been payable as tax and to have been recovered by the constructive importer and, except for the purposes of

section 232, the tax adjustment note is deemed to be a credit note referred to in that

section received by the constructive importer for the amount of the rebate, abatement or refund,

(ii)

the amount of the rebate, abatement or refund shall be added in determining the net tax of the constructive importer for the reporting period in which the tax adjustment note is received, to the extent that the amount has been included in determining an input tax credit claimed by the constructive importer in a return filed for that or a preceding reporting period or the constructive importer is or was entitled to be compensated under a warranty for loss suffered because of any of the circumstances that gave rise to the rebate, abatement or refund by receiving a supply of replacement parts, or replacement property, that are goods included in

section 5 of

Schedule VII, and

(iii)

if the amount rebated, abated or refunded has been included in determining a rebate under Division VI paid to, or applied to a liability of, the constructive importer before the particular day on which the tax adjustment note is received and the rebate so paid or applied exceeds the rebate under that Division to which the constructive importer would have been entitled if the amount rebated, abated or refunded had not been paid, the constructive importer shall pay to the Receiver General under

section 264 the excess as if it were an excess amount of the rebate under that Division paid to the constructive importer

(

A) if the constructive importer is a registrant, on the day on or before which the constructive importer’s return for the reporting period that includes the particular day is required to be filed, and

(

B) in any other case, on the last day of the calendar month immediately following the calendar month that includes the particular day.

Application

(8) Subject to subsection (9), subsections (2) to (7) apply for the purposes of this Part other than

(

a) Division III except subsections 215.1(2) and (3) and 216(6) and (7);

(

b) sections 220.07, 236.3 and 273.1;

(

c) Schedule VII; and

(

d) the Non-Taxable Imported Goods (GST/HST) Regulations and the Value of Imported Goods (GST/HST) Regulations .

Application

(9) Subsections (2) to (7) do not apply in respect of goods imported in circumstances in which subsection 169(2) applies or in which

section 180 deems a person to have paid tax in respect of a supply of property equal to the tax under Division III in respect of the importation of goods.

Limitation period where retroactive agreement

(10) If a registrant and a constructive importer enter into an agreement under subsection (3) in respect of a previous importation of goods, the Minister has, despite

section 298, until the day that is four years after the day on which the agreement under subsection (3) is entered into to make any assessment, reassessment or additional assessment for the purpose of taking into account an amount payable or remittable by the registrant or the constructive importer as a result of the application of subsection (4).

(2) Subsection (1) applies to goods imported on or after October 3, 2003 and to goods imported before that day that were not accounted for under

section 32 of the Customs Act before that day.

1997, c. 10, s. 183(1)

(1) Paragraph (

b) of the description of A in subsection 193(1) of the Act is replaced by the following:

(

b) the tax that is or would, in the absence of

section 167 or 167.11, be payable in respect of the particular taxable supply, and

(2) Subsection (1) is deemed to have come into force on June 28, 1999.

1997, c. 10, s. 191(1)

(1) The description of A in paragraph 201(

b) of the Act is replaced by the following:

is the tax that would be payable by the registrant in respect of the vehicle if the registrant acquired the vehicle at the particular time

(

i) where the registrant is bringing the vehicle into a participating province at the particular time, in that province, and

(ii)

in any other case, in Canada

for consideration equal to the amount that would be deemed under paragraph 13(7)(

g) or (

h) of the Income Tax Act to be, for the purposes of

section 13 of that Act, the capital cost to a taxpayer of a passenger vehicle in respect of which that paragraph applies if the formula in paragraph 7307(1)(

b) of the Income Tax Regulations were read without reference to the description of B,

(2) Subsection (1) applies to any passenger vehicle that is acquired, imported or brought into a participating province after November 27, 2006 and to any passenger vehicle acquired, imported or brought into a participating province on or before that day unless an input tax credit in respect of the acquisition, importation or bringing in, as the case may be,

(

a) was claimed pursuant to

section 201 of the Act in a return filed under Division V of

Part IX of the Act on or before that day; and

(

b) was determined on the basis that the capital cost of the passenger vehicle for the purposes of the Income Tax Act included federal and provincial sales taxes.

1990, c. 45, s. 12(1)

(1) Subsection 202(1) of the Act is replaced by the following:

Improvement to passenger vehicle

(1) If the consideration paid or payable by a registrant for an improvement to a passenger vehicle of the registrant increases the cost to the registrant of the vehicle to an amount that exceeds the amount that would be deemed under paragraph 13(7)(

g) or (

h) of the Income Tax Act to be, for the purposes of

section 13 of that Act, the capital cost to a taxpayer of a passenger vehicle in respect of which that paragraph applies if the formula in paragraph 7307(1)(

b) of the Income Tax Regulations were read without reference to the description of B, the tax calculated on that excess shall not be included in determining an input tax credit of the registrant for any reporting period of the registrant.

(2) Subsection (1) applies to any improvement to a passenger vehicle that is acquired, imported or brought into a participating province after November 27, 2006 and to any improvement to a passenger vehicle acquired, imported or brought into a participating province on or before that day unless an input tax credit in respect of the acquisition, importation or bringing in, as the case may be,

(

a) was claimed pursuant to

section 202 of the Act in a return filed under Division V of

Part IX of the Act on or before that day; and

(

b) was determined on the basis that the capital cost of the passenger vehicle for the purposes of the Income Tax Act included federal and provincial sales taxes.

(1) Section 205 of the Act is amended by adding the following after subsection (4):

Acquisition of asset

(4.1) Despite

section 197, subsection 193(1) applies to the supplier of a supply of capital personal property that is made under an agreement for a qualifying supply (as defined in subsection 167.11(1)), and subsections 206(4) and (5) apply to the recipient of the supply of capital personal property, with any modifications that the circumstances require, as if the property were real property if

(

a) the supplier and the recipient are both registrants at the time the qualifying supply is made and they make a joint election referred to in subsection 167.11(2) in respect of the qualifying supply;

(

b) in acquiring the property, the recipient is deemed under subsection 167.11(3) to have acquired the property for use exclusively in commercial activities of the recipient; and

(

c) immediately after the earlier of the time the ownership of the property and the time the possession of the property is transferred to the recipient under the agreement for the qualifying supply, the property is for use by the recipient as capital property of the recipient but not exclusively in commercial activities of the recipient.

(2) Section 205 of the Act is amended by adding the following after subsection (5):

Acquisition of asset

(5.1) Despite

section 197, subsection 206(2) applies to the recipient of a supply of capital personal property that is made under an agreement for a qualifying supply (as defined in subsection 167.11(1)), with any modifications that the circumstances require, as if the property were real property if

(

a) the supplier and the recipient of the capital personal property are both registrants at the time the qualifying supply is made and they make a joint election referred to in subsection 167.11(2) in respect of the qualifying supply;

(

b) in acquiring the property, the recipient is deemed under subsection 167.11(3) to have acquired the property for use exclusively in activities of the recipient that are not commercial activities; and

(

c) immediately after the earlier of the time the ownership of the property and the time the possession of the property is transferred to the recipient under the agreement for the qualifying supply, the property is for use by the recipient as capital property of the recipient in commercial activities of the recipient.

(3) Subsections (1) and (2) are deemed to have come into force on June 28, 1999.

1993, c. 27, s. 81(1); 1997, c. 10, s. 41(3); 2000, c. 30, s. 44(2); 2005, c. 38, s. 105(2) and subpar. 145(2)( g )(v)

(1) Subsection 215.1(3) of the Act is replaced by the following:

Abatement or refund of tax as if it were duty

(3) Subject to

section 263, sections 73, 74 and 76 of the Customs Act apply, with any modifications that the circumstances require, to an amount paid by a person as tax under this Division as though the amount were duties paid under that Act, where

(

a) the amount was paid as tax on goods that were imported

(

i) for consumption, use or supply otherwise than exclusively in the course of a commercial activity of the person, or

(ii)

for consumption, use or supply in the course of a commercial activity of the person and the person was, at the time of the release of the goods, a small supplier who was not registered under Subdivision d of Division V;

(

b) if the goods had been subject to duties paid under that Act, an abatement or refund of the whole or part of the duties could have been granted under

section 73, 74 or 76 of that Act because of circumstances

(

i) described in paragraph 73(

a) or ( b ), any of paragraphs 74(1)(

a) to (

c) or subsection 76(1) of that Act, or

(ii)

in which an error was made in the determination under subsection 58(2) of that Act of the value of the goods and the determination has not been the subject of a decision under any of sections 59 to 61 of that Act;

(

c) the person has not been and is not entitled to be compensated under a warranty for loss suffered because of any of those circumstances by receiving a supply of replacement parts, or replacement property, that are goods included in

section 5 of

Schedule VII; and

(

d) within two years after the day on which the amount was paid as tax under this Division, the person files with the Minister an application, in prescribed form containing prescribed information, for a rebate of the amount.

(2) Subsection (1) is deemed to have come into force on January 1, 1998, except that, in applying subsection 215.1(3) of the Act, as enacted by subsection (1), in determining rebates under that subsection before October 20, 2000, paragraph 215.1(3)(

c) shall be read as follows:

(

c) the person has not been and is not entitled to be compensated under a warranty for loss suffered because of any of those circumstances by receiving a supply of replacement parts that are goods included in

section 5 of

Schedule VII; and

1993, c. 27, s. 82(1); 2005, c. 38, s. 106

(1) Subsections 216(4) to (6) of the Act are replaced by the following:

Appeals of determination of tax status

(4) In applying the Customs Act to a determination of the tax status of goods, the references in that Act to the “Canadian International Trade Tribunal” and to the “Secretary of the Canadian International Trade Tribunal” shall be read as references to the “Tax Court of Canada” and to the “Registrar of the Tax Court of Canada”, respectively.

Application of

Part IX and Tax Court of Canada Act

(5) The provisions of this Part and of the Tax Court of Canada Act that apply to an appeal taken under

section 302 apply, with any modifications that the circumstances require, to an appeal taken under subsection 67(1) of the Customs Act from a decision of the President of the Canada Border Services Agency made under

section 60 or 61 of that Act in a determination of the tax status of goods as if the decision of the President were a confirmation of an assessment or a reassessment made by the Minister under subsection 301(3) or (4) as a consequence of a notice of objection filed under subsection 301(1.1) by the person to whom the President is required to give notice under

section 60 or 61 of the Customs Act , as the case may be, of the decision.

Rebate resulting from appraisal or re-appraisal

(6) If, because of an appraisal, a re-appraisal or a further re-appraisal of the value of goods or a determination of the tax status of goods, it is determined that the amount that was paid as tax under this Division on the goods exceeds the amount of tax that is required under this Division to be paid on the goods and a refund of the excess would be given under paragraph 59(3)(

b) or 65(1)(

b) of the Customs Act if the tax under this Division on the goods were a customs duty on the goods levied under the Customs Tariff , a rebate of the excess shall, subject to

section 263, be paid to the person who paid the excess, and the provisions of the Customs Act that relate to the payment of such refunds and interest on such refunds apply, with any modifications that the circumstances require, as if the rebate of the excess were a refund of duty.

(2) Subsection (1) is deemed to have come into force on January 1, 1998, except that, before December 12, 2005, subsection 216(5) of the Act, as enacted by subsection (1), shall be read as follows:

Application of

Part IX and Tax Court of Canada Act

(5) The provisions of this Part and of the Tax Court of Canada Act that apply to an appeal taken under

section 302 apply, with any modifications that the circumstances require, to an appeal taken under subsection 67(1) of the Customs Act from a decision of the Commissioner made under

section 60 or 61 of that Act in a determination of the tax status of goods as if the decision of the Commissioner were a confirmation of an assessment or a reassessment made by the Minister under subsection 301(3) or (4) as a consequence of a notice of objection filed under subsection 301(1.1) by the person to whom the Commissioner is required to give notice under

section 60 or 61 of the Customs Act , as the case may be, of the decision.

(1) Section 217 of the Act is amended by adding the following after paragraph ( b.1 ):

( b.11 )

a particular taxable supply (other than a zero-rated supply) of property by way of lease, licence or similar arrangement that is deemed under subsection 143(1) to be made outside Canada to a recipient (in this paragraph referred to as the “lessee”) who is resident in Canada, if

(

i) a previous supply of the property to the lessee was made by way of lease, licence or similar arrangement (in this paragraph referred to as the “first lease”) that was deemed under subsection 178.8(4) to be made in Canada,

(ii)

the agreement for the particular taxable supply is an agreement (in this subparagraph referred to as a “subsequent lease”) that results from the assignment of, or that succeeds, upon the renewal or variation of, the first lease or a subsequent lease, and

(iii)

the lessee is not a registrant who is acquiring the property for consumption, use or supply exclusively in the course of commercial activities of the lessee;

(2) Subsection (1) applies to any supply of property referred to in paragraph 217( b.11 ) of the Act as a particular taxable supply if the recipient of that supply previously received a supply of the property by way of lease, licence or similar arrangement that was deemed under subsection 178.8(4) of the Act to be made in Canada.

1997, c. 10, s. 204(1)

(1) Section 220.01 of the Act is replaced by the following:

Definitions

220.01

The following

definitions apply in this Division.

provincial authority

autorité provinciale

provincial authority means any department or agency of a province that is empowered under the laws of that province to collect, at the time when a specified motor vehicle is registered in the province, any specified provincial tax imposed in respect of the specified motor vehicle.

specified provincial tax

taxe provinciale déterminée

specified provincial tax means

(

a) in the case of a vehicle registered in the province of Nova Scotia, the tax imposed under

Part IIA of the Revenue Act , S.N.S. 1995-96, c. 17, as amended from time to time;

(

b) in the case of a vehicle registered in the province of New Brunswick, the tax imposed under

Part V of the Harmonized Sales Tax Act , S.N.B. 1997, c. H-1.01, as amended from time to time; and

(

c) in the case of a vehicle registered in the province of Newfoundland and Labrador, the tax imposed under the Retail Sales Tax Act , R.S.N.L. 1990, c. R-15, as amended from time to time.

specified value

valeur déterminée

specified value , in respect of a specified motor vehicle that a person is required to register under the laws of a participating province relating to the registration of motor vehicles, means the value that would be attributed to the specified motor vehicle by the provincial authority for that province for the purpose of calculating the specified provincial tax payable if, at the time of registration, that tax were payable in respect of the specified motor vehicle.

tangible personal property

bien meuble corporel

tangible personal property includes a mobile home that is not affixed to land and a floating home.

(2) Subsection (1) is deemed to have come into force on April 1, 1997.

1997, c. 10, s. 204(1)

(1) Paragraph (

a) of the description of B in subsection 220.05(1) of the Act is replaced by the following:

(

a) where the property is a specified motor vehicle that the person is required to register under the laws of the particular participating province relating to the registration of motor vehicles, the specified value,

(2) Subsection (1) is deemed to have come into force on April 1, 1997.

1997, c. 10, s. 204(1)

(1) Paragraph 220.07(3)(

a) of the Act is replaced by the following:

(

a) in the case of a specified motor vehicle that a person is required to register under the laws of the province relating to the registration of motor vehicles, the specified value;

(2) Subsection (1) is deemed to have come into force on April 1, 1997.

1997, c. 10, s. 204(1)

(1) Subsection 220.09(2) of the Act is replaced by the following:

Exception

(2) Despite subsection (1), if the tax under

section 220.05, 220.06 or 220.07 is payable to Her Majesty in right of Canada by a person in respect of a specified motor vehicle that the person is required to register under the laws of a participating province relating to the registration of motor vehicles, the person shall pay the tax to the provincial authority in its capacity as agent of Her Majesty in right of Canada at the earlier of the time at which the person registers the vehicle and the time at or before which the person is required to register it, and

(

a) if the person is a registrant, the person is not required to report the tax in a return; and

(

b) if the person is not a registrant, the person is not required to file a return in respect of the tax.

(2) Subsection (1) is deemed to have come into force on April 1, 1997.

2000, c. 30, s. 49(1)

(1) Paragraph 221.1(2)(

a) of the Act is replaced by the following:

(

a) that at least 90% of the total of all consideration for supplies to the person of items of inventory acquired in Canada by the person in the 12-month period commencing immediately after the particular day will be attributable to supplies that would be included in

section 1 of that

Part if it were read without reference to paragraph (

e) of that section; and

(2) Subsection (1) is deemed to have come into force on January 1, 2001.

1997, c. 10, s. 45(1)

(1) Paragraph (

c) of the description of A in subsection 225.1(2) of the Act is replaced by the following:

(

c) the total of all amounts each of which is an amount in respect of supplies of real property or capital property made by way of sale by or to the charity that is required under subsection 231(3) or 232(3) to be added in determining the net tax for the particular reporting period, and

2000, c. 30, s. 53(7)

(2) Paragraph ( b.1 ) of the description of B in subsection 225.1(2) of the Act is repealed.

(3) Subsection (1) applies for the purpose of determining the net tax of a charity for reporting periods beginning after 1996.

(4) Subsection (2) applies for the purpose of determining the net tax of a charity for reporting periods beginning after the last reporting period of the charity that ends within four years after the reporting period of the charity that includes July 15, 2002.

1997, c. 10, s. 208(1)

(1) Paragraph 225.2(5)(

c) of the Act is replaced by the following:

(

c) be filed by the financial institution with the Minister in prescribed manner on or before

(

i) the day on or before which a return under Division V for the reporting period of the financial institution in which the election is to become effective is required to be filed, or

(ii)

any later day that the Minister may allow.

(2) Subsection (1) is deemed to have come into force on October 3, 2003.

1993, c. 27, s. 89(1)

(1) The portion of subsection 226(2) of the Act before paragraph (

a) is replaced by the following:

Separate supply of beverage and container

(2) For the purposes of this section, if a person supplies a beverage in a returnable container in circumstances in which the person typically does not unseal the container,

1993, c. 27, s. 89(1); 1997, c. 10, s. 209

(2) Section 226 of the Act, as amended by subsection (1), is replaced by the following:

Definitions

(1) The following

definitions apply in this section.

applicable legislated amount

montant obligatoire applicable

applicable legislated amount in a province for a returnable container of a particular class means

(

a) except if paragraph (

b) applies, the legislated consumers’ refund in the province for a returnable container of that class; or

(

b) if, under

an Act of the legislature of the province in respect of recycling, a legislated consumers’ refund for a returnable container of that class is specified and another amount (in this paragraph referred to as the “recycler’s reimbursement”) is specified as the amount to be paid, otherwise than specifically in respect of the handling of the container, for a used and empty returnable container of that class when supplied by a person who, on acquiring it used and empty, paid an amount as the legislated consumers’ refund for the container, but no amount is specified as the amount, or the minimum amount, to be charged by a distributor in respect of the supply of a filled and sealed returnable container of that class, the recycler’s reimbursement.

consumers’ recycler

récupérateur

consumers’ recycler , in respect of a returnable container of a particular class in a province, means a person who, in the ordinary course of their business, acquires in the province used and empty returnable containers of that class from consumers for consideration.

distributor

distributeur

distributor of a returnable container of a particular class in a province means a person who supplies beverages in filled and sealed returnable containers of that class in the province and charges a returnable container charge in respect of the returnable containers.

legislated consumers’ refund

remboursement obligatoire aux consomma­teurs

legislated consumers’ refund in a province for a returnable container of a particular class means the amount, or the minimum amount, that, under

an Act of the legislature of the province in respect of recycling, must be paid in certain circumstances for a used and empty returnable container of that class to a person of a class that includes consumers.

recycler

recycleur

recycler of returnable containers of a particular class in a province means

(

a) a person who, in the ordinary course of their business, acquires used and empty returnable containers of that class (or the material resulting from their compaction) in the province for consideration; or

(

b) a person who, in the ordinary course of their business, pays consideration to a person referred to in paragraph (

a) in compensation for that person acquiring used and empty returnable containers of that class and paying consideration for those containers.

recycling

recyclage

recycling , in respect of a province, means

(

a) the return, redemption, reuse, destruction or disposal of

(

i) returnable containers in the province, or

(ii)

returnable containers in the province and other goods; or

(

b) the control or prevention of waste or the protection of the environment.

refund

montant remboursé

refund , at any time in a province, means

(

a) in relation to a returnable container of a particular class that is supplied used and empty, or that is filled with a beverage that is supplied, at that time in the province,

(

i) the greatest of

(

A) if there is an applicable legislated amount in the province for returnable containers of that class, that amount,

(

B) if the supplier is a consumers’ recycler who, in the ordinary course of their business, sells the beverage in returnable containers of that class in the province and the usual returnable container charge that is charged by the supplier when so selling the beverage is not less than the amount (in this clause referred to as the “usual refund”) that is, at that time, the usual consideration that the supplier pays for supplies in the province of used and empty returnable containers of that class from consumers, the usual refund,

(

C) if the supplier is a consumers’ recycler who does not, in the ordinary course of their business, sell the beverage in returnable containers of that class in the province, the amount that is, at that time, the usual consideration that the supplier pays for supplies in the province of used and empty returnable containers of that class from consumers, and

(

D) if, at that time,

(

I) in accordance with established industry practice, suppliers charge a common amount as the usual returnable container charge when selling the beverage in returnable containers of that class in the province, and

(II)

it is not exceptional for the usual amount paid to consumers by consumers’ recyclers as consideration for supplies in the province of used and empty returnable containers of that class to vary among consumers’ recyclers,

the greatest of those usual amounts paid to consumers not exceeding the usual returnable container charge, and

(ii)

if none of clauses (i)(

A) to (

D) applies, the portion of the amount that is, at that time, the consideration paid, in the greatest number of cases, by consumers’ recyclers for supplies in the province of used and empty returnable containers of that class from consumers that does not exceed the amount that is, at that time, the returnable container charge charged in the greatest number of cases by suppliers when selling the beverage in returnable containers of that class in the province; and

(

b) in relation to a returnable container of a particular class in respect of which a supply is made at that time in the province of a service to which subsection (7) applies,

(

i) if the supplier is a consumers’ recycler, the amount that is, at that time, the usual consideration that the supplier pays for supplies in the province of used and empty returnable containers of that class from consumers, and

(ii)

in any other case, the amount that is, at that time, the consideration paid, in the greatest number of cases, by consumers’ recyclers for supplies in the province of used and empty returnable containers of that class from consumers.

returnable container

contenant consigné

returnable container in a province means a beverage container of a class of containers that

(

a) are ordinarily acquired by consumers;

(

b) when acquired by consumers, are ordinarily filled and sealed; and

(

c) are ordinarily supplied in the province used and empty by consumers for consideration.

returnable container charge

droit sur contenant consigné

returnable container charge , at any time, means

(

a) in relation to a returnable container of a particular class containing a beverage that is supplied at that time in a province, the total of all amounts, each of which is charged by the supplier

(

i) as an amount in respect of recycling in the province,

(ii)

for the purpose of recovering an amount equivalent to the amount referred to in subparagraph (

i) that was charged to the supplier, or

(iii)

for the purpose of recovering an amount equivalent to the amount that was charged to the supplier by another supplier for the purpose referred to in subparagraph (ii) or for the purpose referred to in this subparagraph;

(

b) in relation to a filled and sealed returnable container containing a beverage that is held by a person at that time for consumption, use or supply in a province,

(

i) if the beverage is held at that time by the person for the purpose of making a supply in the province of the beverage in the container, the amount that the person can reasonably expect will be determined under paragraph (

a) in respect of the container when the beverage is so supplied, and

(ii)

in any other case, the amount in respect of the container that would reasonably be expected to be determined under paragraph (

a) if the beverage were supplied at that time to the person in the province; and

(

c) in relation to a returnable container of a particular class in respect of which a recycler of returnable containers of that class makes at that time a supply in a province of a service in respect of recycling to a distributor, or a recycler, of returnable containers of that class,

(

i) if

an Act of the legislature of the province in respect of recycling specifies an amount, or a minimum amount, that must be collected from, or paid by, a recipient in certain circumstances for the supply of a beverage in a returnable container of that class, that amount, and

(ii)

in any other case, the amount in respect of the container that would reasonably be expected to be determined under paragraph (

a) if the container were filled and sealed and contained a beverage that was being supplied at that time in the province.

specified beverage retailer

vendeur au détail déterminé

specified beverage retailer , in respect of a returnable container of a particular class, means a registrant

(

a) who, in the ordinary course of the registrant’s business, makes supplies (in this definition referred to as specified supplies ) of beverages in returnable containers of that class to consumers in circumstances in which the registrant typically does not unseal the containers; and

(

b) whose circumstance is not that all or substantially all of the supplies of used and empty returnable containers of that class that are gathered by the registrant at establishments at which the registrant makes specified supplies are of containers that the registrant acquired used and empty for consideration.

Taxable supply of beverage in returnable container

(2) Subject to subsection (3), for the purposes of this Part, if a supplier makes a particular taxable supply (other than a zero-rated supply) in a province of a beverage in a filled and sealed returnable container of a particular class in circumstances in which the supplier typically does not unseal the container, and the supplier charges the recipient a returnable container charge in respect of the container,

(

a) the consideration for the particular supply is deemed to be equal to the amount determined by the formula

A - B where A

is the consideration for the particular supply as otherwise determined for the purposes of this Part, and

is the returnable container charge;

(

b) if the returnable container charge exceeds the refund for the container, the supplier is deemed to have made to the recipient, at the time at which the consideration for the particular supply becomes due or would, in the absence of

section 156, have become due, a taxable supply in the province of a service in respect of the container for consideration, separate from the consideration for the beverage, that becomes due at that time and that is, subject to that section, equal to

(

i) except if subparagraph (ii) applies, the amount by which the returnable container charge exceeds the refund for the container, or

(ii)

if

an Act of the legislature of the province is prescribed for the purposes of this paragraph,

(

A) if that province is a participating province and that Act, or regulations made under it, specify an amount in respect of a returnable container of that class that must be equal to or not less than the total (in this clause referred to as the “tax-included charge”) of the returnable container charge to be charged in respect of the particular supply or a previous supply of the beverage in the container and any applicable tax under this Part, the amount determined by the formula

A × [100/(100 + B)] where A

is the amount by which the tax-included charge exceeds the refund for the container, and

is the total of the rate of tax under subsection 165(1) and the tax rate for the province, and

(

B) in any other case, the amount determined in prescribed manner; and

(

c) the recipient is deemed to have acquired that service for the same purpose as that for which the recipient acquired the beverage.

Exception for specified beverage retailer

(3) Subsection (2) does not apply to a supply by a registrant of a beverage in a returnable container in respect of which the registrant is a specified beverage retailer if the registrant elects not to deduct the amount of the returnable container charge in respect of the container in determining the consideration for the supply for the purposes of this Part.

Supply of used container

(4) If a person makes a particular supply in a province of a used and empty returnable container (or the material resulting from its compaction),

(

a) the value of the consideration for the particular supply is deemed, for the purposes of this Part other than this section, to be nil; and

(

b) if the consideration exceeds the refund for the container, the supplier is deemed, for the purposes of this Part, to have made to the recipient, at the time at which the consideration for the particular supply becomes due or would, in the absence of

section 156, have become due, a taxable supply in the province of a service in respect of the container for consideration, that is separate from the consideration for the particular supply, equal to the excess amount.

Exception

(5) Subsection (4) does not apply

(

a) for the purposes of

section 5 of

Part V.1 of

Schedule V or

section 10 of

Part VI of that Schedule; or

(

b) to a supply made in a province of a used and empty returnable container of a particular class (or the material resulting from its compaction) if the usual business practice of the recipient is to pay consideration for supplies in the province of used and empty returnable containers of that class (or the material resulting from their compaction) that is determined based on the value of the material from which the containers are made or is otherwise determined based neither on the amount of the refund for the returnable containers nor on the amount of the returnable container charge in respect of filled and sealed returnable containers of that class containing beverages that are supplied in the province.

Supply of recycling service to distributor

(6) For the purposes of this Part (other than

section 5 of

Part V.1 of

Schedule V and

section 10 of

Part VI of that Schedule), if

(

a) a recycler of returnable containers of a particular class makes a particular taxable supply in a province of a service in respect of the recycling of returnable containers of that class to a distributor of returnable containers of that class who is not a recycler who supplies such services to other distributors of returnable containers of that class,

(

b) the recycler does not supply the containers to the distributor, and

(

c) the consideration for the particular supply is based in whole or in part on the amount in that province of the returnable container charge in respect of returnable containers of that class or on an amount that a consumer could reasonably expect to receive for a used and empty returnable container of that class,

the value of the consideration for the particular supply is deemed to be equal to the amount determined by the formula

A - B where A

is the consideration for the particular supply as otherwise determined for the purposes of this Part; and

is the total of all amounts each of which is the returnable container charge in that province for a returnable container in respect of which that consideration is paid or payable.

Supply between recyclers

(7) For the purposes of this Part, if a recycler of returnable containers of a particular class makes a particular taxable supply in a province of a service in respect of the recycling of returnable containers of that class to another recycler of returnable containers of that class without supplying the containers to the other recycler and the consideration for the particular supply is based in whole or in part on the amount in that province of the refund, or the returnable container charge, in respect of returnable containers of that class, the value of the consideration for the particular supply is deemed to be equal to the amount determined by the formula

A - B where A

is the consideration for the particular supply as otherwise determined for the purposes of this Part; and

is the total of all amounts each of which is the refund in that province for a returnable container in respect of which that consideration is paid or payable.

Special rules in the case of prescribed provincial Act

(8) Subject to subsection (9), if a registrant acquires, in a province in which

an Act prescribed for the purposes of paragraph (2)(

b) applies, a beverage in a returnable container for the purpose of making in that province a taxable supply of the beverage in the container in circumstances in which the registrant will charge a returnable container charge in respect of the container and be required to collect tax in respect of the supply,

(

a) if a supply of a service in respect of the container is deemed under that paragraph to have been made to the registrant, the tax in respect of the supply of the service shall not be included in determining an input tax credit of the registrant; and

(

b) if the registrant makes a supply in that province of the beverage in circumstances in which the registrant is deemed under that paragraph to have made a supply of a service in respect of the container, neither the consideration for the supply of that service nor any tax in respect of that supply shall be included in determining the net tax of the registrant.

Non-application of special rules

(9) If a registrant is deemed under paragraph (2)(

b) to have received or made at any time a supply in a province of a service in respect of a returnable container of a particular class containing a particular beverage, paragraph (8)(

a) or ( b ), as the case may be, does not apply in respect of the supply if

(

a) the usual business practice of the registrant at that time is to charge, when making supplies in the province of the particular beverage contained in returnable containers of that class, a returnable container charge that is not equal to the returnable container charge that the registrant pays in respect of returnable containers of that class containing the particular beverage when supplies of the beverage are made to the registrant in the province; or

(

b) the registrant is a specified beverage retailer in respect of the container and elects under subsection (3) not to deduct the amount of the returnable container charge charged by the registrant in determining the consideration for the supply by the registrant of the particular beverage in the returnable container.

Change in practice — beginning to apply special rules

(10) If, after changing their usual business practice with respect to supplies of a particular beverage in returnable containers of a particular class from the practice described in subsection (9), a registrant makes, at a particular time, in a province in which

an Act prescribed for the purposes of paragraph (2)(

b) applies, a supply of the particular beverage in a returnable container of that class in circumstances in which the registrant is deemed under that paragraph to have made a supply of a service in respect of the container and that supply of the beverage is the first supply by the registrant of the particular beverage in a returnable container of that class in respect of which paragraph (8)(

b) applies since the change in practice, the registrant is deemed, for the purposes of this Part,

(

a) to have made, at the particular time, a taxable supply of a service in respect of each filled and sealed returnable container of that class containing the particular beverage

(

i) that was, immediately before the particular time, held by the registrant for the purpose of making a taxable supply of the particular beverage in the province in circumstances in which the registrant would be deemed under paragraph (2)(

b) to have made a supply of a service in respect of the container, and

(ii)

that was last supplied to the registrant in the province in circumstances in which the registrant was deemed under that paragraph to have received a supply of a service in respect of which the registrant was entitled to claim an input tax credit or would have been so entitled if tax would, in the absence of

section 156 or 167, have been payable in respect of that supply of the service; and

(

b) to have collected, at the particular time, tax in respect of each supply of a service in respect of a returnable container that is deemed under paragraph (

a) to have been made by the registrant equal to the tax that was payable or would, in the absence of

section 156 or 167, have been payable by the registrant in respect of the supply to the registrant of the service referred to in subparagraph ( a )(ii) in respect of that container.

Change in practice — ceasing to apply special rules

(11) If, after changing their usual business practice with respect to supplies of a particular beverage in returnable containers of a particular class to the practice described in subsection (9), a registrant makes, at a particular time, in a province in which

an Act prescribed for the purposes of paragraph (2)(

b) applies, a supply of the particular beverage in a returnable container of that class in circumstances in which the registrant is deemed under that paragraph to have made a supply of a service in respect of the container and the supply is the first supply by the registrant of the particular beverage in a returnable container of that class in respect of which paragraph (8)(

b) would have applied but for the change in practice, the registrant is deemed, for the purposes of this Part,

(

a) to have received, at the particular time, for use exclusively in a commercial activity of the registrant, a taxable supply of a service in respect of each filled and sealed returnable container of that class containing the particular beverage

(

i) that was, immediately before the particular time, held by the registrant for the purpose of making a taxable supply of the particular beverage in the province in circumstances in which the registrant would be deemed under paragraph (2)(

b) to have made a supply of a service in respect of the container, and

(ii)

that was last supplied to the registrant in the province in circumstances in which the registrant was deemed under that paragraph to have received a supply of a service in respect of which, owing solely to paragraph (8)( a ), the registrant was not entitled to claim an input tax credit or would not have been so entitled if tax would, in the absence of

section 156 or 167, have been payable in respect of that supply of the service; and

(

b) to have paid, at the particular time, tax in respect of each supply of a service in respect of a returnable container that is deemed under paragraph (

a) to have been received by the registrant equal to the tax that was or would, in the absence of

section 156 or 167, have been payable by the registrant in respect of the supply to the registrant of the service referred to in subparagraph ( a )(ii) in respect of that container.

Ceasing to be registrant while special rules apply

(12) If a person who makes supplies of a particular beverage in filled and sealed returnable containers of a particular class in a province in which

an Act prescribed for the purposes of paragraph (2)(

b) applies ceases at any time to be a registrant, the person is deemed, for the purposes of this Part,

(

a) to have received, immediately before that time, a supply of a service in respect of each filled and sealed returnable container of that class containing the particular beverage that was held by the person immediately before that time and in respect of which paragraph (8)(

b) would have applied if the particular beverage in the container had been supplied by the person immediately before that time in circumstances in which the person would have been deemed under paragraph (2)(

b) to have made a supply of a service in respect of the container; and

(

b) to have paid, immediately before that time, tax in respect of each supply of a service in respect of a returnable container that is deemed under paragraph (

a) to have been received by the person equal to the tax that was payable or would, in the absence of

section 156 or 167, have been payable by the person in respect of the supply to the person of the service that was deemed under paragraph (2)(

b) to have been made to the person when the person acquired the partic­ular beverage.

Supplies under s. 167

(13) For the purposes of this Part, if a registrant makes a taxable supply of a beverage in a filled and sealed returnable container under an agreement for the supply of a business or part of a business in circumstances in which subsection 167(1.1) applies to the supply and the registrant is deemed under subsection (2) to have made a supply of a service in respect of the container, the supply of the service is deemed to have been made under the agreement and not to be a service referred to in subparagraph 167(1.1)( a )(i).

Deemed tax collected where s. 156 or 167 applies

(14) For the purposes of this Part, if

(

a) a supplier makes a supply in a province of a beverage in a filled and sealed returnable container to a registrant and is deemed under paragraph (2)(

b) to have made at any time a supply to the registrant of a service in respect of the container,

(

b) because of

section 156 or 167, no tax is payable in respect of the supplies to the registrant of the beverage and of the service,

(

c) by reason only of paragraph (8)( a ), the registrant would not have been entitled to claim an input tax credit in respect of the tax that would, in the absence of

section 156 or 167, have been payable in respect of the supply of the service, and

( d )

paragraph (8)(

b) does not apply in respect of the supplies to the registrant of the beverage and the service in determining the net tax of the supplier,

the registrant is deemed to have made, at that time, a particular taxable supply in the province of a service in respect of the container for consideration equal to the amount that would, without reference to

section 156, be the value of the consideration for the supply of the service that is deemed under paragraph (2)(

b) to have been made to the registrant in respect of the container and the registrant is deemed to have collected at that time tax in respect of the particular supply calculated on that consideration.

Deemed tax paid where s. 156 or 167 applies

(15) For the purposes of this Part, if

(

a) a supplier makes a supply in a province of a beverage in a filled and sealed returnable container to a registrant and is deemed under paragraph (2)(

b) to have made at any time a supply to the registrant of a service in respect of the container,

(

b) because of

section 156 or 167, no tax is payable in respect of the supplies to the registrant of the beverage and of the service,

( c )

paragraph (8)(

a) would not have applied to the registrant in respect of the tax that would, in the absence of

section 156 or 167, have been payable in respect of the supply of the service, and

( d )

paragraph (8)(

b) applies in respect of the supplies by the supplier to the registrant of the beverage and the service in determining the net tax of the supplier,

the registrant is deemed to have received, at that time, a particular taxable supply in the province of a service in respect of the container for consideration equal to the amount that would, without reference to

section 156, be the value of the consideration for the supply of the service that is deemed under paragraph (2)(

b) to have been made to the registrant in respect of the container, the registrant is deemed to have paid, at that time, tax in respect of the particular supply calculated on that consideration and the registrant is deemed to have acquired that service for the same purpose as that for which the registrant acquired the beverage.

Fair market value of beverage in filled and sealed container

(16) For the purposes of this Part, if a beverage in a filled and sealed returnable container in respect of which there is a returnable container charge is held at any time by a person for consumption, use or supply in a province in the course of commercial activities of the person, the fair market value of the beverage at that time is deemed not to include the amount that would be determined as the refund for the container if the beverage were supplied in the province by the person at that time in the filled and sealed container.

Basic tax content of beverage in filled and sealed container

(17) The basic tax content at any time of a beverage in a filled and sealed returnable container that is held at that time by a person shall be determined as if the tax payable, if any, in respect of the last supply of a service in respect of the container that was deemed under subsection (2) or (15) to have been made to the person, and the tax payable, if any, in respect of the last supply of a service in respect of the container that was deemed under subsection (14) to have been made by the person, were additional tax payable by the person in respect of the last acquisition of the beverage by the person.

Addition to net tax

(18) (

a) a registrant makes a supply in a province of a beverage in a returnable container of a particular class in respect of which the registrant is a specified beverage retailer,

( b )

paragraph (2)(

a) applies in determining, for the purposes of this Part, the consideration for the supply, and

(

c) the registrant makes at any time a supply in the province of that container used and empty for consideration without having acquired it used and empty for consideration,

the registrant shall, in determining the net tax of the registrant for the reporting period that includes that time, add the amount determined by the formula

A × B where A

(

i) if the province is a participating province, the total of the rate of tax under subsection 165(1) and the tax rate for the province, and

(ii)

in any other case, the rate of tax under subsection 165(1); and

is the refund for a returnable container of that class in the province.

(3) Subsection (1) applies to any supply of a beverage in a returnable container made after 1995 and before May 2002, unless

(

a) the supplier included, in determining their net tax, a particular amount as or on account of tax that was calculated on the total amount (excluding any tax prescribed for the purposes of

section 154 of the Act or any gratuity) paid or payable by the recipient in respect of the beverage and the container and, before February 8, 2002, the Minister of National Revenue received an application for a rebate under subsection 261(1) of the Act of the portion of the particular amount attributed to the container; or

(

b) the supplier included, in determining their net tax as reported in a return under Division V of

Part IX of the Act received by the Minister of National Revenue before February 8, 2002, an amount as or on account of tax in respect of the supply of the beverage and the container that was calculated on an amount less than the total amount (excluding any tax prescribed for the purposes of

section 154 of the Act or any gratuity) paid or payable by the recipient in respect of the beverage and the container.

(4) Subsection (2) is deemed to have come into force on May 1, 2002 and applies to supplies for which consideration becomes due on or after that day or is paid on or after that day without having become due, except that

(

a) for the purposes of applying sections 176 and 226.1 of the Act to supplies of returnable containers for which consideration becomes due on or before July 15, 2002 or is paid on or before that day without having become due,

section 226 of the Act shall be read as if subsection (2) had not come into force; and

( b )

subsections 226(4), (6) and (7) of the Act, as enacted by subsection (2), do not apply to supplies for which consideration (determined without reference to those subsections) is paid or becomes due on or before July 15, 2002.

(1) The Act is amended by adding the following after

section 226:

Non-application of exemption

226.01

Section 5.1 of

Part V.1 of

Schedule V and

section 6 of

Part VI of that

Schedule do not apply to a supply of a used and empty returnable container (as defined in

section 226) or to a supply of the material resulting from its compaction.

(2) Section 226.01 of the Act, as enacted by subsection (1), is repealed.

(3) Subsection (1) applies to supplies for which consideration becomes due after 1996 or is paid after 1996 without having become due.

(4) Subsection (2) applies to supplies for which consideration becomes due after July 15, 2002 or is paid after that day without having become due.

2000, c. 30, s. 55(1)

(1) The portion of subsection 226.1(1) of the French version of the Act before paragraph (

a) is replaced by the following:

Déduction pour organisme de bienfaisance

226.1

(1) Un organisme de bienfaisance peut déduire un montant dans le calcul de sa taxe nette pour sa période de déclaration au cours de laquelle la fourniture donnée visée à l’alinéa a ) est effectuée ou pour une période de déclaration postérieure si les conditions suivantes sont réunies :

2000, c. 30, s. 55(1)

(2) The portion of subsection 226.1(1) of the English version of the Act after paragraph (

e) and before the formula is replaced by the following:

the charity may, in determining the net tax for its reporting period in which the particular supply is made or for a subsequent reporting period, deduct the amount determined by the formula

2000, c. 30, s. 55(1)

(3) Section 226.1 of the Act, as amended by subsections (1) and (2), is repealed.

(4) Subsections (1) and (2) apply to any supply of a container made to a charity after March 1998.

(5) Subsection (3) applies to supplies for which consideration becomes due after July 15, 2002 or is paid after that day without having become due.

1997, c. 10, s. 50(1)

(1) Subsection 231(1) of the Act is replaced by the following:

Bad debt — deduction from net tax

(1) If a supplier has made a taxable supply (other than a zero-rated supply) for consideration to a recipient with whom the supplier was dealing at arm’s length, it is established that all or a part of the total of the consideration and tax payable in respect of the supply has become a bad debt and the supplier at any time writes off the bad debt in the supplier’s books of account, the reporting entity for the supply may, in determining the reporting entity’s net tax for the reporting period that includes that time or for a subsequent reporting period, deduct the amount determined by the formula

A × B/C where A

is the tax in respect of the supply;

is the total of the consideration, tax and applicable provincial tax remaining unpaid in respect of the supply that was written off at that time as a bad debt; and

is the total of the consideration, tax and applicable provincial tax in respect of the supply.

Reporting and remittance conditions

(1.1) A reporting entity is not entitled to deduct an amount under subsection (1) in respect of a supply unless

(

a) the tax collectible in respect of the supply is included in determining the amount of net tax reported in the reporting entity’s return under this Division for the reporting period in which the tax became collectible; and

(

b) all net tax remittable, if any, as reported in that return is remitted.

1997, c. 10, s. 50(1); 2000, c. 30, ss. 58(2) and (3)

(2) Subsections 231(3) and (4) of the Act are replaced by the following:

Recovery of bad debt

(3) If all or part of a bad debt in respect of which a person has made a deduction under this

section is recovered at any time, the person shall, in determining the person’s net tax for the reporting period that includes that time, add the amount determined by the formula

A × B/C where A

is the amount of the bad debt recovered at that time;

is the tax in respect of the supply to which the bad debt relates; and

is the total of the consideration, tax and applicable provincial tax in respect of the supply.

Limitation period

(4) A person may not claim a deduction under this

section in respect of a bad debt relating to a supply unless the deduction is claimed in a return under this Division filed within four years after the day on or before which a return of the person was required to be filed for the reporting period in which the supplier has written off the bad debt in its books of account.

Definitions

(5) The following

definitions apply in this section.

applicable provincial tax

taxe provinciale applicable

applicable provincial tax , in respect of a supply, means any amount that can reasonably be attributed to a tax, duty or fee imposed under

an Act of the legislature of a province in respect of the supply that is a prescribed tax, duty or fee for the purposes of

section 154.

reporting entity

déclarant

reporting entity for a supply means

(

a) if an election has been made under subsection 177(1.1) in respect of the supply, the person who is required, under that subsection, to include the tax collectible in respect of the supply in determining the person’s net tax; and

(

b) in any other case, the supplier.

(3) Subsection (1) applies to supplies made after April 23, 1996.

(4) Subsections 231(3) and (4) of the Act, as enacted by subsection (2), apply to bad debts relating to supplies made after April 23, 1996 except that the reference to “supplier” in subsection 231(4) of the Act, as enacted by subsection (2), shall be read as a reference to “person” in its application to a deduction claimed by a person under subsection 231(2) of the Act as that subsection read in relation to an account receivable transferred to the person before 2000.

(5) Subsection 231(5) of the Act, as enacted by subsection (2), is deemed to have come into force on April 24, 1996.

(6) Despite subsection 231(4) of the Act, as enacted by subsection (2), if a supplier and a registrant acting as an agent of the supplier have jointly made an election under subsection 177(1.1) of the Act in respect of a supply made before December 20, 2002 and the supplier wrote off a bad debt relating to the supply in the supplier’s books of account at any time before December 21, 2002, the registrant may claim a deduction under subsection 231(1) of the Act, as enacted by subsection (1), in respect of the bad debt written off at that time in a return of the registrant under Division V of

Part IX of the Act that is filed with the Minister of National Revenue on or before the later of the day that is one year after December 20, 2002 and the day that is four years after the day on or before which the registrant’s return under that Division for the registrant’s reporting period in which the bad debt was written off is required to be filed.

2000, c. 30, s. 63(2)

(1) The portion of subsection 235(1) of the Act before the formula is replaced by the following:

Net tax where passenger vehicle leased

(1) If, in a taxation year of a registrant, tax becomes payable, or is paid without having become payable, by the registrant in respect of supplies of a passenger vehicle made under a lease and

(

a) the total of the consideration for the supplies that would be deductible in computing the registrant’s income for the year for the purposes of the Income Tax Act , if the registrant were a taxpayer under that Act and that Act were read without reference to

section 67.3,

exceeds

(

b) the amount in respect of that consideration that would be deductible in computing the registrant’s income for the year for the purposes of the Income Tax Act , if the registrant were a taxpayer under that Act and the formulae in paragraphs 7307(1)(

b) and (3)(

b) of the Income Tax Regulations were read without reference to the description of B,

there shall be added in determining the net tax for the appropriate reporting period of the registrant an amount determined by the formula

(2) Subsection (1) applies in respect of reporting periods that end after November 27, 2006 and in respect of any reporting period that ends on or before that day unless

(

a) an amount was added pursuant to

section 235 of the Act in determining the net tax for the reporting period;

(

b) the amount was determined on the basis that the capital cost of the passenger vehicle for the purposes of the Income Tax Act included federal and provincial sales taxes; and

(

c) the return for the reporting period was filed under Division V of

Part IX of the Act on or before that day.

(1) Subsection 240(3) of the Act is amended by striking out the word “or” at the end of paragraph ( c ), by adding the word “or” at the end of paragraph (

d) and by adding the following after paragraph ( d ):

(

e) is the recipient of a qualifying supply (as defined in subsection 167.11(1)), or of a supply that would be a qualifying supply if the recipient were a registrant, and the recipient files an election referred to in subsection 167.11(2) with the Minister in respect of the qualifying supply before the particular day that is referred to in paragraph 167.11(7)( a ).

(2) Subsection 240(3) of the Act is amended by striking out the word “or” at the end of paragraph ( d ), by adding the word “or” at the end of paragraph ( e ), as enacted by subsection (1), and by adding the following after paragraph ( e ):

(

f) a corporation that would be a temporary member, as defined in subsection 156(1), in the absence of paragraph (

a) of that definition.

(3) Subsection (1) is deemed to have come into force on June 28, 1999.

(4) Subsection (2) is deemed to have come into force on November 17, 2005.

1997, c. 10, s. 59(2)

(1) The portion of subsection 252.1(2) of the French version of the Act after paragraph (

a) is replaced by the following:

b) le logement, l’emplacement ou le voyage est acquis par la personne à une fin autre que sa fourniture dans le cours normal de toute entreprise de la personne qui consiste à effectuer de telles fournitures;

c) le logement ou l’emplacement est mis à la disposition d’un particulier non-résident.

Le montant remboursable est égal à la taxe payée par la personne relativement au logement ou à l’emplacement.

1993, c. 27, s. 107(1); 1997, c. 10, s. 59(3)

(2) The portion of subsection 252.1(3) of the French version of the Act after paragraph (

a) is replaced by the following:

b) le logement, l’emplacement ou le voyage est acquis par la personne pour fourniture dans le cours normal de son entreprise qui consiste à effectuer de telles fournitures;

c) le logement, l’emplacement ou le voyage est fourni à une autre personne non-résidente, et la contrepartie de cette fourniture est versée à l’étranger, là où le fournisseur, ou son mandataire, mène ses affaires;

d) le logement ou l’emplacement est mis à la disposition d’un particulier non-résident.

Le montant remboursable est égal à la taxe payée par la personne relativement au logement ou à l’emplacement.

1993, c. 27, s. 107(1); 2000, c. 30, ss. 68(11) and (12)

(3) The portion of subsection 252.1(8) of the French version of the Act after paragraph (

a) is replaced by the following:

b) l’inscrit verse à l’acquéreur, ou porte à son crédit, un montant au

titre d’un remboursement, prévu aux paragraphes (2) ou (3), qui pourrait être versé à l’acquéreur relativement au logement ou à l’emplacement s’il payait la taxe afférente et remplissait les conditions énoncées à l’article 252.2;

c) le montant versé à la personne, ou porté à son crédit, est égal au montant suivant :

(

i) dans le cas d’une fourniture de voyage organisé, le montant qui serait calculé selon l’alinéa

(5) b) relativement à la fourniture,

(ii)

dans le cas d’une fourniture de logement provisoire, ou d’emplacement de camping, non compris dans un voyage organisé, la taxe payée par l’acquéreur relativement à la fourniture;

d) dans le cas d’un remboursement prévu au paragraphe (2) :

(

i) soit la contrepartie de la fourniture est versée à l’étranger, là où l’inscrit, ou son mandataire, mène ses affaires,

(ii)

soit, si le logement ou l’emplacement est fourni dans le cadre d’un voyage organisé qui comprend des biens ou des services autres que les repas, les biens ou les services livrés ou rendus par la personne qui le fournit et relativement au logement ou à l’emplacement, un acompte d’au moins 20 % de la contrepartie du voyage organisé est versé :

(

A) par l’