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

Act current to 2017-10-13 and last amended on 2017-07-01. Previous Versions

Marginal note:Election for exempt supplies
  •  (1) For the purposes of this Part, where at any time a person who is a member of a closely related group of which a listed financial institution is a member files an election made jointly by the person and a corporation that is also a member of the group at that time, every supply between the person and the corporation of property by way of lease, licence or similar arrangement or of a service that is made at a time when the election is in effect and that would, but for this subsection, be a taxable supply is deemed to be a supply of a financial service.

  • Marginal note: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.

  • Marginal note: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. (services exonérés)

    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. (tiers non lié)

  • Marginal note:Form and manner of filing

    (3) An election under subsection (1) relating to supplies between a member of a closely related group and a corporation shall

    • (a) be made in prescribed form containing prescribed information;

    • (b) specify the day the election is to become effective; and

    • (c) be filed by the member with the Minister in prescribed manner on or before the day on or before which a return under Division V for the reporting period of the member in which the election is to become effective is required to be filed.

  • Marginal note:Effect of election

    (4) An election under subsection (1) shall be effective for the period beginning on the day specified in the election and ending on the earliest of

    • (a) the day either member ceases to be a member of the closely related group,

    • (b) the first day the closely related group does not include a listed financial institution (other than a person that is a financial institution only by reason of section 151), and

    • (c) a day that the members specify in a notice of revocation in prescribed form containing prescribed information filed jointly by the members with the Minister in prescribed manner, which day is at least three hundred and sixty-five days after the day specified in the election.

  • Marginal note:Subsequent elections

    (5) Where an election made under subsection (1) jointly by a member of a closely related group and a corporation ceases to be effective, the member and the corporation shall not thereafter make an election jointly under subsection (1) without the written concurrence of the Minister.

  • Marginal note:Credit unions deemed to have elected

    (6) For the purposes of this Part,

    • (a) every credit union shall be deemed to be at all times a member of a closely related group of which every other credit union is a member;

    • (b) every credit union shall be deemed to have made an election under subsection (1) with every other credit union that is in effect at all times; and

    • (c) every supply of tangible personal property by a credit union, other than a capital property of the credit union, to another credit union shall be deemed to be a supply of a financial service.

    • (d) [Repealed, 1993, c. 27, s. 25]

  • Marginal note:Mutual insurance group — deemed election

    (7) For the purposes of this Part, every member of a mutual insurance group shall be deemed

    • (a) to be at all times a member of a closely related group of which every other member of the mutual insurance group is a member; and

    • (b) to have made, with every other member of the group, an election under subsection (1) that is in effect at all times.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1990, c. 45, s. 12;
  • 1993, c. 27, s. 25;
  • 1997, c. 10, s. 12;
  • 2007, c. 18, s. 5.
Marginal note:Effect of election under subsection 150(1)

 For the purposes of this Part, where a corporation that is a member of a closely related group has made an election under subsection 150(1), the corporation shall be deemed to be a financial institution throughout the period during which the election is in effect.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1990, c. 45, s. 12.

Consideration

Marginal note:When consideration due
  •  (1) For the purposes of this Part, the consideration, or a part thereof, for a taxable supply shall be deemed to become due on the earliest of

    • (a) the earlier of the day the supplier first issues an invoice in respect of the supply for that consideration or part and the date of that invoice,

    • (b) the day the supplier would have, but for an undue delay, issued an invoice in respect of the supply for that consideration or part, and

    • (c) the day the recipient is required to pay that consideration or part to the supplier pursuant to an agreement in writing.

  • Marginal note:Consideration under leases, etc.

    (2) Notwithstanding subsection (1), where property is supplied by way of lease, licence or similar arrangement under an agreement in writing, the consideration, or any part thereof, for the supply shall, for the purposes of this Part, be deemed to become due on the day the recipient is required to pay the consideration or part to the supplier pursuant to the agreement.

  • Marginal note:Payment

    (3) For the purposes of this Part, where consideration that is not money is given or required to be given, the consideration that is given or required to be given shall be deemed to be paid or required to be paid, as the case may be.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1990, c. 45, s. 12.
Marginal note:Value of consideration
  •  (1) Subject to this Division, the value of the consideration, or any part thereof, for a supply shall, for the purposes of this Part, be deemed to be equal to

    • (a) where the consideration or that part is expressed in money, the amount of the money; and

    • (b) where the consideration or that part is other than money, the fair market value of the consideration or that part at the time the supply was made.

  • Marginal note:Combined consideration

    (2) For the purposes of this Part, where

    • (a) consideration is paid for a supply and other consideration is paid for one or more other supplies or matters, and

    • (b) the consideration for one of the supplies or matters exceeds the consideration that would be reasonable if the other supply were not made or the other matter were not provided,

    the consideration for each of the supplies and matters shall be deemed to be that part of the total of all amounts, each of which is consideration for one of those supplies or matters, that may reasonably be attributed to each of those supplies and matters.

  • Marginal note:Barters between registrants

    (3) Where

    • (a) the consideration or a part of the consideration for a supply of property of a particular class or kind is property of that class or kind,

    • (b) both the supplier and the recipient are registrants, and

    • (c) the property is acquired by the recipient and the consideration or that part thereof is acquired by the supplier as inventory for use exclusively in commercial activities of the recipient or supplier, as the case may be,

    the value of the consideration or that part thereof shall be deemed to be nil.

  • Marginal note:Used tangible personal property trade-ins

    (4) Where, at the time a supplier makes a supply of tangible personal property to a recipient, the supplier accepts, in full or partial consideration for the supply, other property (in this subsection and subsection (5) referred to as the “trade-in”) that

    • (a) is used tangible personal property or a leasehold interest therein, and

    • (b) is acquired for consumption, use or supply in the course of a commercial activity of the supplier,

    and the recipient is not required to collect tax in respect of the supply of the trade-in, the value of the consideration for the supply made by the supplier is deemed, for the purposes of this Part, to be equal to the amount, if any, by which the value of the consideration for that supply (as otherwise determined under this Part) exceeds

    • (c) except where paragraph (d) applies, the amount credited to the recipient in respect of the trade-in, and

    • (d) where the supplier and the recipient are not dealing with each other at arm’s length at the time the supply is made and the amount credited to the recipient in respect of the trade-in exceeds the fair market value of the trade-in at the time ownership thereof is transferred to the supplier, that fair market value.

  • Marginal note:Sale-leaseback arrangements

    (4.1) For the purposes of this Part, if

    • (a) a person (in this subsection and subsections (4.2) to (4.5) referred to as the “lessee”) makes a supply by way of sale of tangible personal property to another person (in this subsection referred to as the “lessor”),

    • (b) the lessee is not required to collect tax in respect of that supply, and

    • (c) the lessor immediately makes a taxable supply by way of lease of the property to the lessee under an agreement (in this subsection and subsections (4.2) to (4.5) referred to as the “original leaseback agreement”),

    the value of the consideration for a supply of the property by way of lease that, at a particular time, becomes due or is paid without having become due under a particular agreement that is the original leaseback agreement or a subsequent lease in respect of that agreement is deemed to be equal to the amount determined by the formula

    A - B

    where

    A
    is the value of that consideration as otherwise determined under this Part, and
    B
    is the amount (in this subsection referred to as the “purchase credit”) that is equal to the least of
    • (i) the value of A,

    • (ii) the amount determined by the formula

      B1/B2

      where

      B1
      is the amount (in this subsection and subsection (4.5) referred to as the “unused total purchase credit”), if any, by which the consideration for the supply by way of sale exceeds the total of all amounts each of which is the purchase credit that was determined in calculating the amount deemed under this subsection to be the value of any consideration that, before the particular time, became due or was paid without having become due under the original leaseback agreement or a subsequent lease in respect of that agreement, and
      B2
      is the specified number of remaining lease payments under the particular agreement at the particular time, and
    • (iii) if there is no unused total purchase credit, zero.

  • Meaning of specified number of remaining lease payments

    (4.2) In subsection (4.1), the specified number of remaining lease payments, at a particular time, in respect of a particular agreement for the supply of property by way of lease that is an original leaseback agreement or a subsequent lease in respect of that agreement, is the amount determined by the formula

    A - B

    where

    A
    is the total number of payments that the lessee was obligated to make as consideration for the supplies of the property by way of lease under the particular agreement based on the terms of that agreement at the time it was entered into; and
    B
    is the total number of the payments referred to in the description of A that, before the particular time, became due or were paid by the lessee.
  • Meaning of subsequent lease

    (4.3) In subsections (4.1) to (4.5), subsequent lease, in respect of an original leaseback agreement for the supply by way of lease of property to a lessee, means

    • (a) an agreement for the supply by way of lease of the property that constitutes a new agreement between the lessee and an assignee of the rights and obligations of the person who is the supplier under the original leaseback agreement or under an agreement referred to in this paragraph or in paragraph (b); or

    • (b) an agreement for the supply of the property to the lessee by way of lease that succeeds, as a new agreement, either the original leaseback agreement or a particular agreement referred to in paragraph (a) or in this paragraph upon a renewal or variation of that original leaseback agreement or particular agreement.

  • Marginal note:Deemed subsequent lease

    (4.4) For the purposes of subsections (4.1), (4.2) and (4.5), if a supplier agrees, at any time, to renew, vary, terminate (otherwise than upon the exercise of an option to purchase) or assign a particular agreement for the supply of property to a lessee by way of lease that is an original leaseback agreement or a subsequent lease in respect of that agreement and the renewal, variation, termination or assignment does not constitute a novation of the particular agreement but has the effect of changing the number of payments that the lessee is obligated to make for supplies by way of lease of the property under the particular agreement,

    • (a) the supplier and lessee are deemed to have, at that time, entered into a subsequent lease in respect of the original leaseback agreement; and

    • (b) all supplies by way of lease for which consideration becomes due, or is paid without having become due, at or after the time the renewal, variation, termination or assignment takes effect that would, but for this subsection, be made under the particular agreement are deemed to be made under that subsequent lease and not under the particular agreement.

  • Marginal note:Exercise of option to purchase

    (4.5) For the purposes of this Part other than a purpose referred to in paragraph (5)(a), if

    • (a) a supply by way of sale of property is made to a lessee on the exercise by the lessee of an option to purchase the property provided for in an original leaseback agreement entered into by the lessee in respect of the property, or in a subsequent lease in respect of that agreement, to which subsection (4.1) applied, and

    • (b) immediately before the earliest time at which consideration for the supply becomes due or is paid without having become due, there is an unused total purchase credit in respect of the property,

    the following rules apply:

    • (c) the value of the consideration for the supply is deemed to be equal to the amount determined by the formula

      A - B

      where

      A
      is the value of that consideration as otherwise determined under this Part, and
      B
      is that unused total purchase credit, and
    • (d) subsection (4.1) does not apply to any consideration that, after that earliest time, becomes due or is paid without having become due for any supply by way of lease of the property that was made under the original leaseback agreement or under a subsequent lease in respect of that agreement.

  • Marginal note:Non-arm’s length supplies

    (4.6) For the purposes of subsection (4.1), if a person makes a supply by way of sale of property to a recipient with whom the person is not dealing at arm’s length and the consideration for the supply exceeds the fair market value of the property at the time ownership of the property is transferred to the recipient, the consideration for the supply is deemed to be equal to that fair market value.

  • Marginal note:Exception

    (5) Subsections (4) and (4.1) do not apply

    • (a) for the purpose of determining, for the purposes of any provision of this Part or any Schedule to this Act other than Schedules I to IV, whether the value of consideration for a supply of property equals, exceeds or is less than another amount specified in the provision;

    • (b) for the purposes of section 148 or 249; or

    • (c) if the supply of the trade-in, or the supply by way of sale referred to in paragraph (4.1)(a), as the case may be, is

      • (i) a zero-rated supply,

      • (ii) a supply made outside Canada, or

      • (iii) a supply in respect of which no tax is payable because of subsection 156(2) or paragraph 167(1.1)(a).

  • Marginal note:Exchange of natural gas liquids for make-up gas

    (6) For the purposes of this Part, if

    • (a) natural gas is transported by pipeline to a straddle plant at which natural gas liquids or ethane (each of which is, in this subsection, referred to as “natural gas liquids”) is recovered from the natural gas,

    • (b) the residue gas is returned to the pipeline after the recovery along with other natural gas (in this subsection referred to as “make-up gas”) that is supplied solely to make up for the loss of energy content due to the recovery, and

    • (c) the consideration or a part of the consideration for any supply of the natural gas liquids (or the right to recover the liquids) or any supply of the make-up gas is

      • (i) in the case of a supply of the natural gas liquids or the right to recover the liquids, the make-up gas, and

      • (ii) in the case of a supply of the make-up gas, the natural gas liquids or the right to recover the liquids,

    the value of that consideration or part, as the case may be, is deemed to be nil.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1990, c. 45, s. 12;
  • 1997, c. 10, s. 13;
  • 2000, c. 30, s. 23.
 
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