Excise Tax Act

Marginal note:Meaning of “specified amount”

• 233 (1) In this section, specified amount, in respect of a patronage dividend paid by a person in a fiscal year of the person, means the amount determined by the formula

  A × [(B + D)/(C + D)]

  where

  A

  is the amount of the patronage dividend;

  B

  is the total value of all consideration that became due, or was paid without having become due, in the immediately preceding fiscal year of the person while the person was a registrant for taxable supplies (other than supplies by way of sale of capital property of the person and zero-rated supplies) made in Canada by the person;

  C

  is the total value of all consideration that became due, or was paid without having become due, in the immediately preceding fiscal year of the person for taxable supplies (other than supplies by way of sale of capital property of the person) made in Canada by the person; and

  D

  is the total of all tax that became payable, or was paid without having become payable, in the immediately preceding fiscal year of the person in respect of taxable supplies (other than supplies by way of sale of capital property of the person) made by the person.

• Marginal note:Patronage dividends

  (2) For the purposes of this Part, if, at any time in a fiscal year of a particular person, the particular person pays to another person a patronage dividend all or part of which is in respect of supplies (in this subsection referred to as “specified supplies”) that are taxable supplies (other than zero-rated supplies) made by the particular person to the other person, the particular person is deemed

  • (a) to have reduced, at that time,

    • (i) the total consideration for all supplies (in this subparagraph referred to as the “participating province’s supplies”) that are specified supplies made in a participating province and to which subsection 165(2) applied by the amount determined by the formula

      (100%/A) × B

      where

      A

      is the total of 107% and the tax rate for that province, and

      B

      is

      • (A) if the particular person has made an election under this subsection that is in effect for that fiscal year, the part of the dividend that is in respect of the participating province’s supplies, and

      • (B) in any other case, the amount determined by the formula

        (C/D) × E

        where

        C

        is the portion of the total of the values determined, in computing the specified amount in respect of the dividend, for B and D in subsection (1) that is attributable to supplies made in that province,

        D

        is the total referred to in the description of C, and

        E

        is the specified amount in respect of the dividend, and

    • (ii) the total consideration for all supplies (in this subparagraph referred to as the “non-participating provinces’ supplies”) that are specified supplies to which subsection 165(2) did not apply by the amount determined by the formula

      (100/107) × A

      where

      A

      is

      • (A) if the particular person has made an election under this subsection that is in effect for that fiscal year, the part of the dividend that is in respect of the non-participating provinces’ supplies, and

      • (B) in any other case, the amount determined by the formula

        (B/C) × D

        where

        B

        is the portion of the total of the values determined, in computing the specified amount in respect of the dividend, for B and D in subsection (1) that is attributable to supplies made in non-participating provinces,

        C

        is the total referred to in the description of B, and

        D

        is the specified amount in respect of the dividend; and

  • (b) to have made, at that time, the appropriate adjustment, refund or credit in favour of, or to, the other person under subsection 232(2).

• Marginal note:Exception

  (3) Subsection (2) does not apply to a patronage dividend paid by a person in a fiscal year of the person for which an election made by the person under this subsection is in effect, in which event the dividend shall be deemed not to be a reduction of the consideration for any supplies.

• Marginal note:Time for election

  (4) An election made under subsection (2) or (3) by a person shall be made before any patronage dividend is paid by the person in the fiscal year of the person in which the election is to take effect.

• Marginal note:Revocation of election

  (5) An election made under subsection (2) or (3) by a person may be revoked by the person in a fiscal year of the person if the revocation is to take effect before any patronage dividend is paid by the person in that year.

• Marginal note:Date of payment of dividend

  (6) For the purposes of this section, a dividend shall be deemed to be paid on the day that it is declared.