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

Marginal note:Meaning of administration or enforcement of this Act

3 For greater certainty, a reference in this Act to the administration or enforcement of this Act includes the collection of any amount payable under this Act.

Marginal note:Person resident in Canada

4 For the purposes of Division 2 of Part 2 and paragraph 21(6)(e), a person is deemed to be resident in Canada at any time

• (a) in the case of a corporation, if the corporation is incorporated or continued in Canada and not continued elsewhere;

• (b) in the case of a partnership, a joint venture, an unincorporated society, a club, an association or an organization, or a branch thereof, if the member or participant, or a majority of the members or participants, having management and control thereof is or are resident in Canada at that time;

• (c) in the case of a labour union, if the labour union is carrying on activities as such in Canada and has a local union or branch in Canada at that time; and

• (d) in the case of an individual, if the individual is deemed under any of paragraphs 250(1)(b) to (f) of the Income Tax Act to be resident in Canada at that time.

Marginal note:Arm’s length

• 5 (1) For the purposes of this Act

  • (a) related persons are deemed not to deal with each other at arm’s length;

  • (b) associated persons are deemed not to deal with each other at arm’s length; and

  • (c) it is a question of fact whether persons not related to, or not associated with, each other are, at any particular time, dealing with each other at arm’s length.

• Marginal note:Related persons

  (2) For the purposes of this Act, persons are related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act, except that

  • (a) a reference in those subsections to “corporation” is to be read as a reference to “corporation or partnership”; and

  • (b) a reference in those subsections to “shares of the capital stock of a corporation” or “shareholders” is, in respect of a partnership, to be read as a reference to “rights in a partnership” or “partners”, respectively.

• Marginal note:Related persons — partnership

  (3) For the purposes of this Act, a member of a partnership is deemed to be related to the partnership.

• Marginal note:Associated persons

  (4) A particular corporation is associated with another corporation for the purposes of this Act if, by reason of subsections 256(1) to (6) of the Income Tax Act, the particular corporation is associated with the other corporation for the purposes of that Act.

• Marginal note:Corporations controlled by same person or group

  (5) A person other than a corporation is associated with a particular corporation for the purposes of this Act if the particular corporation is controlled by the person or by a group of persons of which the person is a member and each of whom is associated with each of the others.

• Marginal note:Partnership or trust

  (6) For the purposes of this Act, a person is associated with

  • (a) a partnership if the total of the shares of the profits of the partnership to which the person and all other persons who are associated with the person are entitled is more than half of the total profits of the partnership, or would be more than half of the total profits of the partnership if it had profits; and

  • (b) a trust if the total of the values of the interests in the trust of the person and all other persons who are associated with the person is more than half of the total value of all interests in the trust.

• Marginal note:Association with third person

  (7) For the purposes of this Act, a person is associated with another person if each of them is associated with the same third person.

• Marginal note:Associated persons — partnership

  (8) For the purposes of this Act, a member of a partnership is deemed to be associated with the partnership.

Marginal note:Negative amounts

6 Except as specifically otherwise provided, if an amount or a number is required under this Act to be determined or calculated by or in accordance with an algebraic formula and the amount or number when so determined or calculated would, in the absence of this section, be a negative amount or number, it is deemed to be zero.

Marginal note:Sale — subject item

• 7 (1) For the purposes of this Act, a vendor sells a subject item to a purchaser if

  • (a) the vendor transfers ownership of the subject item to the purchaser by way of sale under an agreement; and

  • (b) the subject item is delivered or made available in Canada in relation to the agreement.

• Marginal note:Partial ownership

  (2) For the purposes of this Act, a particular person transfers ownership of a subject item to another person even if, at the time ownership is transferred to the other person, the particular person retains partial ownership or transfers partial ownership to any third person.

• Marginal note:Security interest — not a sale

  (3) For the purposes of this Act and despite subsection (1), if, under an agreement entered into in respect of a debt or obligation, a person transfers a subject item or an interest in a subject item for the purpose of securing payment of the debt or performance of the obligation, the transfer is deemed not to be a sale of the subject item and the transferee is deemed not to be an owner of the subject item only because of the transfer, and if, on payment of the debt or performance of the obligation or the forgiveness of the debt or obligation, the subject item or interest is retransferred, the retransfer of the subject item or interest is deemed not to be a sale of a subject item.

• Marginal note:When sale completed

  (4) Subject to subsection (5), for the purposes of this Act, the sale of a subject item to a purchaser is completed at the earlier of

  • (a) the time at which possession of the subject item is transferred to the purchaser or to another person, and

  • (b) the time at which ownership of the subject item is transferred to the purchaser.

• Marginal note:When sale completed — regulations

  (5) For the purposes of this Act, if prescribed conditions are met in respect of the sale of a subject item to a purchaser, the sale is completed at the prescribed time.

• Marginal note:Deemed sale

  (6) For the purposes of this Act, except if prescribed circumstances exist, if ownership of a subject item is transferred in any manner otherwise than by way of sale from a particular person to another person and if the subject item is delivered or made available in Canada, the following rules apply:

  • (a) the particular person is deemed to sell the subject item to the other person;

  • (b) the particular person is deemed to be the vendor in respect of the sale and the other person is deemed to be the purchaser in respect of the sale;

  • (c) the sale is deemed to be completed at the earlier of the time at which the possession of the subject item is transferred and the time at which ownership of the subject item is transferred; and

  • (d) the value of the consideration paid for the sale of the subject item is deemed to be equal to the total of

    • (i) the retail value of the subject item at the time at which the sale is completed as determined under paragraph (c), and

    • (ii) a prescribed amount.

Marginal note:Improvement to subject item

• 8 (1) Subject to subsection (2), for the purposes of this Act, an improvement in respect of a subject item is the provision of property or a service in any manner, including by way of sale, transfer, barter, exchange, licence, rental, lease, gift or disposition, that is a provision of

  • (a) tangible personal property that is installed in or on, or is affixed to, the subject item;

  • (b) a service that modifies the subject item and is physically performed in respect of the subject item; or

  • (c) a prescribed property or service.

• Marginal note:Excluded improvements

  (2) For the purposes of this Act, the provision of property or a service is deemed not to be an improvement in respect of a subject item if it is

  • (a) the provision of a repair, cleaning or maintenance service in respect of the subject item;

  • (b) the provision of tangible personal property to replace other tangible personal property that is a part of the subject item and that is damaged, defective or non-functioning;

  • (c) in the case of a subject vehicle,

    • (i) the provision of tangible personal property that is, or a service that is in respect of,

      • (A) a child safety seating system or a child safety restraint system, or

      • (B) a trailer or camper, or

    • (ii) the provision of tangible personal property or a service that specially equips or adapts the subject vehicle

      • (A) for its use by or in transporting an individual using a wheelchair, or

      • (B) with an auxiliary driving control to facilitate the operation of the vehicle by an individual with a disability; or

  • (d) the provision of a prescribed property or service.

• Marginal note:When improvement completed

  (3) Subject to subsection (4), for the purposes of this Act, an improvement in respect of a subject item is completed at

  • (a) if the improvement is the provision of tangible personal property that is installed in or on, or is affixed to, the subject item, the time at which the installation of the tangible personal property is physically completed; and

  • (b) if the improvement is the provision of a service that is physically performed in respect of the subject item, the time at which the performance of the service is physically completed.

• Marginal note:When improvement completed — regulations

  (4) For the purposes of this Act, if prescribed conditions are met in respect of an improvement in respect of a subject item, the improvement is completed at the prescribed time.

Marginal note:Price threshold

9 For the purposes of this Act, the price threshold in respect of a subject item is

• (a) in the case of a subject vehicle, $100,000;

• (b) in the case of a subject aircraft, $100,000; and

• (c) in the case of a subject vessel, $250,000.

Marginal note:Definition of business

• 10 (1) For the purposes of this section, a business includes a profession, calling, trade, manufacture or undertaking of any kind whatever and any activity engaged in on a regular or continuous basis that involves the provision of property by way of lease, licence or similar arrangement, but does not include an office or employment.

• Marginal note:Where flights originate and terminate

  (2) For the purposes of this section, a flight of a subject aircraft originates at the location of the take-off, as that term is defined in subsection 101.01(1) of the Canadian Aviation Regulations, of the subject aircraft and terminates at the location of the landing, as that term is defined in that subsection, of the subject aircraft.

• Marginal note:Qualifying flight

  (3) For the purposes of this section, except if prescribed circumstances exist, a subject aircraft is used for a flight that is a qualifying flight if

  • (a) the purpose of the flight is to provide

    • (i) a scheduled service, as defined in subsection 3(1) of the Transportation Information Regulations,

    • (ii) an air ambulance service,

    • (iii) an aerial fire fighting service,

    • (iv) an aerial forest fire management service,

    • (v) an aerial search and rescue operation,

    • (vi) an aerial transportation service for the retrieval and transportation of organs for human transplant,

    • (vii) an aerial weather altering service,

    • (viii) an aerial survey service,

    • (ix) an aerial construction service,

    • (x) an aerial spraying or spreading service,

    • (xi) an air flight training service, or

    • (xii) for the carriage of goods only;

  • (b) it is the case that

    • (i) all or substantially all of the passenger seats on the flight are offered for sale on a seat-by-seat basis to the general public, and

    • (ii) all or substantially all of the passengers on the flight are individuals that deal at arm’s length with

      • (A) the person that operates the subject aircraft for the flight,

      • (B) each person that is an owner of the subject aircraft, and

      • (C) in cases where one or more of those passenger seats are offered for sale by a person other than a person referred to in clause (A) or (B), that other person;

  • (c) the flight originates or terminates in a remote community listed in the schedule;

  • (d) the flight is conducted in the course of a business of an owner of the subject aircraft (other than a business without a reasonable expectation of profit) and otherwise than for the leisure, recreation, sport or other enjoyment of

    • (i) an owner of the subject aircraft,

    • (ii) a guest of an owner of the subject aircraft on the subject aircraft, or

    • (iii) another person that has the right to use the subject aircraft under a lease, licence or similar arrangement or a guest of the other person on the subject aircraft; or

  • (e) prescribed circumstances exist.

• Marginal note:Qualifying subject aircraft

  (4) For the purposes of this Act, except in prescribed circumstances, a subject aircraft is a qualifying subject aircraft of a person at a particular time that is on a particular day if the person is an owner of the subject aircraft at the particular time and the amount determined by the following formula is greater than or equal to 0.9:

  (A + B + C) / (D + E + F)

  where

  A

  is

  • (a) if the particular time is the time at which the person acquires ownership of the subject aircraft, zero, and

  • (b) in any other case, the total of all amounts, each of which is a duration of time that the subject aircraft was used for a flight that was a qualifying flight and that originated or terminated at a location in Canada during the period that ends on the particular day and begins on the later of

    • (i) the day on which the person became an owner of the subject aircraft, and

    • (ii) the day that is one year before the particular day;

  B

  is the total of all amounts, each of which is a duration of time for which it can reasonably be expected that the subject aircraft will be used for a flight

  • (a) that is a qualifying flight,

  • (b) that originates or terminates at a location in Canada during the period that begins on the day after the particular day and that ends on the day that is one year after the particular day, and

  • (c) throughout which the person is an owner of the subject aircraft;

  C

  is a prescribed amount;

  D

  is

  • (a) if the particular time is the time at which the person acquires ownership of the subject aircraft, zero, and

  • (b) in any other case, the total of all amounts, each of which is a duration of time that the subject aircraft was used for a flight that originated or terminated at a location in Canada during the period that ends on the particular day and begins on the later of

    • (i) the day on which the person acquired ownership of the subject aircraft, and

    • (ii) the day that is one year before the particular day;

  E

  is the total of all amounts, each of which is a duration of time for which it can reasonably be expected that the subject aircraft will be used for a flight

  • (a) that originates or terminates at a location in Canada during the period that begins on the day after the particular day and that ends on the day that is one year after the particular day, and

  • (b) throughout which the person is an owner of the subject aircraft; and

  F

  is a prescribed amount.

• Marginal note:Qualifying subject aircraft — regulations

  (5) For the purposes of this Act, a subject aircraft is a qualifying subject aircraft of a person at any time if prescribed conditions are met.