Excise Tax Act

Marginal note:Tax in participating province

• 218.1 (1) Subject to this Part,

  • (a) every person that is resident in a participating province and is the recipient of an imported taxable supply that is a supply of intangible personal property or a service that is acquired by the person for consumption, use or supply in participating provinces to an extent that is prescribed must, for each time an amount of consideration for the supply becomes due or is paid without having become due and for each participating province, pay to Her Majesty in right of Canada, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

    A × B × C

    where

    A

    is the tax rate for the participating province,

    B

    is the value of that consideration that is paid or becomes due at that time, and

    C

    is the extent (expressed as a percentage) to which the person acquired the property or service for consumption, use or supply in the participating province; and

  • (b) every person that

    • (i) is a registrant and is the recipient of a supply, included in paragraph (b) of the definition imported taxable supply in section 217, of property the physical possession of which is transferred to the registrant in a particular participating province,

    • (ii) is the recipient of a supply, included in any of paragraphs (b.01) to (b.3) of the definition imported taxable supply in section 217, of property that is delivered or made available to the person in a particular participating province and is either resident in that province or is a registrant, or

    • (iii) is the recipient of a supply that is included in paragraph (c.1), (d) or (e) of the definition imported taxable supply in section 217 and that is made in a particular participating province

    shall pay to Her Majesty in right of Canada, each time an amount of consideration for the supply becomes due or is paid without having become due, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

    A × B × C

    where

    A

    is the tax rate for the particular participating province,

    B

    is the value of that consideration that is paid or becomes due at that time, and

    C

    is

    • (A) in the case of an imported taxable supply of tangible personal property, 100%, and

    • (B) in any other case, the extent (expressed as a percentage) to which the person acquired the property for consumption, use or supply in the particular participating province.

• Marginal note:Delivery in a province

  (1.1) Section 3 of Part II of Schedule IX applies for the purpose of subparagraph (1)(b)(ii).

• Marginal note:Tax in a participating province

  (1.2) Subject to this Part, every qualifying taxpayer that is resident in a participating province shall, for each specified year of the qualifying taxpayer and for each particular participating province, pay to Her Majesty in right of Canada, in addition to the tax payable under section 218.01, tax calculated at the tax rate for the particular participating province on

  • (a) if an election under subsection 217.2(1) is in effect for the specified year, the amount determined by the formula

    A + B

    where

    A

    is the total of all amounts, each of which is an amount in respect of an internal charge for the specified year that is greater than zero determined by the formula

    A₁ × A₂

    where

    A₁

    is the internal charge, and

    A₂

    is the extent (expressed as a percentage) to which the internal charge is attributable to outlays or expenses that were made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the internal charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province, and

    B

    is the total of all amounts, each of which is an amount in respect of an external charge for the specified year that is greater than zero determined by the formula

    B₁ × B₂

    where

    B₁

    is the external charge, and

    B₂

    is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the external charge, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the external charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province; and

  • (b) in any other case, the total of all amounts, each of which is an amount in respect of qualifying consideration for the specified year that is greater than zero determined by the formula

    C × D

    where

    C

    is the qualifying consideration, and

    D

    is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the qualifying consideration, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the qualifying consideration is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province.

• Marginal note:Qualifying taxpayer resident in a province

  (1.3) Despite section 132.1 and for the purposes of subsection (1.2), a qualifying taxpayer is deemed to be resident in a province at any time if, at that time,

  • (a) the qualifying taxpayer has a qualifying establishment in the province; or

  • (b) in the case of a qualifying taxpayer that is resident in Canada, the qualifying taxpayer is

    • (i) a corporation incorporated or continued under the laws of the province and not continued elsewhere,

    • (ii) an entity that is a partnership, an unincorporated society, a club, an association or an organization, or a branch of such an entity, in respect of which a majority of the members having management and control of the entity or branch are resident in the province, or

    • (iii) a trust, carrying on activities as a trust in the province, that has a local office or branch in the province.

• Marginal note:Selected listed financial institutions

  (2) If tax under subsection (1) or (1.2) would, in the absence of this subsection, become payable by a person when the person is a selected listed financial institution, that tax is not payable unless it is an amount of tax that

  • (a) is prescribed for the purposes of paragraph (a) of the description of F in subsection 225.2(2);

  • (b) is in respect of an imported taxable supply of property or a service acquired otherwise than for consumption, use or supply in the course of an endeavour (as defined in subsection 141.01(1)) of the person; or

  • (c) is a prescribed amount.

• Marginal note:Application in offshore areas

  (3) Subsection (1) does not apply to

  • (a) an imported taxable supply of intangible personal property or a service made to a person who is resident in the Nova Scotia offshore area or the Newfoundland offshore area unless the property or service is acquired by the person for consumption, use or supply in the course of an offshore activity or the person is also resident in a participating province that is not an offshore area; or

  • (b) an imported taxable supply of tangible personal property the physical possession of which is transferred, or that is delivered or made available, to the recipient of the supply in the Nova Scotia offshore area or the Newfoundland offshore area unless the property is acquired by the recipient for consumption, use or supply in the course of an offshore activity.

• Marginal note:Use in offshore areas

  (4) For the purposes of subsection (1), a person that acquires property or a service for consumption, use or supply in the Nova Scotia offshore area or the Newfoundland offshore area is deemed to acquire the property or service for consumption, use or supply in that area only to the extent that it is acquired for consumption, use or supply in that area in the course of an offshore activity.