Provincial Choice Tax Framework Act (S.C. 2009, c. 32)
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Assented to 2009-12-15
Provincial Choice Tax Framework Act
S.C. 2009, c. 32
Assented to 2009-12-15
An Act to amend the Excise Tax Act
SUMMARY
This enactment amends the Excise Tax Act (the “Act”) to implement, effective July 1, 2010, the new fully harmonized value-added tax framework in Ontario and British Columbia. It also facilitates the new framework to accommodate any province’s decision to have the provincial component of the harmonized value-added tax under the Act apply in that province by achieving a common understanding with Canada in respect of such a new framework, including the provision of rules and mechanisms to ensure
(a) the proper imposition of the provincial component of the harmonized value-added tax in respect of that province;
(b) the proper application of any element of provincial tax policy flexibility contemplated under the common understanding, including rate flexibility for the provincial component of the harmonized value-added tax, rebate flexibility in respect of the provincial component of the harmonized value-added tax and the temporary recapture of certain input tax credits in respect of the provincial component of the harmonized value-added tax;
(c) the proper functioning and application of the Act in all respects, including provisions flowing from the provincial tax policy flexibility contemplated under the common understanding and the addition of every province that chooses to join the new framework; and
(d) the proper administration and enforcement of, and compliance with, the Act.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Marginal note:Short title
1. This Act may be cited as the Provincial Choice Tax Framework Act.
R.S., c. E-15EXCISE TAX ACT
2. (1) The definitions “participating province” and “tax rate” in subsection 123(1) of the Excise Tax Act are replaced by the following:
“participating province”
« province participante »
“participating province” means
(a) a province or area referred to in Schedule VIII, but does not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities are carried on in that area, and
(b) if there is a sales tax harmonization agreement with the government of a province relating to the new harmonized value-added tax system and the province is a prescribed province, that province;
“tax rate”
« taux de taxe »
“tax rate”, for or in relation to a participating province, means
(a) if there is a sales tax harmonization agreement with the government of the participating province relating to the new harmonized value-added tax system, the rate that is prescribed for the participating province,
(b) if the participating province is an offshore area referred to in the definition “participating province”, the rate that is prescribed for the participating province, and
(c) in the absence of a rate that is prescribed for the participating province, the rate set opposite the name of the participating province in Schedule VIII;
(2) The portion of paragraph (b) of the definition “basic tax content” in subsection 123(1) of the Act before the first formula is replaced by the following:
(b) if the person brought the property into a participating province from another province for consumption, use or supply in the participating province in circumstances in which the person was required to pay tax in respect of the property under section 220.05, or would have been required to pay that tax but for the fact that the property was brought into that province for consumption, use or supply exclusively in commercial activities or the person was exempt from paying that tax under any other Act or law, the amount determined by the formula
(3) Paragraph (d) of the definition “direct cost” in subsection 123(1) of the Act is replaced by the following:
(d) if the property was brought into a participating province from another province, any tax under this Part payable by the supplier in respect of the bringing in of the property into the participating province, and
(4) Subsection 123(1) of the Act is amended by adding the following in alphabetical order:
“harmonization date”
« date d’harmonisation »
“harmonization date” for a participating province means
(a) April 1, 1997 in the case of Nova Scotia, New Brunswick, Newfoundland and Labrador, the Nova Scotia offshore area or the Newfoundland offshore area,
(b) July 1, 2010 in the case of Ontario or British Columbia, and
(c) the prescribed date in the case of another participating province;
“new harmonized value-added tax system”
« nouveau régime de la taxe à valeur ajoutée harmonisée »
“new harmonized value-added tax system” has the same meaning as in subsection 277.1(1);
“sales tax harmonization agreement”
« accord d’harmonisation de la taxe de vente »
“sales tax harmonization agreement” has the same meaning as in subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act;
(5) Subsections (1) to (4) come into force, or are deemed to have come into force, on July 1, 2010.
3. (1) Section 132.1 of the Act is amended by adding the following after subsection (2):
Marginal note:Permanent establishment in a province
(3) A prescribed person, or a person of a prescribed class, is deemed, under prescribed circumstances and for prescribed purposes, to have a permanent establishment in a prescribed province.
(2) Subsection (1) applies in respect of any fiscal year of a person that ends on or after July 1, 2008.
4. (1) Subsection 149(5) of the Act is amended by striking out “and” at the end of paragraph (e), by adding “and” at the end of paragraph (f) and by adding the following after paragraph (f):
(g) a prescribed person, or a person of a prescribed class, but only where the person would be a selected listed financial institution for a reporting period in a fiscal year that ends in a taxation year of the person if the person were a listed financial institution included in subparagraph 149(1)(a)(ix) during the taxation year and the preceding taxation year of the person.
(2) Subsection (1) applies in respect of any taxation year of a person that ends on or after July 1, 2008.
5. (1) Subsection 169(3) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) the amount is a prescribed amount.
(2) Subsection (1) applies in respect of any reporting period of a person that ends on or after July 1, 2010.
6. (1) Subclause (I) of the description of A in clause 173(1)(d)(ii)(B) of the French version of the Act is replaced by the following:
(I) si l’un ou l’autre des faits suivants s’avère :
1. l’avantage est à inclure, en application des alinéas 6(1)a) ou e) de la Loi de l’impôt sur le revenu, dans le calcul du revenu du particulier tiré d’une charge ou d’un emploi et le dernier établissement de l’employeur auquel le particulier travaillait ou se présentait habituellement au cours de l’année dans le cadre de cette charge ou de cet emploi est situé dans une province participante,
2. l’avantage est à inclure, en application du paragraphe 15(1) de cette loi, dans le calcul du revenu du particulier et celui-ci réside dans une province participante à la fin de l’année,
la somme de 4 % et du pourcentage déterminé selon les modalités réglementaires relativement à la province ou, en l’absence d’un tel pourcentage, la somme de 4 % et du taux de taxe applicable à la province,
(2) The portion of subclause (I) of the description of A in clause 173(1)(d)(vi)(B) of the English version of the Act after sub-subclause 2 is replaced by the following:
the total of 4% and the percentage determined in prescribed manner in respect of the participating province or, in the absence of a percentage determined in prescribed manner in respect of the participating province, the total of 4% and the tax rate for the participating province, and
(3) Subsections (1) and (2) come into force, or are deemed to have come into force, on July 1, 2010.
7. (1) Subparagraph (i) of the description of B in paragraph 174(e) of the French version of the Act is replaced by the following:
(i) dans les circonstances prévues par règlement relativement à une province participante, le pourcentage déterminé selon les modalités réglementaires,
(2) Subparagraph (i) of the description of B in paragraph 174(f) of the English version of the Act is replaced by the following:
(i) in prescribed circumstances relating to a participating province, the percentage determined in prescribed manner, and
(3) Subsections (1) and (2) apply to any allowance paid by a person on or after July 1, 2010.
8. (1) Section 178.3 of the Act is amended by adding the following after subsection (6):
Marginal note:Adjustment in respect of participating provinces
(6.1) In determining the net tax of a direct seller for a reporting period of the direct seller that includes a prescribed time, the direct seller shall add or may deduct, as the case may require, an amount determined in prescribed manner if
(a) the direct seller makes a supply in a participating province of an exclusive product of the direct seller in circumstances in which an amount is required under paragraph (1)(d) to be added in determining the net tax of the direct seller;
(b) tax payable under subsection 165(2) in respect of the supply is included in the amount required under paragraph (1)(d) to be added in determining the net tax of the direct seller;
(c) an independent sales contractor of the direct seller makes a supply of the exclusive product in another participating province; and
(d) prescribed conditions, if any, are satisfied.
(2) Subsection (1) applies in respect of any reporting period of a direct seller that ends on or after July 1, 2010.
9. (1) Section 178.4 of the Act is amended by adding the following after subsection (6):
Marginal note:Adjustment in respect of participating provinces
(6.1) In determining the net tax of a distributor of a direct seller for a reporting period of the distributor that includes a prescribed time, the distributor shall add or may deduct, as the case may require, an amount determined in prescribed manner if
(a) the distributor makes a supply of an exclusive product of the direct seller in a participating province in circumstances in which an amount is required under paragraph (1)(d) to be added in determining the net tax of the distributor;
(b) tax payable under subsection 165(2) in respect of the supply is included in the amount required under paragraph (1)(d) to be added in determining the net tax of the distributor;
(c) a particular independent sales contractor of the direct seller (other than the distributor) makes a supply of the exclusive product in another participating province; and
(d) prescribed conditions, if any, are satisfied.
(2) Subsection (1) applies in respect of any reporting period of a distributor of a direct seller that ends on or after July 1, 2010.
- Date modified: