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Games of Chance (GST/HST) Regulations (SOR/91-28)

Regulations are current to 2022-09-11 and last amended on 2019-03-04. Previous Versions

PART 3Net Tax of Prescribed Registrants (continued)

Net Tax of Provincial Gaming Authority (continued)

Marginal note:Net tax attributable to non-gaming activities

 A provincial gaming authority’s net tax attributable to non-gaming activities for a particular reporting period of the authority is the positive or negative amount determined by the formula

A - B

where

A
is the total of all amounts each of which is
  • (a) an amount that became collectible by the authority during the particular period, or that was collected by the authority during the particular period without having become collectible, as or on account of tax under Division II of Part IX of the Act in respect of a non-gaming supply made by the authority,

  • (b) an amount that is required under any of sections 231 to 236 of the Act to be added in determining the authority’s net tax for the particular period, or

  • (c) an amount that is required under section 236.01 of the Act to be added in determining the authority’s net tax for the particular period, but only to the extent that the authority would not be restricted from including the amount under the description of B as a consequence of subsection 9(1); and

B
is the total of
  • (a) all amounts each of which is

    • (i) an input tax credit (other than an input tax credit referred to in paragraph(b)) for the particular period or a preceding reporting period of the authority,

    • (ii) an amount in respect of a non-gaming supply that may be deducted under any of sections 231, 232 and 234 of the Act in determining the authority’s net tax for the particular period, or

    • (iii) an amount that may be deducted under section 236.01 of the Act in determining the authority’s net tax for the particular period,

    claimed in the return filed under Division V of Part IX of the Act by the authority for the particular period,

  • (b) twice the value of all amounts each of which is

    • (i) an input tax credit of the authority for the particular period or a preceding reporting period of the authority in respect of tax deemed under subsection 206(2) or (3) of the Act to have been paid by the authority, or

    • (ii) an input tax credit of the authority for the particular period or a preceding reporting period of the authority determined under subsection 193(1) of the Act,

    claimed in the return filed under Division V of Part IX of the Act by the authority for the particular period, and

  • (c) all amounts each of which is determined by the formula

    B1 × (100% - B2)

    where

    B1
    is an amount of
    • (i) a reduction, refund or credit of tax for which a credit note is received, or a debit note is issued, in the particular period by the authority in circumstances in which subsection 232(3) of the Act applies, or

    • (ii) a rebate received in the particular period by the authority on account of tax in the circumstances described in section 181.1 of the Act, and

    B2
    is the extent (expressed as a percentage) to which the authority was entitled to claim an input tax credit in respect of that tax in determining the authority’s net tax for any reporting period.
  •  SOR/98-440, s. 6
  • SOR/2012-191, s. 4

Marginal note:Restriction on input tax credits, etc.

  •  (1) An input tax credit (other than an input tax credit determined under subsection 193(1) of the Act), or an imputed input tax credit, in respect of property or a service shall not be included in determining a total for A2 in subsection 7(7), or a total for B in section 8, to the extent that the property or service

    • (a) was acquired or imported, or brought into a participating province, by the authority for consumption or use in gaming activities of the authority, in improving capital property used in gaming activities of the authority, in making promotional supplies or in making supplies of financial services that relate to gaming activities of the authority;

    • (b) was acquired or imported, or brought into a participating province, by the authority for the purpose of making a supply of the property or service that is a promotional supply;

    • (c) is tangible personal property that was acquired or imported, or brought into a participating province, by the authority for use as an ingredient in preparing food or beverages the supply of which by the authority is a promotional supply;

    • (d) is tangible personal property that was acquired or imported, or brought into a participating province, by the authority for the purpose of being incorporated into or forming a constituent or component part of, or being consumed or expended directly in the process of manufacturing, particular tangible personal property (other than food or beverages) that the authority manufactures or engages another person to manufacture for the purpose of making a supply of the particular property that is a promotional supply; or

    • (e) is a service that is the manufacturing for the authority of tangible personal property (other than food or beverages) and that the authority acquires for the purpose of making a supply of the property that is a promotional supply.

  • Marginal note:Use of capital property

    (2) For the purposes of applying section 193 of the Act and the provisions of Subdivision d of Division II of Part IX of the Act in determining the net tax of a provincial gaming authority, the following rules apply:

    • (a) subsections 141(1) to (4), 193(2), 199(2) to (4) and 200(2) and (3) of the Act do not apply to the authority;

    • (b) subsection 193(1) of the Act applies, with such modifications as the circumstances require, to all property (other than a passenger vehicle) acquired or imported by the authority for use as capital property of the authority as if the authority were not a public sector body and, in the case of personal property, the property acquired or imported by the authority for that use were real property;

    • (c) subsections 206(2) to (5) of the Act apply, with such modifications as the circumstances require, to personal property acquired or imported by the authority for use as capital property of the authority, and to improvements to personal property that is capital property of the authority, as if the personal property were real property and the references in those subsections to “acquired” were references to “acquired or imported”;

    • (d) where the authority acquires or imports property for use as capital property of the authority in commercial activities of the authority, the authority is deemed to have acquired or imported the property for use in the authority’s commercial activities only to the extent to which the property was acquired or imported for use in the authority’s non-gaming activities; and

    • (e) where the authority uses property as capital property of the authority in commercial activities of the authority, that use is deemed to be use in the authority’s commercial activities only to the extent to which the property is used in the authority’s non-gaming activities.

  • Marginal note:Double counting

    (3) An amount shall not be included in determining a total for A in subsection 7(1) or section 8 for a reporting period of a provincial gaming authority to the extent that that amount was included in that total for a preceding reporting period of the authority.

  • Marginal note:Restriction

    (4) An amount shall not be included in determining a total for B in section 8 for a particular reporting period of a provincial gaming authority to the extent that that amount was claimed or included in that total in determining the net tax for a preceding reporting period of the authority unless

    • (a) the authority was not entitled to claim the amount in determining the net tax for that preceding period only because the authority did not satisfy the requirements of subsection 169(4) of the Act in respect of the amount before the return for that preceding period was filed; and

    • (b) where the authority is claiming the amount in a return for the particular reporting period and the Minister has not disallowed the amount as an input tax credit in assessing the net tax of the authority for that preceding reporting period,

      • (i) the authority reports in writing to the Minister, at or before the time the return for the particular reporting period is filed, that the authority made an error in claiming that amount in determining the net tax of the authority for that preceding period, and

      • (ii) where the authority does not report the error to the Minister at least three months before the end of the period after which an assessment of the net tax of the authority for that preceding period cannot, because of subsection 298(1) of the Act, be made, the authority pays, at or before the time the return for the particular reporting period is filed, the amount and any applicable penalty and interest to the Receiver General.

  • Marginal note:Amounts refunded or remitted

    (5) An amount shall not be included in determining a total for B in section 8 for a reporting period of a provincial gaming authority to the extent that, before the end of the period, the amount was rebated, refunded or remitted to the authority under any Act of Parliament.

  • Marginal note:Application

    (6) Sections 231 to 236.01 of the Act do not apply for the purpose of determining the net tax of a provincial gaming authority except as otherwise provided in this Part.

  • Marginal note:Method of determining extent of use, etc.

    (7) The methods used by a person in a fiscal year to determine

    • (a) the extent to which properties or services are acquired or imported or brought into a participating province by the person for consumption or use in particular activities or for a particular purpose, and

    • (b) the extent to which the consumption or use by the person of properties or services is in particular activities or for a particular purpose,

    shall be fair and reasonable and shall be used consistently by the person throughout the year.

  • SOR/98-440, s. 6
  • SOR/2011-56, s. 13
  • SOR/2012-191, s. 5

Interprovincial Lottery Corporation and its Members

Marginal note:Net tax of Interprovincial Lottery Corporation

 The net tax for a reporting period of the Interprovincial Lottery Corporation is the amount that would be its net tax for the period determined under section 225 of the Act if the amount collectible by it as or on account of tax under Division II of Part IX of the Act in respect of each supply made by it to a provincial gaming authority were the amount determined in accordance with section 11.

  • SOR/98-440, s. 6

Marginal note:Presumption concerning tax on supply

 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of the Interprovincial Lottery Corporation, if the Corporation makes a supply of property or a service to a provincial gaming authority, the tax payable in respect of the supply is deemed to be the tax that would be payable in respect of the supply if the value of the consideration for the supply were the amount determined by the formula

A - B

where

A
is the value of the consideration for the supply determined without reference to this section; and
B
is the total of all amounts each of which is determined by the formula

B1 × B2

where

B1
is a particular amount that is
  • (a) salary, wages or other remuneration paid or payable to an employee of the Corporation, other than an amount that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for the purposes of that Act,

  • (b) consideration paid or payable by the Corporation for an exempt supply of a service or a zero-rated supply, or

  • (c) a tax, duty or fee prescribed for the purposes of section 154 of the Act, and

B2
is the extent (expressed as a percentage) to which the particular amount is a cost to the Corporation of supplying the property or service.
  •  SOR/98-440, s. 6
  • SOR/2011-56, s. 14(E)

Marginal note:Presumption concerning rights and distributions

 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of the Interprovincial Lottery Corporation and of any provincial gaming authority, where any proceeds from a game of chance conducted by the Corporation are distributed to one or more provincial gaming authorities, the following rules apply:

  • (a) the particular rights to play or participate in that game to which each authority’s share of the proceeds is attributable are deemed to be rights of that authority and not of the Corporation; and

  • (b) in relation to the particular rights,

    • (i) the game is deemed to be conducted by,

    • (ii) the related bets are deemed to be made with and accepted by, and

    • (iii) the liability for the payment of any related prizes or winnings is deemed to be that of,

    that authority and not the Corporation.

  • SOR/98-440, s. 6

Marginal note:Expenses incurred by Interprovincial Lottery Corporation

 Where the Interprovincial Lottery Corporation incurs expenses in conducting a game of chance and those expenses are not charged to a provincial gaming authority as consideration for a taxable supply but are charged at any time to the authority otherwise than as consideration for a supply or are taken into account in determining the amount of proceeds from the game that are paid, at any time, to the authority, for the purpose of paragraph (a.1) of the description of A1 in subsection 7(7), the imputed tax payable by the authority in respect of those expenses for the reporting period of the authority that includes that time is the amount determined by the formula

A × (B - C)

where

A
is the rate set out in subsection 165(1) of the Act,
B
is the amount of those expenses, and
C
is the total of all amounts each of which is determined by the formula

C1 × C2

where

C1
is a particular amount that is
  • (a) salary, wages or other remuneration paid or payable to an employee of the Corporation, other than an amount that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for the purposes of that Act,

  • (b) consideration paid or payable by the Corporation for an exempt supply of a service or a zero-rated supply, or

  • (c) a tax, duty or fee prescribed for the purposes of section 154 of the Act, and

C2
is the extent (expressed as a percentage) to which the particular amount is a cost to the Corporation of conducting the game and is included in the expenses referred to in the description of B.
  •  SOR/98-440, s. 6
  • SOR/2011-56, s. 15

Marginal note:Presumption concerning status as financial institution

 For all purposes relevant to the determination of the net tax of the Interprovincial Lottery Corporation, the Corporation is deemed not to be a financial institution.

  • SOR/98-440, s. 6

Provincial Gaming Authority as Distributor

Marginal note:Special rule

 If a provincial gaming authority, other than the Interprovincial Lottery Corporation, (in this section referred to as the “reporting authority”) is a distributor of another provincial gaming authority in relation to a game of chance conducted by or on behalf of the other authority,

  • (a) in applying subsection 7(7) and sections 8 and 9 of these Regulations and Part IX of the Act in determining the imputed tax payable on gaming expenses and the input tax credits of the reporting authority and of the other authority, any amount paid or payable by the reporting authority on behalf of the other authority in respect of the acquisition or importation, or bringing into a participating province, of property or a service for consumption, use or supply in relation to the conduct of the game is to be taken into account as if

    • (i) the game were conducted by the reporting authority as part of the gaming activities of the reporting authority and not of the other authority,

    • (ii) the property or service were acquired or imported, or brought into the participating province, and the amount were paid or payable, by the reporting authority on its own account and not by the other authority,

    • (iii) the rights to play or participate in the game were rights of the reporting authority and not of the other authority, and

    • (iv) persons, other than the reporting authority, acting as distributors of the other authority in relation to the game were distributors of the reporting authority, and not of the other authority, in relation to the game;

  • (b) no amount that would, but for subsection 188.1(4) of the Act, be consideration for a supply by the reporting authority to the other authority in relation to the game is to be included in the total for C1 in subsection 7(7); and

  • (c) no amount of a reimbursement paid or payable by the other authority to the reporting authority in respect of an expense incurred or to be incurred by the reporting authority that is attributable to the game is to be included in the amount determined for A3 or C1 in subsection 7(7).

  • SOR/2011-56, s. 16
 
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