Excise Tax Act (R.S.C., 1985, c. E-15)

Marginal note:Bets and games of chance

187. For the purposes of this Part, where a particular person bets an amount on a game of chance, a race or other event or occurrence, the following rules apply:

• (a) the person with whom the bet is placed is deemed to have made a supply of a service to the particular person;

• (b) where the bet is placed in a participating province, that supply is deemed to have been made in that province; and

• (c) the consideration for that supply is deemed to be equal to the amount determined by the formula

  (A/B) × (C - D)

  where

  A 

  is 100%,

  B 

  is

  • (i) if that supply is made in a participating province, the total of 100%, the rate set out in subsection 165(1) and the tax rate for that province, and

  • (ii) in any other case, the total of 100% and the rate set out in subsection 165(1),

  C 

  is the total amount in respect of the bet that is given by the particular person to the person with whom the bet is placed, including any amount given as or on account of tax imposed on the particular person under an Act of the legislature of a province or under this Part, and

  D 

  is the amount of any tax imposed under an Act of the legislature of a province on the particular person in respect of the amount that is bet.

Marginal note:Prizes

• 188. (1) If a commercial activity of a registrant (other than a registrant to whom subsection (5) applies) consists of taking bets or conducting games of chance and, in the course of that activity, the registrant pays an amount of money at any time in a reporting period as a prize or winnings to a bettor or a person playing or participating in the games, for the purpose of determining an input tax credit of the registrant, the registrant shall be deemed to have received at that time a taxable supply of a service for use exclusively in the activity and to have paid, at that time, tax in respect of the supply equal to the amount determined by the formula

  (A/B) × C

  where

  A 

  is

  • (a) if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

  • (b) in any other case, the rate set out in subsection 165(1),

  B 

  is the total of 100% and the percentage determined for A, and

  C 

  is the amount of money paid as the prize or winnings.

• Marginal note:Prizes in competitive events

  (2) Where, in the course of an activity that involves the organization, promotion hosting or other staging of a competitive event, a person gives a prize to a competitor in the event,

  • (a) the giving of the prize shall be deemed, for the purposes of this Part, not to be a supply;

  • (b) the prize shall be deemed, for the purposes of this Part, not to be consideration for a supply by the competitor to the person; and

  • (c) tax payable by the person in respect of any property given as the prize shall not be included in determining any input tax credit of the person for any reporting period.

• Marginal note:Contributions by competitors

  (3) For the purposes of this Part, where a competitor in a competitive event contributes an amount to the prizes to be given to competitors in the event, the contribution shall be deemed not to be consideration for a supply.

• Marginal note:Application of subsection (3)

  (4) Subsection (3) does not apply in respect of a contribution that is made as part of a fee or charge paid by a competitor in a competitive event for the right or privilege of participating in the event and that is not separately identified as a contribution to the prizes.

• Marginal note:Net tax of prescribed registrant

  (5) Where a registrant is a prescribed registrant at any time in a reporting period, the registrant’s net tax for the period shall be determined in a prescribed manner.