An Act to implement certain provisions of the budget tabled in Parliament on March 23, 2004 (S.C. 2004, c. 22)

Marginal note:2000, c. 30, s. 42(1)

• 33. (1) Subsection 200(3) of the Act is replaced by the following:

  • Marginal note:Sale of personal property

    (3) Despite paragraph 141.1(1)(a) but subject to section 141.2, for the purposes of this Part, if a registrant (other than a government) makes a supply by way of sale of personal property that is capital property of the registrant and, before the earlier of the time that ownership of the property is transferred to the recipient and the time that possession of the property is transferred to the recipient under the agreement for the supply, the registrant was last using the property otherwise than primarily in commercial activities of the registrant, the supply is deemed to have been made in the course of activities of the registrant that are not commercial activities.

• Marginal note:2000, c. 30, s. 42(1)

  (2) The portion of subsection 200(4) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Sale of personal property of a government

    (4) Despite subsection 141.1(1) but subject to section 141.2, for the purposes of this Part, if a supplier that is a government makes a supply by way of sale of particular personal property that is capital property of the supplier,

• (3) Subsections (1) and (2) apply to any supply for which consideration becomes due after March 9, 2004 or is paid after that day without having become due, but do not apply to any supply made under an agreement in writing entered into before March 10, 2004.

• 34. (1) The Act is amended by adding the following after section 200:

  Marginal note:Credit on sale of personal property of a municipality

  200.1 If a registrant is a municipality or a person designated to be a municipality for the purposes of section 259, subsection 193(2) applies, with any modifications that the circumstances require, to personal property (other than a passenger vehicle, an aircraft of a registrant who is an individual or a partnership and property of a person designated to be a municipality for the purposes of section 259 that is not designated municipal property of the person) acquired or imported by the registrant for use as capital property of the registrant as if the personal property were real property.

• (2) Subsection (1) applies to any supply for which consideration becomes due after March 9, 2004 or 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 March 10, 2004.

Marginal note:1997, c. 10, s. 191(1)

• 35. (1) The description of B in paragraph 201(b) of the Act is replaced by the following:

  B 

  is

  • (i) if the registrant is deemed under subsection 199(3) or 206(2) or (3) to have acquired the vehicle or a portion of it at the particular time, or the registrant is bringing the vehicle into a participating province at the particular time, and the registrant was previously entitled to claim a rebate under section 259 in respect of the vehicle or any improvement to it, the difference between 100% and the specified percentage (within the meaning of that section) that applied in determining the amount of that rebate, and

  • (ii) in any other case, 100%; and

• (2) Subsection (1) applies for the purpose of determining an input tax credit of a registrant in respect of a passenger vehicle that the registrant acquires, imports or brings into a participating province after January 2004.

Marginal note:1997, c. 10, s. 193(1)

• 36. (1) The portion of subsection 203(1) of the Act before the formula is replaced by the following:

  Marginal note:Sale of passenger vehicle

  • 203. (1) If a registrant (other than a municipality), at a particular time in a reporting period of the registrant, makes a taxable supply by way of sale of a passenger vehicle (other than a vehicle that is designated municipal property of a person designated at the particular time to be a municipality for the purposes of section 259) that, immediately before the particular time, was used as capital property in commercial activities of the registrant, the registrant may, despite section 170, paragraph 199(2)(a) and subsections 199(4) and 202(1), claim an input tax credit for that period equal to the amount determined by the formula

• Marginal note:1993, c. 27, s. 70(4)

  (2) Subsection 203(3) of the Act is replaced by the following:

  • Marginal note:Sale of passenger vehicle, etc.

    (3) Despite paragraph 141.1(1)(a), for the purposes of this Part, a supply shall be deemed not to be a taxable supply if

    • (a) an individual or a partnership (other than a municipality) who is a registrant makes, at a particular time, the supply by way of sale of a passenger vehicle or an aircraft (other than a vehicle or an aircraft that is designated municipal property of a person designated at the particular time to be a municipality for the purposes of section 259) that is capital property of the registrant; and

    • (b) at any time after the individual or partnership became a registrant and before the particular time, the registrant did not use the vehicle or aircraft exclusively in commercial activities of the registrant.

  • Marginal note:Sale of passenger vehicle by a municipality

    (4) If a registrant (other than an individual or a partnership) that is a municipality or a person designated to be a municipality for the purposes of section 259, at a particular time in a reporting period of the registrant, makes a taxable supply by way of sale of a passenger vehicle (other than a vehicle of a person designated to be a municipality for the purposes of section 259 that is not designated municipal property of the person) that, immediately before the particular time, was capital property of the registrant, the registrant may, despite section 170, paragraph 199(2)(a) and subsections 199(4) and 202(1), claim an input tax credit for that period equal to the lesser of

    • (a) the amount determined by the formula

      A x (B — C)/B

      where

      A 

      is the basic tax content of the vehicle at the particular time,

      B 

      is the total of

      • (i) the tax that was payable by the registrant in respect of the last acquisition or importation of the vehicle by the registrant,

      • (ii) if the registrant brought the vehicle into a participating province after it was last acquired or imported by the registrant, the tax that was payable by the registrant in respect of bringing it into that province, and

      • (iii) the tax that was payable by the registrant in respect of improvements to the vehicle acquired, imported or brought into a participating province by the registrant after the property was last acquired or imported, and

      C 

      is the total of all input tax credits that the registrant was entitled to claim in respect of any tax included in the total for B, and

    • (b) the tax that is or would, in the absence of section 167, be payable in respect of the taxable supply.

• (3) Subsections (1) and (2) apply to any supply for which consideration becomes due after March 9, 2004 or is paid after that day without having become due, but do not apply to any supply made under an agreement in writing entered into before March 10, 2004.

Marginal note:2000, c. 30, s. 43(1)

• 37. (1) Subsections 209(1) and (2) of the Act are replaced by the following:

  Marginal note:Real property of certain public service bodies

  • 209. (1) If a registrant (other than a financial institution or a government) is a public service body, section 141.2 and subsections 199(2) to (4) and 200(2) and (3) apply, with any modifications that the circumstances require, to real property acquired by the registrant for use as capital property of the registrant or, in the case of subsection 199(4), to improvements to real property that is capital property of the registrant, as if the real property were personal property.

  • Marginal note:Real property of certain Crown agents

    (2) If a registrant (other than a financial institution) is a specified Crown agent, section 141.2 and subsections 199(2) to (4) and 200(2) and (4) apply, with any modifications that the circumstances require, to real property acquired by the registrant for use as capital property of the registrant or, in the case of subsection 199(4), to improvements to real property that is capital property of the registrant, as if the real property were personal property.

• Marginal note:2000, c. 30, s. 43(1)

  (2) The portion of subsection 209(3) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Exception

    (3) Despite subsections (1) and (2), section 141.2 and subsections 200(3) and (4) do not apply to

• (3) Subsections (1) and (2) are deemed to have come into force on February 1, 2004.

• 38. (1) The Act is amended by adding the following after section 257:

  Marginal note:Sale of personal property by nonregistrant municipality

  • 257.1 (1) If a person that is a municipality, or is designated to be a municipality for the purposes of section 259, and that is not a registrant makes, at any time, a taxable supply by way of sale of personal property that is capital property of the person (other than property of a person designated to be a municipality for the purposes of section 259 that is not designated municipal property of the person), the Minister shall, subject to subsection (2), pay a rebate to the person equal to the lesser of

    • (a) the basic tax content of the property at that time, and

    • (b) the tax that is or would, in the absence of section 167, be payable in respect of the taxable supply.

  • Marginal note:Application for rebate

    (2) A rebate shall not be paid to a person under subsection (1) unless the person files an application for the rebate within two years after the day on which the consideration for the supply became due or was paid without having become due.

  • Marginal note:Redemption of personal property

    (3) If, for the purposes of satisfying in whole or in part a debt or obligation owing by a person (in this subsection referred to as the “debtor”), a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of personal property and the debtor has a right to redeem the property under the Act or the agreement, the following rules apply:

    • (a) the debtor is not entitled to claim a rebate under subsection (1) with respect to the property unless the time limit for redeeming the property has expired and the debtor has not redeemed the property; and

    • (b) if the debtor is entitled to claim the rebate, consideration for the supply is deemed, for the purposes of subsection (2), to have become due on the day on which the time limit for redeeming the property expires.

• (2) Subsection (1) applies to any supply for which consideration becomes due after March 9, 2004 or 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 March 10, 2004.