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

Act current to 2017-09-27 and last amended on 2017-07-01. Previous Versions

Marginal note:Carrying on construction
  •  (1) In this section, a reference to a particular person carrying on construction includes a reference to the particular person engaging another person, by way of acquiring services from the other person, to carry on construction for the particular person.

  • Marginal note:Performance bonds

    (2) If a person (in this subsection referred to as the “surety”) acting as a surety under a performance bond in respect of a contract for a particular taxable supply of construction services relating to real property situated in Canada carries on the particular construction that is undertaken in full or partial satisfaction of the surety’s obligations under the bond,

    • (a) for the purposes of this Part, other than those described in paragraph (b), if the surety is entitled to receive at any time from the obligee, by reason of carrying on the particular construction, an amount (in this subsection referred to as a “contract payment”) that is not an amount the tax in respect of which was or will be required to be included in determining the net tax of the principal under the bond and is not an amount paid or payable as or on account of either tax under this Part or a tax, duty or fee payable by the obligee that is prescribed for the purposes of section 154,

      • (i) in carrying on the particular construction, the surety is deemed to be making, at the place where the particular supply was made, a taxable supply,

      • (ii) sections 150, 156 and 166 do not apply to that supply, and

      • (iii) the contract payment is deemed to be consideration for that supply;

    • (b) for the purposes of determining the extent to which property or a service is acquired, imported or brought into a participating province by the surety for consumption, use or supply in the course of commercial activities and the extent to which the property or service is consumed, used or supplied by the surety in the course of commercial activities, the carrying on of the particular construction is deemed not to be for the purpose of making a taxable supply and not to be a commercial activity of the surety;

    • (c) despite paragraph (b), if paragraph (a) deems a surety to be making a taxable supply, any property or service (each of which is, in this section, referred to as a “direct input”) that the surety acquires, imports or brings into a participating province for consumption, use or supply exclusively and directly in the course of carrying on the particular construction and not for use as capital property of the surety or in improving capital property of the surety is deemed, for the purposes of this Part other than sections 155 and 156 and Divisions IV and IV.1, to have been acquired, imported or brought in by the surety for consumption, use or supply exclusively in the course of commercial activities of the surety; and

    • (d) the total amount of all input tax credits in respect of direct inputs that the surety is entitled to claim is equal to the lesser of that total determined without reference to this paragraph and

      • (i) if

        • (A) the amount determined by the formula

          A × B

          where

          A
          is
          • (I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for the participating province, and

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

          B
          is the total of all contract payments (other than contract payments that are not in respect of the particular construction)

        exceeds

        • (B) the total of all amounts, each of which would be an input tax credit of the surety in respect of a direct input but for the fact that tax is not payable by the surety in respect of the acquisition, importation or bringing into a participating province of the direct input because of section 150 or 167 or because of the fact that the surety is deemed to have acquired or imported it, or brought it in, for consumption, use or supply exclusively in the course of commercial activities,

        that excess, and

      • (ii) in any other case, zero.

  • Marginal note:Determining credit for construction inputs

    (3) If a person acquires, imports or brings into a participating province property or a service for consumption, use or supply exclusively and directly in the course of carrying on construction that includes the particular construction that is undertaken in full or partial satisfaction of the person’s obligations as a surety under a performance bond and other construction, for the purposes of this section and of determining an input tax credit of the person and the total amount of all input tax credits of the person in respect of direct inputs that the person is entitled to claim,

    • (a) despite section 138, that part (in this subsection referred to as the “particular construction input”) of the property or service that is for consumption, use or supply in the course of carrying on the particular construction and the remaining part (in this subsection referred to as the “additional construction input”) of the property or service are each deemed to be a separate property or service that does not form part of the other;

    • (b) the particular construction input is deemed to have been acquired, imported or brought in, as the case may be, exclusively and directly for use in the course of carrying on the particular construction;

    • (c) the additional construction input is deemed not to have been acquired, imported or brought in, as the case may be, for consumption, use or supply in the course of carrying on the particular construction;

    • (d) the tax payable in respect of the supply, importation or bringing in, as the case may be, of the particular construction input is deemed to be equal to the amount determined by the formula

      A × B

      where

      A
      is the tax payable (in this subsection referred to as the “total tax payable”) by the person in respect of the supply, importation or bringing in, as the case may be, of the property or service, determined without reference to this subsection, and
      B
      is the extent (expressed as a percentage) to which the property or service was acquired, imported or brought in, as the case may be, for consumption, use or supply in the course of carrying on the particular construction; and
    • (e) the tax payable in respect of the additional construction input is deemed to be equal to the difference between the total tax payable and the amount determined under paragraph (d).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2000, c. 30, s. 37;
  • 2006, c. 4, s. 12.

Property and Services for Financial Services

Marginal note:Financial services – input tax credits
  •  (1) If tax in respect of property or a service acquired, imported or brought into a participating province by a registrant becomes payable by the registrant at a time when the registrant is neither a listed financial institution nor a person that is a financial institution because of paragraph 149(1)(b), for the purpose of determining an input tax credit of the registrant in respect of the property or service and for the purposes of Subdivision d, to the extent (determined in accordance with subsections 141.01(2) and 141.02(6)) that the property or service was acquired, imported or brought into the province, as the case may be, for consumption, use or supply in the course of making supplies of financial services that relate to commercial activities of the registrant,

    • (a) if the registrant is a financial institution because of paragraph 149(1)(c), the property or service is deemed, despite subsections 141.01(2) and 141.02(6), to have been so acquired, imported or brought into the province for consumption, use or supply in the course of those commercial activities except to the extent that the property or service was so acquired, imported or brought into the province for consumption, use or supply in the course of activities of the registrant that relate to

      • (i) credit cards or charge cards issued by the registrant, or

      • (ii) the making of any advance, the lending of money or the granting of any credit; and

    • (b) in any other case, the property or service is deemed, despite subsections 141.01(2) and 141.02(6), to have been so acquired, imported or brought into the province for consumption, use or supply in the course of those commercial activities.

  • Marginal note:Financial service relating to commercial activity

    (2) For the purposes of subsection (1), financial services shall be deemed not to be related to commercial activities of an individual, except to the extent that the revenues and expenses relating to the services are taken into account in determining the individual’s income from a business for the purposes of the Income Tax Act.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1990, c. 45, s. 12;
  • 1994, c. 9, s. 11;
  • 1997, c. 10, ss. 35, 179;
  • 2010, c. 12, s. 60.
Marginal note:Related corporations
  •  (1) Where

    • (a) a registrant (in this subsection referred to as the “parent”) that is a corporation resident in Canada at any time acquires, imports or brings into a participating province particular property or a service that can reasonably be regarded as having been so acquired, imported or brought into the province for consumption or use in relation to shares of the capital stock, or indebtedness, of another corporation that is at that time related to the parent, and

    • (b) at the time that tax in respect of the acquisition, importation or bringing in becomes payable, or is paid without having become payable, by the parent, all or substantially all of the property of the other corporation is property that was last acquired or imported by the other corporation for consumption, use or supply by the other corporation exclusively in the course of its commercial activities,

    except where subsection (2) applies, for the purpose of determining an input tax credit of the parent, the parent is deemed to have acquired or imported the particular property or service or brought it into the participating province, as the case may be, for use in the course of commercial activities of the parent to the extent that the parent can reasonably be regarded as having so acquired or imported the particular property or service, or as having so brought it into the province, for consumption or use in relation to the shares or indebtedness.

  • Marginal note:Takeover fees

    (2) For the purposes of this Part, if

    • (a) a registrant that is a corporation resident in Canada (in this subsection referred to as the “purchaser”) acquires, imports or brings into a participating province a particular property or service relating to the acquisition or proposed acquisition by it of all or substantially all of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of another corporation, and

    • (b) throughout the period beginning when the performance of the particular service began or when the purchaser acquired, imported or brought into the participating province, as the case may be, the particular property and ending at the later of the times referred to in paragraph (c), all or substantially all of the property of the other corporation was property that was acquired or imported for consumption, use or supply exclusively in the course of commercial activities,

    the particular property or service is deemed to have been acquired, imported or brought into the participating province for use exclusively in the course of commercial activities of the purchaser and, for the purpose of claiming an input tax credit, any tax in respect of the supply of the particular property or service to the purchaser, or the importation or bringing in of the particular property by the purchaser, is deemed to have become payable and been paid by the purchaser on the later of

    • (c) the later of the day the purchaser acquired all or substantially all of the shares and the day the intention to acquire the shares was abandoned, and

    • (d) the day the tax became payable or was paid by the purchaser.

  • Marginal note:Shares, etc., held by corporation

    (3) Where at any time all or substantially all of the property of a particular corporation is property that was acquired or imported by it for consumption, use or supply exclusively in the course of its commercial activities, all shares of the capital stock of the particular corporation owned by, and all indebtedness of the particular corporation owed to, any other corporation that is related to the particular corporation shall, for the purposes of this section, be deemed to be, at that time, property that was acquired by the other corporation for use exclusively in the course of its commercial activities.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1990, c. 45, s. 12;
  • 1993, c. 27, s. 49;
  • 1997, c. 10, s. 180;
  • 2000, c. 30, s. 38.
 
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