Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)
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Assented to 2017-12-14
PART 2Amendments to the Excise Tax Act and to Related Legislation (GST/HST Measures) (continued)
R.S., c. E-15Excise Tax Act (continued)
115 (1) The Act is amended by adding the following after section 172.1:
Marginal note:Excluded amount
172.2 (1) For the purposes of this section, an excluded amount of a master pension entity is an amount of tax that
(a) is deemed to have been paid by the master pension entity under this Part (other than section 191);
(b) became payable, or was paid without having become payable, by the master pension entity at a time when it was entitled to claim a rebate under section 259; or
(c) is payable under subsection 165(1), or is deemed under section 191 to have been paid, by the master pension entity in respect of a taxable supply to the master pension entity of a residential complex, an addition to a residential complex or land if, in respect of that supply, the master pension entity is entitled to claim a rebate under section 256.2 or would be so entitled after paying the tax payable in respect of that supply.
Marginal note:Designated pension entity
(2) For the purposes of this section,
(a) if a person is a master pension entity of a pension plan having, at any time, only one pension entity, that pension entity is, at that time, the designated pension entity of the pension plan in respect of the person; and
(b) if a person is a master pension entity of a pension plan having, at any time, two or more pension entities and if an election made jointly under subsection (4) by the person and one of those pension entities is in effect at that time, that pension entity is, at that time, the designated pension entity of the pension plan in respect of the person.
Marginal note:Tax deemed paid by designated pension entity — section 261.01
(3) For the purposes of section 261.01, if a particular amount of tax becomes payable, or is paid without having become payable, by a master pension entity of one or more pension plans at any time in a fiscal year of the master pension entity and if the particular amount of tax is not an excluded amount of the master pension entity, then, for each of those pension plans, the designated pension entity of the pension plan at that time in respect of the master pension entity is deemed to have paid at that time an amount of tax equal to the amount determined by the formula
A × B
where
- A
- is
(a) if the designated pension entity is a selected listed financial institution and the particular amount of tax is payable under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1, zero, and
(b) in any other case, the amount determined by the formula
A1 − A2
where
- A1
- is the particular amount of tax, and
- A2
- is the total of all amounts, each of which is included in the particular amount of tax and is
(i) an input tax credit that the master pension entity is entitled to claim in respect of the particular amount of tax,
(ii) an amount for which it can reasonably be regarded that the master pension entity has obtained or is entitled to obtain a rebate, refund or remission under any other section of this Act or under any other Act of Parliament, or
(iii) an amount that can reasonably be regarded as being included in an amount adjusted, refunded or credited to or in favour of the master pension entity for which a credit note referred to in subsection 232(3) has been received by the master pension entity or a debit note referred to in that subsection has been issued by the master pension entity; and
- B
- is the master pension factor in respect of the pension plan for the fiscal year of the master pension entity that includes that time.
Marginal note:Designated pension entity election
(4) A master pension entity of a pension plan having two or more pension entities may jointly elect with one of those pension entities, in prescribed form containing prescribed information, to have that pension entity be, while the election is in effect, the designated pension entity of the pension plan in respect of the master pension entity for the purposes of this section.
Marginal note:Effective period of election
(5) An election made under subsection (4) by a particular person that is a master pension entity of a pension plan and by another person that is a pension entity of the pension plan becomes effective on the day set out in the election and ceases to have effect on the earliest of
(a) the day on which the particular person ceases to be a master pension entity of the pension plan,
(b) the day on which the other person ceases to be a pension entity of the pension plan,
(c) the day on which an election made under subsection (4) by the particular person and by a third person that is a pension entity of the pension plan becomes effective, and
(d) the day specified in a revocation of the election made under subsection (6).
Marginal note:Revocation
(6) A master pension entity and a pension entity that have jointly made an election under subsection (4) may jointly revoke the election, in prescribed form containing prescribed information, effective on the day specified in the revocation.
(2) Subsection (1) applies in respect of amounts of tax that become payable, or that are paid without having become payable, by a person after July 21, 2016.
116 Paragraph 178(18)(c) of the French version of the Act is replaced by the following:
c) la fourniture est effectuée sans contrepartie ou pour une contrepartie inférieure à la juste valeur marchande du bien ou du service,
117 Subparagraphs 178.3(4)(b)(ii) and (iii) of the French version of the Act are replaced by the following:
(ii) fournit le produit à une personne autre qu’un entrepreneur indépendant du démarcheur pour une contrepartie non symbolique mais inférieure à son prix de vente au détail suggéré au moment donné et sur laquelle est calculée la taxe payée par la personne,
(iii) fournit le produit à une personne autre qu’un entrepreneur indépendant du démarcheur sans contrepartie ou pour une contrepartie symbolique ou réserve le produit pour sa consommation ou son utilisation personnelles;
118 Subparagraphs 178.4(4)(b)(ii) and (iii) of the French version of the Act are replaced by the following:
(ii) fournit le produit à une personne autre qu’un entrepreneur indépendant du démarcheur pour une contrepartie non symbolique mais inférieure à son prix de vente au détail suggéré au moment donné et sur laquelle est calculée la taxe payée par la personne,
(iii) fournit le produit à une personne autre qu’un entrepreneur indépendant du démarcheur sans contrepartie ou pour une contrepartie symbolique ou réserve le produit pour sa consommation ou son utilisation personnelles;
119 Paragraph 178.5(8)(a) of the French version of the Act is replaced by the following:
a) la fourniture est effectuée sans contrepartie ou pour une contrepartie inférieure à la juste valeur marchande du bien ou du service;
120 Paragraph 178.6(5)(d) of the English version of the Act is replaced by the following:
(d) despite paragraph (c), the person and the ultimate recipient are jointly and severally, or solidarily, liable for the payment of the tax in respect of the supply made by the original supplier; and
121 (1) Subparagraph 179(1)(a)(i) of the Act is replaced by the following:
(i) makes a taxable supply in Canada of tangible personal property by way of sale, or a taxable supply in Canada of a service of manufacturing or producing tangible personal property, to the non-resident person, or acquires physical possession of tangible personal property (other than property of a person that is resident in Canada) for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the non-resident person, and
(2) Paragraph 179(1)(c) of the Act is replaced by the following:
(c) the registrant is deemed to have made a taxable supply in Canada of the property to the non-resident person and the non-resident person is deemed to have received that supply from the registrant,
(3) Subparagraph 179(2)(a)(i) of the Act is replaced by the following:
(i) makes a taxable supply in Canada of tangible personal property by way of sale, or a taxable supply in Canada of a service of manufacturing or producing tangible personal property, to the non-resident person, or acquires physical possession of tangible personal property (other than property of a person that is resident in Canada) for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the non-resident person, and
(4) Subsection 179(2) of the Act is amended by striking out “and” at the end of paragraph (b) and by replacing paragraph (c) with the following:
(b.1) the consignee is acquiring physical possession of the property
(i) as the recipient of a taxable supply of the property made by any non-resident person that is not registered under Subdivision D of Division V,
(ii) for the purpose of making a taxable supply in Canada of a service of manufacturing or producing other tangible personal property to any non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the service, if the property
(A) is incorporated or transformed into, attached to, or combined or assembled with, the other tangible personal property in the manufacture or production of the other tangible personal property, or
(B) is directly consumed or expended in the manufacture or production of the other tangible personal property,
(iii) if the property is not property of a person that is resident in Canada, for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to any non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the commercial service, or
(iv) for the purpose of making a taxable supply in Canada of a commercial service in respect of other tangible personal property (other than property of a person that is resident in Canada) to any non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the commercial service, if the property
(c) the consignee gives to the registrant, and the registrant retains, a certificate that
(i) states the consignee’s name and registration number assigned under section 241,
(ii) acknowledges that the consignee is acquiring physical possession of the property as the recipient of a supply referred to in subparagraph (b.1)(i) or for a purpose referred to in any of subparagraphs (b.1)(ii) to (iv), and
(iii) acknowledges that the consignee, on taking physical possession of the property, is assuming liability to pay or remit any amount that is or may become payable or remittable by the consignee
(5) Section 179 of the Act is amended by adding the following after subsection (2):
Marginal note:Exception — certificate of registered owner
(2.1) For the purposes of this Part, if
(a) a registrant, under an agreement between the registrant and a non-resident person that is not registered under Subdivision D of Division V,
(i) makes a taxable supply in Canada of tangible personal property by way of sale to the non-resident person,
(ii) makes a taxable supply in Canada of a service of manufacturing or producing tangible personal property to the non-resident person, or
(iii) acquires physical possession of tangible personal property (other than property of a person that is resident in Canada) for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the non-resident person,
(b) under the agreement, the registrant causes, at a particular time, physical possession of the property to be transferred, at a place in Canada, to a third person (in this subsection referred to as the “consignee”),
(c) the non-resident person is not a consumer of the property or service supplied by the registrant under the agreement,
(d) a particular person (other than the registrant) that is registered under Subdivision D of Division V makes a taxable supply of the property to the consignee,
(e) the consignee is acquiring physical possession of the property at the particular time as the recipient of the taxable supply referred to in paragraph (d), and
(f) the registrant retains a certificate that
(i) is given to the registrant by the particular person, or by the consignee provided that the consignee is registered under Subdivision D of Division V,
(ii) states the particular person’s name and registration number assigned under section 241, and
(iii) if the certificate is given by the consignee, states the consignee’s name and registration number assigned under section 241,
subsection (1) does not apply to a supply referred to in paragraph (a) and, except in the case of a supply of a service of shipping the property, any supply made by the registrant and referred to in that paragraph is deemed to have been made outside Canada.
(6) Paragraphs 179(2.1)(d) to (f) of the Act, as enacted by subsection (5), are replaced by the following:
(d) the consignee is not entitled, under subsection (2), to give to the registrant a certificate described in paragraph (2)(c) in respect of the transfer of physical possession of the property to the consignee,
(e) either
(i) the property is, immediately after the particular time, property of a particular person that is registered under Subdivision D of Division V and that is neither the registrant nor the consignee, and the registrant retains a certificate that
(A) is given to the registrant by the particular person,
(B) states the particular person’s name and registration number assigned under section 241,
(C) acknowledges that the property is, immediately after the particular time, property of the particular person, and
(D) if the property was acquired by the particular person by way of sale from a non-resident person that is not registered under Subdivision D of Division V, acknowledges that the particular person is assuming liability to pay any amount that is or may become payable by the particular person under Division IV in respect of the property, or
(ii) a particular person, other than the registrant, that is registered under Subdivision D of Division V makes a taxable supply by way of sale of the property to the consignee before the particular time, the consignee is acquiring physical possession of the property at the particular time as the recipient of that taxable supply, and the registrant retains a certificate that
(A) is given to the registrant by the particular person, or by the consignee provided that the consignee is registered under Subdivision D of Division V,
(B) states the particular person’s name and registration number assigned under section 241,
(C) if the certificate is given by the consignee, states the consignee’s name and registration number assigned under section 241, and
(D) acknowledges that the particular person made a taxable supply by way of sale of the property to the consignee before the particular time and that the consignee acquired physical possession of the property at the particular time as the recipient of that taxable supply, and
(f) if subparagraph (a)(i) applies, the property is delivered or made available to the particular person referred to in subparagraph (e)(i) or (ii), as the case may be, after the property is delivered or made available to the non-resident person under the agreement,
(7) Subparagraph 179(3)(a)(iii) of the Act is replaced by the following:
(iii) acquires physical possession of tangible personal property (other than property of a person that is resident in Canada) for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the non-resident person,
(8) The portion of subsection 179(4) of the Act before paragraph (a) is replaced by the following:
Marginal note:Retention of possession
(4) For the purposes of this section, section 180 and the definition imported taxable supply in section 217, if
(9) Subparagraph 179(4)(b)(i) of the English version of the Act is replaced by the following:
(i) transferring physical possession of the property to the non-resident person, a person (in this subsection referred to as a “subsequent purchaser”) that subsequently acquires ownership of the property or a person designated by the non-resident person or a subsequent purchaser,
(10) Subparagraph 179(4)(b)(ii) of the Act is replaced by the following:
(ii) making a taxable supply in Canada of a commercial service in respect of the property to the non-resident person or a subsequent purchaser, or
(11) Paragraphs 179(4)(c) and (d) of the Act are replaced by the following:
(c) if the particular registrant so retains physical possession of the property after that time,
(i) the particular registrant is deemed to have, under the agreement referred to in paragraph (a), caused at that time physical possession of the property to be transferred, at a place in Canada, to another person that is a registrant,
(ii) the other person referred to in subparagraph (i) is deemed to have given to the particular registrant a certificate described in paragraph (2)(c) in respect of that transfer of physical possession of the property,
(iii) if subparagraph (b)(i) or (ii) applies, the particular registrant is deemed
(A) except if clause (B) applies, to have acquired, at that time, physical possession of the property, under the agreement referred to in paragraph (a), for the purpose of making a taxable supply in Canada to the non-resident person of a commercial service in respect of the property that is not a storage service, or
(B) if subparagraph (b)(ii) applies and the supply referred to in that subparagraph is to be made to the non-resident person, or to a non-resident subsequent purchaser that is not registered under Subdivision D of Division V and is not a consumer of the commercial service referred to in that subparagraph, to have acquired, at that time, physical possession of the property, under the agreement for that supply, for the purpose referred to in that subparagraph, and
(iv) if subparagraph (b)(iii) applies,
(A) the particular registrant is deemed to have acquired physical possession of the property, as the recipient of the supply under the agreement referred to in that subparagraph, from another person that is a registrant and that has made a supply in Canada of the property by way of sale to a non-resident person,
(B) that acquisition of physical possession of the property is deemed to have occurred at the time when, and at the place where, the property is delivered or made available to the particular registrant under the agreement referred to in that subparagraph, and
(C) the particular registrant is deemed to have given to the other person referred to in clause (A) a certificate described in paragraph (2)(c) in respect of that acquisition of physical possession of the property, and
(d) if another registrant so retains physical possession of the property after that time,
(i) if subparagraph (b)(i) or (ii) applies,
(A) the particular registrant is deemed to have, under the agreement referred to in paragraph (a), caused at that time physical possession of the property to be transferred at a place in Canada to the other registrant, and
(B) the other registrant is deemed
(I) except if subclause (II) applies, to have acquired, at that time, physical possession of the property, under an agreement between the other registrant and the non-resident person, for the purpose of making a taxable supply in Canada to the non-resident person of a commercial service in respect of the property that is not a storage service, or
(II) if subparagraph (b)(ii) applies and the supply referred to in that subparagraph is to be made to the non-resident person, or to a non-resident subsequent purchaser that is not registered under Subdivision D of Division V and is not a consumer of the commercial service referred to in that subparagraph, to have acquired, at that time, physical possession of the property, under the agreement for that supply, for the purpose referred to in that subparagraph, and
(ii) if subparagraph (b)(iii) applies,
(A) the particular registrant is deemed to have, under the agreement referred to in paragraph (a), caused physical possession of the property to be transferred to the other registrant,
(B) the other registrant is deemed to have acquired physical possession of the property from the particular registrant as the recipient of the supply under the agreement referred to in that subparagraph, and
(C) the particular registrant is deemed to have caused that transfer, and the other registrant is deemed to have so acquired physical possession of the property, at the time when, and at the place where, the property is delivered or made available to the other registrant under the agreement referred to in that subparagraph.
(12) The portion of subsection 179(5) of the Act before paragraph (a) is replaced by the following:
Marginal note:Transfer of possession to bailee
(5) For the purposes of this section, section 180 and the definition imported taxable supply in section 217, if a registrant at any time transfers physical possession of tangible personal property to a bailee solely for the purpose of storing or shipping the property and either
(13) The portion of subsection 179(6) of the Act before paragraph (a) is replaced by the following:
Marginal note:Goods transferred to bailee by non-resident
(6) For the purposes of this section, section 180 and the definition imported taxable supply in section 217, if a non-resident person that is not registered under Subdivision D of Division V transfers physical possession of tangible personal property to a bailee that is a registrant for the sole purpose of storing or shipping the property and the bailee
(14) Section 179 of the Act, as amended by subsections (1) to (13), is replaced by the following:
Marginal note:Drop shipment — deemed supply
179 (1) For the purposes of this Part, if
(a) a registrant
(i) makes a taxable supply in Canada of particular tangible personal property by way of sale to a non-resident person that is not registered under Subdivision D of Division V,
(ii) makes a taxable supply in Canada of a service of manufacturing or producing particular tangible personal property to a non-resident person that is not registered under Subdivision D of Division V,
(iii) acquires physical possession of particular tangible personal property (other than property of a person that is resident in Canada) for the purpose of making a taxable supply in Canada of a commercial service in respect of the particular property to a non-resident person that is not registered under Subdivision D of Division V, or
(iv) acquires — as the recipient of a supply of particular tangible personal property made by way of lease, licence or similar arrangement by a non-resident person that is not registered under Subdivision D of Division V — physical possession of the particular property and either
(A) gives a certificate described in paragraph (2)(d) in respect of that acquisition of physical possession of the particular property, or
(B) claims an input tax credit in respect of tax that is deemed to have been paid or payable by the registrant under subsection 178.8(2) or paragraph 180(d) in respect of the particular property,
(b) the registrant, at a particular time, causes physical possession of the particular property to be transferred, at a place in Canada, to a third person (in this subsection referred to as the “consignee”) or to the non-resident person, and
(c) the non-resident person is not a consumer of the particular property,
the following rules apply:
(d) the registrant is deemed to have made a particular taxable supply in Canada of the particular property to the non-resident person and the non-resident person is deemed to have received the particular taxable supply from the registrant,
(e) if the transfer of physical possession of the particular property occurs at a place in a participating province, the particular taxable supply is deemed to have been made in that province,
(f) the particular taxable supply is deemed to have been made for consideration, that becomes due and is paid at the particular time, equal to
(i) except if subparagraph (ii) applies, the fair market value of the particular property at the particular time, and
(ii) if the registrant has caused physical possession of the particular property to be transferred to a consignee that is acquiring physical possession of the particular property as the recipient of a supply made by the non-resident person by way of sale for no consideration, nil, and
(g) the registrant is deemed not to have made the taxable supply referred to in any of subparagraphs (a)(i) to (iii) in respect of the particular property to the non-resident person, unless that supply is a supply of a service of storing the particular property.
Marginal note:Exception — certificate of registered consignee
(2) For the purposes of this Part, if
(a) paragraphs (1)(a) to (c) apply to
(i) a taxable supply in respect of particular tangible personal property that is made by a registrant and is referred to in any of subparagraphs (1)(a)(i) to (iii), or
(ii) an acquisition by a registrant of physical possession of particular tangible personal property that is referred to in subparagraph (1)(a)(iv),
(b) the transfer referred to in paragraph (1)(b) of physical possession of the particular property is to a person (in this subsection referred to as the “consignee”) that is registered under Subdivision D of Division V,
(c) the consignee is acquiring physical possession of the particular property
(i) as the recipient of a taxable supply of the particular property made by a non-resident person that is not registered under Subdivision D of Division V,
(ii) for the purpose of making a taxable supply in Canada of a service of manufacturing or producing other tangible personal property to a non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the other property, if the particular property
(iii) if the particular property is not property of a person that is resident in Canada, for the purpose of making a taxable supply in Canada of a commercial service in respect of the particular property to a non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the particular property, or
(iv) for the purpose of making a taxable supply in Canada of a commercial service in respect of other tangible personal property (other than property of a person that is resident in Canada) to a non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the other property, if the particular property
(d) the consignee gives to the registrant, and the registrant retains, a certificate that
(i) states the consignee’s name and registration number assigned under section 241,
(ii) acknowledges that the consignee is acquiring physical possession of the particular property as the recipient of a supply referred to in subparagraph (c)(i) or for a purpose referred to in any of subparagraphs (c)(ii) to (iv), and
(iii) acknowledges that the consignee is assuming liability to pay or remit any amount that is or may become payable or remittable by the consignee
the following rules apply:
(e) paragraphs (1)(d) to (g) do not apply to the taxable supply referred to in subparagraph (a)(i) or the acquisition referred to in subparagraph (a)(ii), as the case may be, and
(f) if subparagraph (a)(i) applies, the taxable supply referred to in that subparagraph is deemed to have been made outside Canada.
Marginal note:Exception — certificate of registered owner
(3) For the purposes of this Part, if
(a) paragraphs (1)(a) to (c) apply to
(i) a taxable supply in respect of particular tangible personal property that is made by a registrant and is referred to in any of subparagraphs (1)(a)(i) to (iii), or
(ii) an acquisition by a registrant of physical possession of particular tangible personal property that is referred to in subparagraph (1)(a)(iv),
(b) the transfer referred to in paragraph (1)(b) of physical possession of the particular property is to a person (in this subsection referred to as the “consignee”) that is not entitled, under subsection (2), to give to the registrant a certificate described in paragraph (2)(d) in respect of that transfer,
(c) either
(i) the particular property is, immediately after the particular time referred to in paragraph (1)(b), property of a particular person that is registered under Subdivision D of Division V and that is neither the registrant nor the consignee, and the registrant retains a certificate that
(A) is given to the registrant by the particular person,
(B) states the particular person’s name and registration number assigned under section 241,
(C) acknowledges that the particular property is, immediately after the particular time, property of the particular person, and
(D) if the particular property was acquired by the particular person by way of sale from a non-resident person that is not registered under Subdivision D of Division V, acknowledges that the particular person is assuming liability to pay any amount that is or may become payable by the particular person under Division IV in respect of the particular property, or
(ii) a particular person, other than the registrant, that is registered under Subdivision D of Division V makes a taxable supply by way of sale of the particular property to the consignee before the particular time, the consignee is acquiring physical possession of the particular property at the particular time as the recipient of that taxable supply, and the registrant retains a certificate that
(A) is given to the registrant by the particular person, or by the consignee provided that the consignee is registered under Subdivision D of Division V,
(B) states the particular person’s name and registration number assigned under section 241,
(C) if the certificate is given by the consignee, states the consignee’s name and registration number assigned under section 241, and
(D) acknowledges that the particular person made a taxable supply by way of sale of the particular property to the consignee before the particular time and that the consignee acquired physical possession of the particular property at the particular time as the recipient of that taxable supply, and
(d) if subparagraph (1)(a)(i) applies, the property is delivered or made available to the particular person referred to in subparagraph (c)(i) or (ii), as the case may be, after the property is delivered or made available to the non-resident person referred to in subparagraph (1)(a)(i) under the agreement for the taxable supply referred to in that subparagraph,
the following rules apply:
(e) paragraphs (1)(d) to (g) do not apply to the taxable supply referred to in subparagraph (a)(i) or the acquisition referred to in subparagraph (a)(ii), as the case may be, and
(f) if subparagraph (a)(i) applies, the taxable supply referred to in that subparagraph is deemed to have been made outside Canada.
Marginal note:Exception — export
(4) For the purposes of this Part, if
(a) paragraphs (1)(a) and (c) apply to
(i) a taxable supply in respect of particular tangible personal property that is made by a registrant and is referred to in any of subparagraphs (1)(a)(i) to (iii), or
(ii) an acquisition by a registrant of physical possession of particular tangible personal property that is referred to in subparagraph (1)(a)(iv), and
(b) either
(i) the registrant
(A) causes physical possession of the particular property to be transferred at a place outside Canada,
(B) ships the particular property to a destination outside Canada that is specified in the contract for carriage of the particular property,
(C) causes physical possession of the particular property to be transferred to a common carrier or consignee that has been retained to ship the particular property to a destination outside Canada, or
(D) sends the particular property by mail or courier to an address outside Canada, or
(ii) the following conditions are met:
(A) the registrant causes physical possession of the particular property to be transferred at a place in Canada to a person (referred to in this subparagraph as the “exporter”) for export,
(B) after that transfer, the exporter exports the particular property as soon as is reasonable having regard to the circumstances surrounding the exportation and, if applicable, the normal business practices of the exporter and of the owner of the particular property,
(C) the particular property has not been acquired by any owner of the particular property for consumuption use or supply in Canada at any time after that transfer and before the property is exported,
(D) after that transfer but before the particular property is exported, the particular property is not further processed, transformed or altered except to the extent reasonably necessary or incidental to its transportation, and
(E) the registrant maintains evidence satisfactory to the Minister of the exportation of the particular property or, if the exporter is authorized under subsection 221.1(2), the exporter provides the registrant with a certificate in which the exporter certifies that the particular property will be exported in the circumstances described in clauses (B) to (D),
the following rules apply:
(c) paragraphs (1)(d) to (g) do not apply to the taxable supply referred to in subparagraph (a)(i) or the acquisition referred to in subparagraph (a)(ii), as the case may be, and
(d) if subparagraph (a)(i) applies, the taxable supply referred to in that subparagraph is deemed to have been made outside Canada.
Marginal note:Retention of possession
(5) If
(a) a particular registrant makes a particular taxable supply in Canada of particular tangible personal property by way of sale to a particular non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the particular property, and
(b) the particular registrant or another registrant has physical possession of the particular property at the particular time at which the particular property is delivered or made available to the particular non-resident person under the agreement for the particular taxable supply and retains physical possession of the particular property after the particular time
(i) solely for the purpose of transferring physical possession of the particular property to the particular non-resident person, a person (in this subsection referred to as a “subsequent purchaser”) that subsequently acquires ownership of the particular property or a person designated by the particular non-resident person or a subsequent purchaser,
(ii) for the purpose of making another taxable supply in Canada of a commercial service in respect of the particular property to the particular non-resident person or a subsequent purchaser,
(iii) for the purpose of making another taxable supply in Canada of a service of manufacturing or producing other tangible personal property to the particular non-resident person or to another non-resident person that is not registered under Subdivision D of Division V, if the particular non-resident person or the other non-resident person, as the case may be, is not a consumer of the other property and if the particular property
(iv) for the purpose of making another taxable supply in Canada of a commercial service in respect of other tangible personal property (other than property of a person that is resident in Canada) to the particular non-resident person or to another non-resident person that is not registered under Subdivision D of Division V, if the particular non-resident person or the other non-resident person, as the case may be, is not a consumer of the other property and if the particular property
(v) if subsection (9) does not apply in respect of the particular taxable supply, as the recipient of another supply of the particular property made by the particular non-resident person, by a subsequent purchaser or by a lessee or sub-lessee of a subsequent purchaser,
the following rules apply:
(c) if the particular registrant has physical possession of the particular property at the particular time,
(i) for the purposes of this Part, the particular taxable supply is deemed to have been made outside of Canada,
(ii) if any of subparagraphs (b)(i) to (iv) applies, the particular registrant is deemed for the purposes of this section
(A) except if clause (B) applies, to have acquired, at the particular time, physical possession of the particular property for the purpose of making a taxable supply in Canada to the particular non-resident person of a commercial service in respect of the particular property that is not a storage service, or
(B) if subparagraph (b)(ii) applies and the other taxable supply referred to in that subparagraph is to be made to the particular non-resident person or to a non-resident subsequent purchaser that is not registered under Subdivision D of Division V and is not a consumer of the particular property or if subparagraph (b)(iii) or (iv) applies, to have acquired, at the particular time, physical possession of the particular property for the purpose referred to in whichever of subparagraphs (b)(ii) to (iv) applies, and
(iii) if subparagraph (b)(v) applies, for the purposes of this section and the definition imported taxable supply in section 217,
(A) the particular registrant is deemed to have acquired physical possession of the particular property, as the recipient of the other supply referred to in that subparagraph, from another person that is a registrant,
(B) that acquisition of physical possession of the particular property is deemed to have occurred at the time when, and at the place where, the particular property is delivered or made available to the particular registrant under the agreement for that other supply, and
(C) the particular registrant is deemed to have given to the other person referred to in clause (A) a certificate described in paragraph (2)(d) in respect of that acquisition of physical possession of the particular property, and
(d) if another registrant has physical possession of the particular property at the particular time, for the purposes of this section and the definition imported taxable supply in section 217,
(i) if subparagraph (b)(i) applies and the other registrant gives to the particular registrant a certificate that contains the information set out in paragraph (2)(d) in respect of the particular property,
(A) the particular registrant is deemed to have caused, at the particular time, physical possession of the particular property to be transferred at a place in Canada to the other registrant,
(B) the other registrant is deemed to have acquired, at the particular time, physical possession of the particular property for the purpose of making a taxable supply in Canada to the particular non-resident person of a commercial service in respect of the particular property that is not a storage service, and
(C) the certificate is deemed to be a certificate described in paragraph (2)(d) in respect of the transfer referred to in clause (A) and the acquisition referred to in clause (B),
(ii) if any of subparagraphs (b)(ii) to (iv) applies,
(A) the particular registrant is deemed to have caused physical possession of the particular property to be transferred at a place in Canada to the other registrant,
(B) the other registrant is deemed to have acquired physical possession of the particular property from the particular registrant for the purpose referred to in whichever of those subparagraphs applies, and
(C) the particular registrant is deemed to have caused that transfer, and the other registrant is deemed to have so acquired physical possession of the particular property, at
(I) except if subclause (II) applies, the particular time, or
(II) if subparagraph (b)(ii) applies and the other taxable supply referred to in that subparagraph is to be made to a subsequent purchaser that is registered under Subdivision D of Division V, the time at which the particular property is delivered or made available to the subsequent purchaser, and
(iii) if subparagraph (b)(v) applies,
(A) the particular registrant is deemed to have caused physical possession of the particular property to be transferred to the other registrant,
(B) the other registrant is deemed to have acquired physical possession of the particular property from the particular registrant as the recipient of the other supply referred to in that subparagraph, and
(C) the particular registrant is deemed to have caused that transfer, and the other registrant is deemed to have so acquired physical possession of the particular property, at the time when, and at the place where, the particular property is delivered or made available to the other registrant under the agreement for that other supply.
Marginal note:Transfer of possession to bailee
(6) For the purposes of this section, section 180 and the definition imported taxable supply in section 217, if a registrant at a particular time transfers physical possession of tangible personal property to a bailee solely for the purpose of storing or shipping the property and if the bailee does not, at or before the particular time, give to the registrant a certificate described in paragraph (2)(d) in respect of the transfer of physical possession of the property, the following rules apply:
(a) if, under the agreement with the bailee for storing or shipping the property, the bailee is required to transfer physical possession of the property to another person, other than the registrant, that is named at the particular time in the agreement,
(i) the registrant is deemed not to have caused physical possession of the property to be transferred to the bailee and the bailee is deemed not to have acquired physical possession of the property,
(ii) the registrant is deemed to have caused physical possession of the property to be transferred to the other person at the particular time and at the place where physical possession of the property is transferred to the other person by the bailee,
(iii) the other person is deemed to have acquired physical possession of the property from the registrant for the purpose for which the other person is acquiring physical possession of the property from the bailee, and
(iv) that acquisition of physical possession of the property is deemed to have occurred at the particular time and at the place where physical possession of the property is transferred to the other person by the bailee; and
(b) if, under the agreement with the bailee for storing or shipping the property, the bailee is required to transfer physical possession of the property to the registrant or to another person (in this paragraph referred to as the “consignee”) that is to be identified after the particular time,
(i) the registrant is deemed to retain physical possession of the property, and the bailee is deemed not to have acquired physical possession of the property, throughout the period beginning at the particular time and ending at another time that is the earliest of
(A) the time at which the bailee transfers physical possession of the property to the registrant,
(B) the time at which the registrant gives to the consignee sufficient documentation to enable the consignee to require the bailee to transfer physical possession of the property to the consignee,
(C) the time at which the registrant directs the bailee in writing to transfer physical possession of the property to the consignee,
(D) the time at which the bailee transfers physical possession of the property to the consignee, and
(E) if the bailee is acquiring physical possession of the property for the purpose of storing the property, the time at which the bailee gives to the registrant a certificate that contains the information set out in paragraph (2)(d) in respect of the property, and
(ii) if the other time referred to in subparagraph (i) is
(A) described in any of clauses (i)(B) to (D),
(I) the registrant is deemed to have caused physical possession of the property to be transferred to the consignee at the other time and at the place where physical possession of the property is transferred to the consignee by the bailee,
(II) the consignee is deemed to have acquired physical possession of the property from the registrant for the purpose for which the consignee is acquiring physical possession of the property from the bailee, and
(III) that acquisition of physical possession of the property is deemed to have occurred at the other time and at the place where physical possession of the property is transferred to the consignee by the bailee, or
(B) described in clause (i)(E),
(I) the transfer of physical possession of the property by the registrant to the bailee, and the acquisition of physical possession of the property by the bailee from the registrant, are deemed to have occurred at the other time and not at the particular time, and
(II) the certificate referred to in that clause is deemed to be a certificate described in paragraph (2)(d) in respect of that transfer and that acquisition.
Marginal note:Goods transferred to bailee by non-resident
(7) For the purposes of this section, section 180 and the definition imported taxable supply in section 217, if a non-resident person that is not registered under Subdivision D of Division V transfers physical possession of tangible personal property to a bailee that is a registrant for the sole purpose of storing or shipping the property and if the bailee either is a carrier that is acquiring physical possession of the property for the sole purpose of shipping the property or does not claim an input tax credit in respect of the property, the bailee is deemed not to have acquired physical possession of the property.
Marginal note:Beginning of lease from unregistered non-resident
(8) For the purposes of this section and the definition imported taxable supply in section 217, if
(a) a registrant (in this subsection referred to as the “lessee”)
(i) is the recipient of a particular taxable supply of tangible personal property made by way of lease, licence or similar arrangement by a particular non-resident person that is not registered under Subdivision D of Division V, and
(ii) is not deemed under clause (9)(c)(ii)(A) or subparagraph (9)(d)(ii) to have acquired physical possession of the property as the recipient of the particular taxable supply,
(b) either
(i) immediately before the particular time at which the property is delivered or made available to the lessee under the agreement for the particular taxable supply, another registrant has possession or use of the property as the recipient of another taxable supply of the property made by way of lease, licence or similar arrangement by the particular non-resident person or by another non-resident person that is not registered under Subdivision D of Division V, or
(ii) the following conditions are met:
(A) subparagraph (i) does not apply,
(B) another registrant has physical possession of the property immediately after the particular time, and
(C) the lessee did not have possession or use of the property immediately before the particular time as the recipient of another taxable supply of the property made by way of lease, licence or similar arrangement by the particular non-resident person or by another non-resident person that is not registered under Subdivision D of Division V, and
(c) it is not the case that a person that is a registrant acquired physical possession of the property before the particular time for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the particular non-resident person or to another non-resident person that is not registered under Subdivision D of Division V and continues to retain physical possession of the property until a time that is after the particular time,
the following rules apply:
(d) the other registrant referred to in subparagraph (b)(i) or (ii), as the case may be, is deemed to have caused physical possession of the property to be transferred to the lessee at the particular time and at the place where the property is delivered or made available to the lessee under the agreement for the particular taxable supply,
(e) the lessee is deemed to have acquired physical possession of the property from the other registrant as the recipient of the particular taxable supply, and
(f) that acquisition of physical possession of the property is deemed to have occurred at the particular time and at the place where the property is delivered or made available to the lessee under the agreement for the particular taxable supply.
Marginal note:Lease subsequent to sale
(9) If
(a) a particular registrant makes a particular taxable supply in Canada of tangible personal property by way of sale to a particular non-resident person that is not registered under Subdivision D of Division V and is not a consumer of the property, and
(b) at the particular time at which the property is delivered or made available to the particular non-resident person under the agreement for the particular taxable supply, the particular registrant or another registrant is, or is intended to be, the recipient of another supply of the property made by way of lease, licence or similar arrangement by the particular non-resident person or by another non-resident person that is not registered under Subdivision D of Division V,
the following rules apply:
(c) if the particular registrant is, or is intended to be, at the particular time the recipient of the other supply,
(i) for the purposes of this Part, the particular taxable supply is deemed to have been made outside of Canada,
(ii) for the purposes of this section and the definition imported taxable supply in section 217,
(A) the particular registrant is deemed to have acquired physical possession of the property, as the recipient of the other supply, from another person that is a registrant,
(B) that acquisition of physical possession of the property is deemed to have occurred at the time when, and at the place where, the property is delivered or made available to the particular registrant under the agreement for the other supply, and
(C) the particular registrant is deemed to have given to the other person referred to in clause (A) a certificate described in paragraph (2)(d) in respect of that acquisition of physical possession of the property, and
(d) if another registrant is, or is intended to be, at the particular time the recipient of the other supply, for the purposes of this section and the definition imported taxable supply in section 217,
(i) the particular registrant is deemed to have caused physical possession of the property to be transferred to the other registrant,
(ii) the other registrant is deemed to have acquired physical possession of the property, as the recipient of the other supply, from the particular registrant, and
(iii) the particular registrant is deemed to have caused that transfer, and the other registrant is deemed to have so acquired physical possession of the property, at the time when, and at the place where, the property is delivered or made available to the other registrant under the agreement for the other supply.
Marginal note:Deemed possession during lease
(10) For the purposes of this section and the definition imported taxable supply in section 217, if a registrant (in this subsection referred to as the “lessee”) acquires — as the recipient of a particular taxable supply of tangible personal property made by way of lease, licence or similar arrangement by a particular non-resident person that is not registered under Subdivision D of Division V — physical possession of the property at a particular time and either
(a) gives a certificate described in paragraph (2)(d) in respect of that acquisition of physical possession of the property, or
(b) claims an input tax credit in respect of tax that is deemed to have been paid or payable by the lessee under subsection 178.8(2) or paragraph 180(d) in respect of the property,
the lessee is deemed to retain physical possession of the property at all times throughout the period that begins at the particular time and ends at the earliest of
(c) the time at which the lessee causes physical possession of the property to be transferred to another registrant that
(i) is acquiring physical possession of the property for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the particular non-resident person or to another non-resident person that is not registered under Subdivision D of Division V, and
(ii) retains physical possession of the property during a part of the period during which possession or use of the property is provided to the lessee under the arrangement,
(d) the time at which the lessee causes physical possession of the property to be transferred to the particular non-resident person or to another non-resident person that is not registered under Subdivision D of Division V, and
(e) the time at which the lessee causes physical possession of the property to be transferred to a person that is not referred to in paragraph (c) or (d), if that time is not included in
(i) the period during which possession or use of the property is provided to the lessee under the arrangement, or
(ii) another period during which the lessee has possession or use of the property as the recipient of another taxable supply of the property made by way of lease, licence or similar arrangement by the particular non-resident person or by another non-resident person that is not registered under Subdivision D of Division V.
Marginal note:Possession by service provider during lease
(11) For the purposes of this section and the definition imported taxable supply in section 217, if
(a) a registrant (in this subsection referred to as the “lessee”) is the recipient of a particular taxable supply of tangible personal property made by way of lease, licence or similar arrangement by a particular non-resident person that is not registered under Subdivision D of Division V,
(b) another registrant acquires physical possession of the property at a particular time for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the particular non-resident person or to another non-resident person that is not registered under Subdivision D of Division V, and
(c) the other registrant retains physical possession of the property during a part of the particular period during which possession or use of the property is provided to the lessee under the arrangement,
the following rules apply:
(d) if a third person other than the lessee causes physical possession of the property to be transferred to the other registrant at the particular time, if the particular time is during the particular period and if the third person is not a registrant that acquires and retains physical possession of the property in the circumstances described in paragraphs (b) and (c),
(i) the third person is deemed not to have caused that transfer of physical possession of the property, and
(ii) the lessee is deemed to have caused, at the particular time, physical possession of the property to be transferred to the other registrant at the place where the other registrant acquires physical possession of the property, and
(e) if the other registrant causes, at a later time that is after the particular time but during the particular period, physical possession of the property to be transferred at a particular place to a third person other than the lessee and the third person is not a registrant that acquires and retains physical possession of the property in the circumstances described in paragraphs (b) and (c),
(i) the other registrant is deemed to have caused, at the later time, physical possession of the property to be transferred to the lessee at the particular place,
(ii) the lessee is deemed to have acquired physical possession of the property as the recipient of the particular taxable supply at the later time and at the place where the property is delivered or made available to the lessee under the arrangement, and
(iii) the other registrant is deemed not to have caused physical possession of the property to be transferred to the third person, and the third person is deemed not to have acquired physical possession of the property.
Marginal note:End of lease period
(12) For the purposes of this section and the definition imported taxable supply in section 217, if
(a) a registrant (in this subsection referred to as the “lessee”) is the recipient of a particular taxable supply of tangible personal property made by way of lease, licence or similar arrangement by a particular non-resident person that is not registered under Subdivision D of Division V,
(b) a particular person other than the lessee has physical possession of the property immediately after the particular time that is at the end of the period during which possession or use of the property is provided to the lessee under the arrangement,
(c) if the particular person is a registrant, the particular person did not acquire physical possession of the property before the particular time for the purpose of making a taxable supply in Canada of a commercial service in respect of the property to the particular non-resident person or to another non-resident person that is not registered under Subdivision D of Division V,
(d) the lessee does not retain possession or use of the property after the particular time as the recipient of a taxable supply of the property made by way of lease, licence or similar arrangement by the particular non-resident person or by another non-resident person that is not registered under Subdivision D of Division V, and
(e) another registrant does not have possession or use of the property immediately after the particular time as the recipient of a taxable supply of the property made by way of lease, licence or similar arrangement by the particular non-resident person or by another non-resident person that is not registered under Subdivision D of Division V,
the following rules apply:
(f) the lessee is deemed to have caused, at the particular time, physical possession of the property to be transferred to the particular person at the place where the particular person has physical possession of the property immediately after the particular time,
(g) if the particular person is a registrant and has physical possession of the property immediately after the particular time as the recipient of a supply referred to in subparagraph (2)(c)(i), the particular person is deemed to have acquired, at the particular time and at the place referred to in paragraph (f), physical possession of the property as the recipient of that supply, and
(h) if the particular person is a registrant and has physical possession of the property immediately after the particular time for the purpose of making a supply referred to in any of subparagraphs (2)(c)(ii) to (iv), the particular person is deemed to have acquired, at the particular time and at the place referred to in paragraph (f), physical possession of the property for that purpose.
Marginal note:Use of railway rolling stock
(13) For the purpose of clause (4)(b)(ii)(C), if the only use of railway rolling stock after physical possession of it is transferred as described in that clause and before it is next exported is for the purpose of transporting tangible personal property or passengers in the course of that exportation and that exportation occurs within 60 days after the day on which the transfer takes place, that use of the rolling stock is deemed to take place entirely outside Canada.
(15) Subsections (1) to (3), (6) to (8), (12) and (13) apply in respect of supplies made after July 22, 2016.
(16) Subsections (4) and (9) to (11) apply in respect of
(17) Subsection (5) applies in respect of supplies made before July 23, 2016 in respect of which no amount is charged, collected or remitted as or on account of tax under Part IX of the Act.
(18) Subsection (14) applies in respect of supplies made after the day on which this Act receives royal assent.
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