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Select Luxury Items Tax Act (S.C. 2022, c. 10, s. 135)

Act current to 2024-05-14 and last amended on 2022-09-01. Previous Versions

PART 1Select Luxury Items Tax (continued)

DIVISION 2Application of Tax (continued)

SUBDIVISION DTax on Improvements (continued)

Marginal note:Rules — improvement in other circumstances

  •  (1) Subject to section 31, for the purposes of this section and for the purposes of determining under section 35 the amount of tax payable under this section, if tax in respect of a subject item becomes payable by a person on a particular day under any of sections 20 and 23 to 28, the following rules apply:

    • (a) the improvement period in respect of the subject item is the period that begins on the particular day and ends on

      • (i) if the subject item is subsequently sold to another person that deals at arm’s length with the person and the sale is completed before the day that is one year after the particular day, the day on which the sale is completed, and

      • (ii) in any other case, the day that is one year after the particular day;

    • (b) the unimproved taxable amount of the subject item is equal to the taxable amount of the subject item as determined under whichever of those sections is applicable; and

    • (c) the net improvement amount of the subject item is equal to the total of all amounts, each of which is the value of the consideration for an improvement in respect of the subject item that is completed at any time during the improvement period in respect of the subject item but only to the extent that the value of the consideration is not included in the determination of the unimproved taxable amount of the subject item.

  • Marginal note:Tax — improvement in other circumstances

    (2) Subject to this Act, a person must pay to Her Majesty in right of Canada tax in respect of a subject item in the amount determined under section 35 if

    • (a) tax in respect of the subject item becomes payable on a particular day by the person under any of sections 20 and 23 to 28; and

    • (b) the net improvement amount of the subject item is greater than or equal to $5,000.

  • Marginal note:When tax payable

    (3) The tax under subsection (2) in respect of a subject item becomes payable at the beginning of the day following the day on which the improvement period in respect of the subject item ends.

Marginal note:Improvement period — regulations

  •  (1) For the purposes of this Subdivision, if prescribed circumstances exist, the improvement period in respect of a subject item is a prescribed period.

  • Marginal note:Unimproved taxable amount — regulations

    (2) For the purposes of this Subdivision and for the purposes of determining under section 35 the amount of tax payable under this Subdivision in respect of a subject item, if prescribed circumstances exist, the unimproved taxable amount of the subject item is to be determined in prescribed manner.

  • Marginal note:Net improvement amount — regulations

    (3) For the purposes of this Subdivision and for the purposes of determining under section 35 the amount of tax payable under this Subdivision in respect of a subject item, if prescribed circumstances exist, the net improvement amount of the subject item is to be determined in prescribed manner.

Marginal note:Non-arm’s length — joint and several, or solidary, liability

 If tax in respect of a subject item is payable by a particular person under section 29 or 30 and if ownership of the subject item is transferred at any time during the improvement period in respect of the subject item to another person that is not dealing at arm’s length with the particular person, the other person is jointly and severally, or solidarily, liable with the particular person for the payment of the tax.

SUBDIVISION EGeneral Rules

Marginal note:Tax not payable — regulations

 Tax under this Act in respect of a subject item is not payable if prescribed circumstances exist.

Marginal note:Amount of tax — general

 The amount of tax payable under this Division (other than Subdivision D) in respect of a subject item is equal to the lesser of

  • (a) the amount determined by the formula

    A × B

    where

    A
    is the taxable amount of the subject item, and
    B
    is 10%, and
  • (b) the amount determined by the formula

    (C − D) × E

    where

    C
    is the taxable amount of the subject item,
    D
    is the price threshold in respect of the subject item, and
    E
    is 20%.

Marginal note:Amount of tax — improvement

 The amount of tax payable under Subdivision D in respect of a subject item is equal to the amount determined by the formula

(A − B) + C

where

A
is the amount that would be the amount of tax payable in respect of the subject item if that amount of tax were determined under section 34 and the taxable amount of the subject item were equal to the total of the unimproved taxable amount of the subject item and the net improvement amount of the subject item;
B
is the amount that would be the amount of tax payable in respect of the subject item if that amount of tax were determined under section 34 and the taxable amount of the subject item were equal to the unimproved taxable amount of the subject item; and
C
is a prescribed amount.

DIVISION 3Certificates

Marginal note:Exemption certificate

  •  (1) For the purposes of this Act, an exemption certificate applies in respect of the sale of a subject item by a vendor to a purchaser only if

    • (a) the certificate is made in prescribed form containing prescribed information;

    • (b) the certificate includes

      • (i) the identification number of the subject item,

      • (ii) one of the following declarations by the purchaser:

        • (A) a declaration that the purchaser is a registered vendor in respect of that type of subject item at the time at which the sale is completed,

        • (B) in the case of a subject aircraft, a declaration that the purchaser is a qualifying aircraft user at the time at which the sale is completed,

        • (C) in the case of a subject aircraft, a declaration that the subject item is, at the time at which ownership of the subject item is transferred to the purchaser, a qualifying subject aircraft of the purchaser, or

        • (D) in the case of a subject vessel (other than a select subject vessel), a declaration that the subject item is, at the time at which ownership of the subject item is transferred to the purchaser, a qualifying subject vessel of the purchaser,

      • (iii) if the certificate includes the declaration in clause (ii)(A), the registration number assigned to the purchaser under subsection 51(2), and

      • (iv) an acknowledgement by the purchaser that the purchaser is assuming liability to pay any amount of tax in respect of the subject item that is or may become payable by the purchaser under this Act;

    • (c) the purchaser provides, in a manner satisfactory to the Minister, the certificate in respect of the sale to the vendor; and

    • (d) the vendor retains the certificate.

  • Marginal note:Exemption certificate — multiple purchasers

    (2) For the purposes of this Act, if a subject item is sold by a vendor to more than one purchaser, an exemption certificate applies in respect of the sale of the subject item only if

    • (a) in the absence of this subsection, an exemption certificate would apply in respect of each purchaser in accordance with subsection (1); and

    • (b) the declaration that is made by each purchaser under subparagraph (1)(b)(ii) is made under the same clause of that subparagraph.

  • Marginal note:Exemption certificate — regulations

    (3) Despite subsections (1) and (2), for the purposes of this Act, if prescribed circumstances exist, an exemption certificate applies in respect of a sale of a subject item.

Marginal note:Tax certificate

  •  (1) A person must send to the Minister an application for a tax certificate in respect of a subject item that is a subject aircraft or subject vessel if

    • (a) tax in respect of the subject item became payable by the person on a particular day;

    • (b) it is the case that

      • (i) if the tax became payable under section 20, the tax was paid in accordance with that section, and

      • (ii) in any other case, the person has filed with the Minister the return for the reporting period that includes the particular day and the person has taken into account the tax in determining the net tax for that reporting period;

    • (c) in the case where a rebate is or was available in respect of the subject item under Division 4, the amount of the rebate is less than the amount of the tax; and

    • (d) prescribed conditions, if any, are met.

  • Marginal note:Content of application

    (2) An application under subsection (1) in respect of a subject item must

    • (a) include the identification number of the subject item;

    • (b) specify the date on which the tax in respect of the subject item became payable;

    • (c) include evidence satisfactory to the Minister that the conditions described in subparagraph (1)(b)(i) or (ii), as the case may be, are met; and

    • (d) be made in prescribed form containing prescribed information.

  • Marginal note:Timing of application

    (3) An application under subsection (1) in respect of a subject item must be filed with the Minister in prescribed manner on or before

    • (a) the particular day that is one year after the day on which the tax in respect of the subject item became payable; or

    • (b) any day after the particular day that the Minister may allow.

  • Marginal note:Issuance of tax certificate

    (4) Upon receipt of an application under subsection (1) in respect of a subject item, the Minister must consider, with all due dispatch, the application and, if the Minister is satisfied that the conditions described in that subsection are met in respect of the subject item, issue a tax certificate in respect of the subject item specifying

    • (a) the identification number of the subject item;

    • (b) the date on which the tax certificate came into effect; and

    • (c) any other information that is prescribed by regulation.

  • Marginal note:Tax certificate — in effect

    (5) For the purposes of this Act, a tax certificate in respect of a subject item that is issued under subsection (4) is deemed to be in effect beginning immediately after the time at which the tax in respect of the subject item became payable.

  • Marginal note:Existing certificate

    (6) The Minister must not issue a tax certificate in respect of a subject item if another tax certificate has previously been issued in respect of the subject item under subsection (4) and the other tax certificate has not been revoked under subsection (10).

  • Marginal note:Statement to applicant

    (7) After considering an application under subsection (1) in respect of a subject item, the Minister must send, or make available in electronic format, to the applicant a statement specifying whether or not a tax certificate was issued under subsection (4) in respect of the subject item and

    • (a) if a tax certificate in respect of the subject item was issued because of the application, the Minister must send, or make available in electronic format, to the applicant with the statement a copy of, or the information included on, the tax certificate; or

    • (b) if the Minister does not issue a tax certificate because there exists a previously issued tax certificate in respect of the subject item that has not been revoked under subsection (10), the Minister must send, or make available in electronic format, to the applicant with the statement a copy of, or the information included on, the previously issued tax certificate.

  • Marginal note:Request by third party

    (8) On request made by a person to the Minister in prescribed manner, the Minister must send, or make available in electronic format, to the person

    • (a) a statement specifying

      • (i) whether a tax certificate in respect of a subject item has been issued under subsection (4), and

      • (ii) if a tax certificate in respect of the subject item has been issued under subsection (4), whether a notice of revocation in respect of the tax certificate has been issued under subsection (10);

    • (b) if a tax certificate in respect of the subject item has been issued under subsection (4), a copy of, or the information included on, the tax certificate; and

    • (c) if a notice of revocation in respect of a tax certificate in respect of the subject item has been issued under subsection (10), a copy of, or the information included on, the notice of revocation.

  • Marginal note:Notification of change

    (9) If a tax certificate in respect of a subject item was issued under subsection (4), if the tax certificate has not been revoked under subsection (10) and if the person that applied for the tax certificate under subsection (1) becomes aware at any time that the conditions described in subsection (1) are not met in respect of the subject item, the person must without delay provide notice in writing to the Minister that the conditions in subsection (1) are not met.

  • Marginal note:Revocation

    (10) If a tax certificate has been issued in respect of a subject item under subsection (4) and the tax certificate has not already been revoked under this subsection and the Minister becomes aware that the conditions described in subsection (1) are not met in respect of the subject item, the Minister must with all due dispatch

    • (a) revoke the tax certificate; and

    • (b) issue a notice of revocation in respect of the tax certificate specifying

      • (i) the identification number of the subject item,

      • (ii) the effective date of the revocation, and

      • (iii) any information that is prescribed by regulation.

  • Marginal note:Revocation — timing

    (11) For the purposes of this Act, a tax certificate issued under subsection (4) that has been revoked under subsection (10) is deemed never to have been in effect on any day on or after the effective day specified in the notice of revocation.

Marginal note:Application for special import certificate

  •  (1) A person that intends to import a subject item that is a subject aircraft or subject vessel (other than a select subject vessel) may apply to the Minister for a special import certificate in respect of the importation of the subject item if

    • (a) at the time at which the subject item is accounted for in accordance with section 32 of the Customs Act, the person is an owner of the subject item and

      • (i) the subject item is a qualifying subject aircraft or qualifying subject vessel of the person, or

      • (ii) in the case of a subject aircraft, the subject item is accounted for in accordance with section 32 of the Customs Act solely by the person and

        • (A) if the person is the only owner of the subject aircraft, the person is a qualifying aircraft user, and

        • (B) in any other case, each person that is an owner of the subject aircraft is a qualifying aircraft user; or

    • (b) prescribed conditions are met.

  • Marginal note:Content of application

    (2) An application made by a person in respect of a subject item under subsection (1) must

    • (a) include a declaration by the person specifying which of the conditions described in paragraph (1)(a) or (b) are met in respect of the subject item;

    • (b) include the identification number of the subject item;

    • (c) include the person’s name;

    • (d) be made in prescribed form containing prescribed information; and

    • (e) be filed with the Minister in prescribed manner.

  • Marginal note:Issuance of special import certificate

    (3) Upon receipt of an application made by a person in respect of a subject item under subsection (1), the Minister must, with all due dispatch, consider the application and, if the Minister is satisfied that the conditions in respect of the subject item described in that subsection are met, issue and send to the person a special import certificate in respect of the importation of the subject item by the person specifying

    • (a) the name of the person;

    • (b) the identification number of the subject item;

    • (c) the date on which the special import certificate is issued; and

    • (d) any other information that is prescribed by regulation.

  • Marginal note:Special import certificate — in effect

    (4) For the purposes of this Act, a special import certificate that is issued under subsection (3) in respect of the importation of a subject item is deemed to be in effect beginning on the day on which the special import certificate is issued.

  • Marginal note:Notice of non-issuance

    (5) If, after considering an application made by a person in respect of a subject item under subsection (1), the Minister does not issue to the person a special import certificate in respect of the importation of the subject item by the person, the Minister must send a notice to the person specifying that a special import certificate was not issued.

  • Marginal note:Notification of change

    (6) If a special import certificate in respect of the importation of a subject item was issued to a person under subsection (3), if the special import certificate has not been revoked under subsection (7) and if the person becomes aware that the conditions described in subsection (1) are not met in respect of the subject item, the person must without delay provide notice in writing to the Minister that the conditions in subsection (1) are not met.

  • Marginal note:Revocation

    (7) If a special import certificate in respect of the importation of a subject item was issued to a person under subsection (3), if the special import certificate has not already been revoked under this subsection and if the Minister becomes aware that the conditions described in subsection (1) are not met in respect of the subject item, the Minister must with all due dispatch

    • (a) revoke the special import certificate; and

    • (b) issue, and send to the person, a notice of revocation in respect of the special import certificate specifying

      • (i) the identification number of the subject item,

      • (ii) the effective date of the revocation, and

      • (iii) any information that is prescribed by regulation.

  • Marginal note:Revocation — in effect

    (8) For the purposes of this Act, a special import certificate issued under subsection (3) that has been revoked under subsection (7) is deemed to cease to have effect on the effective day specified in the notice of revocation.

 

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