Excise Tax Act (R.S.C., 1985, c. E-15)

Act current to 2017-07-03 and last amended on 2017-07-01. Previous Versions

Marginal note:Rate change — variation of agreement

 If

  • (a) at any time before July 1, 2006, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

  • (b) the supplier and the recipient at a later time either directly or indirectly

    • (i) vary or alter the agreement for the supply, or

    • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

  • (c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

  • (d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 7% on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

  • (e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 6% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 7%, and

  • (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

  • (g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate of 7% on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2006, c. 4, s. 32.
Marginal note:Variation of agreement — 2008 rate reduction

 If

  • (a) at any time before January 1, 2008, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

  • (b) the supplier and the recipient at a later time either directly or indirectly

    • (i) vary or alter the agreement for the supply, or

    • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

  • (c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

  • (d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 6% or 7%, as the case may be, on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

  • (e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 5% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 6% or 7%, as the case may be, and

  • (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

  • (g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate at which tax would have been calculated under paragraph (d) on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2007, c. 35, s. 195.
Marginal note:Definitions
  •  (1) The following definitions apply in this section.

    person

    personne

    person does not include a consumer. (personne)

    rate change

    modification de taux

    rate change means any change in any rate of tax imposed under this Part. (modification de taux)

    tax benefit

    avantage fiscal

    tax benefit means a reduction, an avoidance or a deferral of tax or other amount payable under this Part or an increase in a refund or rebate of tax or other amount under this Part. (avantage fiscal)

    transaction

    opération

    transaction has the meaning assigned by subsection 274(1). (opération)

  • Marginal note:Rate change — transactions

    (2) If

    • (a) a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made,

    • (b) the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and

    • (c) it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from a rate change, for one or more of the persons involved in the transaction or series of transactions,

    the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under this Part, or any other amount that is relevant for the purposes of computing that amount shall be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons.

  • Marginal note:Denying tax benefit on transactions

    (3) Despite any other provision of this Part, a tax benefit shall only be denied under subsection (2) through an assessment, reassessment or additional assessment.

  • Marginal note:Request for adjustments

    (4) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day on which the notice was sent, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

  • Marginal note:Duties of Minister

    (5) On receipt of a request by a person under subsection (4), the Minister shall, with all due dispatch, consider the request and, despite subsections 298(1) and (2), assess, reassess or make an additional assessment with respect to the person, except that an assessment, a reassessment or an additional assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2006, c. 4, s. 32;
  • 2010, c. 25, s. 137.

DIVISION VIIIAdministration and Enforcement

SUBDIVISION AAdministration

Marginal note:Minister’s duty
  •  (1) The Minister shall administer and enforce this Part and the Commissioner may exercise all the powers and perform the duties of the Minister under this Part.

  • Marginal note:Officers and employees

    (2) Such officers, agents and employees as are necessary to administer and enforce this Part shall be appointed or employed in the manner authorized by law.

  • Marginal note:Delegation of powers

    (3) The Minister may authorize a designated officer or agent or a class of officers or agents to exercise powers or perform duties of the Minister under this Part.

  • Marginal note:Administration of oaths

    (4) Any officer or employee employed in connection with the administration or enforcement of this Part, if designated by the Minister for the purpose, may administer oaths and take and receive affidavits, declarations and affirmations for the purposes of or incidental to the administration or enforcement of this Part or regulations made under this Part, and every officer or employee so designated has for those purposes all the powers of a commissioner for administering oaths or taking affidavits.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1990, c. 45, s. 12;
  • 1994, c. 9, s. 19(F);
  • 1999, c. 17, s. 153.
 
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