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New Harmonized Value-added Tax System Regulations (SOR/2010-117)

Regulations are current to 2022-09-22 and last amended on 2019-03-04. Previous Versions

PART 1Place of Supply (continued)

DIVISION 5Special Cases (continued)

Definition of leg

  •  (1) In this section, leg means a part of a flight of an aircraft that begins where passengers embark or disembark the aircraft, where freight is loaded on the aircraft or unloaded from it or where the aircraft is stopped to allow for its servicing or refuelling, and that ends where it is next stopped for any of those purposes.

  • Marginal note:Air navigation services

    (2) A supply of air navigation services (as defined in subsection 2(1) of the Civil Air Navigation Services Commercialization Act) is made in a particular province if the leg of the flight in respect of which the services are performed originates in the province.

Marginal note:Specified motor vehicle

 If a supply by way of sale of a specified motor vehicle is made and the supplier maintains evidence satisfactory to the Minister that, on or before the day that is seven days after the day on which the vehicle was delivered or made available in a participating province to the recipient of the supply, the vehicle was registered, otherwise than temporarily, under the laws of another province relating to the registration of motor vehicles by or on behalf of the recipient, the supply is made in that other province.

  • SOR/2012-191, s. 22

Marginal note:Screening services

 A supply of a service of screening made by a screening contractor to the Authority (as those terms are defined in section 2 of the Canadian Air Transport Security Authority Act) is made in a province if all or substantially all of the service is performed at an airport situated in the province.

  • SOR/2012-191, s. 22

PART 1.1Participating Provinces and Applicable Tax Rates

Marginal note:Prince Edward Island — harmonization date

  •  (1) For the purposes of paragraph (c) of the definition harmonization date in subsection 123(1) of the Act, the prescribed date in the case of Prince Edward Island is April 1, 2013.

  • Marginal note:Prince Edward Island — participating province

    (2) For the purposes of paragraph (b) of the definition participating province in subsection 123(1) of the Act, Prince Edward Island is a prescribed province.

  • Marginal note:Prince Edward Island — tax rate

    (3) For the purposes of paragraph (a) of the definition tax rate in subsection 123(1) of the Act, the prescribed rate for Prince Edward Island is 10%.

  • SOR/2013-44, s. 16
  • SOR/2016-212, s. 1

Marginal note:New Brunswick — tax rate

 For the purposes of paragraph (a) of the definition tax rate in subsection 123(1) of the Act, the prescribed rate for New Brunswick is 10%.

  • SOR/2016-119, s. 1

Marginal note:Newfoundland and Labrador — tax rate

  •  (1) For the purposes of paragraph (a) of the definition tax rate in subsection 123(1) of the Act, the prescribed rate for Newfoundland and Labrador is 10%.

  • Marginal note:Newfoundland offshore area — tax rate

    (2) For the purposes of paragraph (b) of the definition tax rate in subsection 123(1) of the Act, the prescribed rate for the Newfoundland offshore area is 10%.

  • SOR/2016-119, s. 1

PART 2Anti-Avoidance Rules Relating to Harmonization

Marginal note:Application

 This Part applies despite any provision of the Act.

Marginal note:Variation of agreement — new harmonized province

 If

  • (a) at any time before the harmonization date for a participating province, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

  • (b) the supplier and the recipient at a later time either directly or indirectly

    • (i) vary or alter the agreement for the supply, or

    • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

  • (c) the supplier, the recipient and, if applicable, the other persons are not dealing with each other at arm’s length at the time the agreement referred to in paragraph (a) is entered into or at the later time,

  • (d) tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated at the tax rate for the participating province on all or part of the value of the consideration for the supply attributable to the property or service,

  • (e) tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements, in the absence of this section, would not apply to, or would be calculated at a rate that is less than the tax rate for the participating province on, any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated at the tax rate for the participating province, and

  • (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to, directly or indirectly, reduce, avoid or defer tax or any other amount payable under Part IX of the Act or benefit in any manner from the participating province becoming a participating province,

tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate at which tax would have been calculated under paragraph (d) on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

Marginal note:Variation of agreement — change in tax rate

 If

  • (a) at any time before the particular date on which a change in the tax rate for a participating province applies in respect of a taxable supply of property or a service, a supplier and a recipient enter into an agreement for a taxable supply of the property or service,

  • (b) the supplier and the recipient at a later time either directly or indirectly

    • (i) vary or alter the agreement for the supply, or

    • (ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

  • (c) the supplier, the recipient and, if applicable, the other persons are not dealing with each other at arm’s length at the time the agreement referred to in paragraph (a) is entered into or at the later time,

  • (d) tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated on all or part of the value of the consideration for the supply attributable to the property or service at the tax rate (in this section referred to as the “higher rate”) for the participating province that is the greater of

    • (i) the tax rate for the participating province that applies immediately before the particular date in respect of a taxable supply of the property or service, and

    • (ii) the tax rate for the participating province that applies on the particular date in respect of a taxable supply of the property or service,

  • (e) tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements, in the absence of this section, would not apply to, or would be calculated at a rate that is less than the higher rate on, any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated at the higher rate, and

  • (f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to, directly or indirectly, reduce, avoid or defer tax or any other amount payable under Part IX of the Act or benefit in any manner from the rate change,

tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate at which tax would have been calculated under paragraph (d) on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

Marginal note:Definitions

  •  (1) The following definitions apply in this section.

    harmonization event

    harmonization event means the transition by a province to the new harmonized value-added tax system or any change referred to in paragraph 277.1(3)(a) of the Act as “provincial tax policy flexibility”. (opération d’harmonisation)

    person

    person does not include a consumer. (personne)

    tax benefit

    tax benefit means a reduction, an avoidance or a deferral of tax or other amount payable under Part IX of the Act or an increase in a refund or rebate of tax or other amount under that Part. (avantage fiscal)

    transaction

    transaction has the same meaning as in subsection 274(1) of the Act. (opération)

  • Marginal note:Harmonization event — transactions

    (2) If

    • (a) a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made,

    • (b) the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and

    • (c) it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from a harmonization event, for one or more of the persons involved in the transaction or series of transactions,

    the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under Part IX of the Act, or any other amount that is relevant for the purposes of computing that amount, shall be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons.

  • Marginal note:Denying tax benefit on transactions

    (3) A tax benefit shall only be denied under subsection (2) through an assessment, reassessment or additional assessment under Part IX of the Act.

  • Marginal note:Request for adjustments

    (4) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day on which the notice was sent, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

  • Marginal note:Duties of Minister

    (5) On receipt of a request by a person under subsection (4), the Minister shall, with all due dispatch, consider the request and, despite subsections 298(1) and (2) of the Act, assess, reassess or make an additional assessment under Part IX of the Act with respect to the person, except that the assessment, reassessment or additional assessment may be made only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4).

  • 2010, c. 25, s. 143

PART 3Ontario and British Columbia General HST Transitional Rules

DIVISION 1Interpretation

Marginal note:Definitions

  •  (1) The following definitions apply in this Part.

    harmonized provinces

    harmonized provinces means the participating provinces and includes Ontario and British Columbia. (provinces harmonisées)

    reciprocal taxation agreement

    reciprocal taxation agreement means an agreement referred to in section 32 of the Federal-Provincial Fiscal Arrangements Act. (accord de réciprocité fiscale)

    retail sales tax

    retail sales tax means a general retail sales tax imposed under an Act of the legislature of a specified province at a percentage rate on property other than that which is specifically enumerated in that Act. (taxe de vente au détail)

    specified province

    specified province means Ontario or British Columbia. (province déterminée)

  • Marginal note:Conflict

    (2) This Part applies despite any provision of the Act.

DIVISION 2Application

Marginal note:Personal property and services

  •  (1) Subject to Division 3, subsection 165(2) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to any supply of tangible personal property, intangible personal property or a service made in a specified province if all or part of the consideration for the supply becomes due or is paid, or is deemed to have become due or to have been paid, on or after July 1, 2010 and is not deemed to have become due or to have been paid before that day, except that tax is not payable under that subsection (otherwise than because of Division 3) in respect of any part of the consideration for the supply that becomes due or is paid before that day and is not deemed to have become due or to have been paid on or after that day.

  • Marginal note:Imported goods — section 212.1

    (2) Subject to Division 3, section 212.1 of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that section apply to tangible personal property, a mobile home that is not affixed to land and a floating home, any of which is imported by a person resident in a specified province on or after July 1, 2010, and to such property that is imported by a person resident in a specified province before that day and that is, on or after that day, accounted for under subsection 32(1), paragraph 32(2)(a) or subsection 32(5) of the Customs Act or released in the circumstances set out in paragraph 32(2)(b) of that Act.

  • Marginal note:Imported goods — subsection 220.07(1)

    (3) Subject to Division 3, subsection 220.07(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to tangible personal property, a mobile home that is not affixed to land and a floating home, any of which is brought into a specified province from a place outside Canada on or after July 1, 2010, and to such property that is brought into a specified province from a place outside Canada before that day and that is, on or after that day, accounted for under subsection 32(1), paragraph 32(2)(a) or subsection 32(5) of the Customs Act or released in the circumstances set out in paragraph 32(2)(b) of that Act.

  • Marginal note:Tangible personal property brought into a specified province

    (4) Subject to Division 3, subsections 220.05(1) and 220.06(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under those subsections apply to tangible personal property, a mobile home that is not affixed to land and a floating home, any of which is brought into a specified province on or after July 1, 2010, and to such property that is brought into a specified province before that day by a carrier if the property is delivered in the specified province to a consignee on or after that day.

  • Marginal note:Tangible personal property supplied outside Canada

    (5) Subject to Division 3, subsection 218.1(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to any supply of tangible personal property made outside Canada to a person to which the property is delivered or made available, or physical possession of the property is transferred, in a specified province, if all or part of the consideration for the supply becomes due or is paid, or is deemed to have become due or to have been paid, on or after July 1, 2010 and is not deemed to have become due or to have been paid before that day, except that tax is not payable under that subsection (otherwise than because of Division 3) in respect of any part of the consideration for the supply that becomes due or is paid before that day and is not deemed to have become due or to have been paid on or after that day.

  • Marginal note:Consumption, use or supply in a specified province

    (6) Subject to Division 3, subsections 218.1(1) and 220.08(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under those subsections apply to any supply of intangible personal property or a service acquired for consumption, use or supply in a specified province if all or part of the consideration for the supply becomes due or is paid, or is deemed to have become due or to have been paid, on or after July 1, 2010 and is not deemed to have become due or to have been paid before that day, except that, if the supply is made to a person resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador, tax is not payable under those subsections (otherwise than because of Division 3) in respect of any part of the consideration for the supply that becomes due or is paid before that day and is not deemed to have become due or to have been paid on or after that day.

 
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