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

Marginal note:Tax — lease of subject vehicle

• 24 (1) Subject to this Act, if a registered vendor in respect of subject vehicles is an owner of a subject vehicle, if the registered vendor provides the right to use the subject vehicle to another person under a lease, licence or similar arrangement, if the subject vehicle has not previously been registered with the Government of Canada or a province otherwise than in connection with the lease, licence or similar arrangement and if the taxable amount of the subject vehicle exceeds the price threshold in respect of the subject vehicle, the registered vendor must pay to Her Majesty in right of Canada tax in respect of the subject vehicle in the amount determined under section 34.

• Marginal note:When tax payable

  (2) The tax under subsection (1) becomes payable at the time at which the other person first has the right to use the subject item under the lease, licence or similar arrangement.

• Marginal note:Tax not payable

  (3) The tax under subsection (1) in respect of a subject vehicle that is owned by a registered vendor and in respect of which the right to use the subject item is provided to another person under a lease, licence or similar arrangement is not payable if

  • (a) the subject vehicle is equipped for policing activities and

    • (i) the other person is a police authority or military authority,

    • (ii) the other person has the right to use the subject item for a period of at least six months under the lease, licence or similar arrangement,

    • (iii) the registered vendor transfers possession of the subject vehicle to the other person under the lease, licence or similar arrangement, and

    • (iv) the registered vendor retains evidence satisfactory to the Minister that the conditions in subparagraphs (i) to (iii) are met in respect of the subject item; or

  • (b) the subject vehicle is equipped for military activities and

    • (i) the other person is a military authority,

    • (ii) the other person has the right to use the subject item for a period of at least six months under the lease, licence or similar arrangement,

    • (iii) the registered vendor transfers possession of the subject vehicle to the other person under the lease, licence or similar arrangement, and

    • (iv) the registered vendor retains evidence satisfactory to the Minister that the conditions in subparagraphs (i) to (iii) are met in respect of the subject item.

• Marginal note:Taxable amount

  (4) Subject to subsection (5), the taxable amount of a subject vehicle that is owned by a registered vendor and in respect of which the right to use the subject item is provided to another person under a lease, licence or similar arrangement is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B

  where

  A

  is the greater of

  • (a) the retail value of the subject vehicle at the time at which possession of the subject vehicle is first transferred to the other person under the lease, licence or similar arrangement, and

  • (b) the retail value of the subject vehicle at the time at which the other person first has the right to use the subject vehicle under the lease, license or similar arrangement; and

  B

  is a prescribed amount.

• Marginal note:Taxable amount — regulations

  (5) For the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the taxable amount of a subject item in prescribed circumstances is to be determined in prescribed manner.

Marginal note:Tax — lease of aircraft or vessel

• 25 (1) Subject to this Act, if a particular person is an owner of a subject item that is a subject aircraft or subject vessel, if the particular person provides the right to use the subject item to another person under a lease, licence or similar arrangement and if the taxable amount of the subject item exceeds the price threshold in respect of the subject item, the particular person must pay to Her Majesty in right of Canada tax in respect of the subject item in the amount determined under section 34.

• Marginal note:When tax payable

  (2) The tax under subsection (1) becomes payable at the time at which the other person first has the right to use the subject item under the lease, licence or similar arrangement.

• Marginal note:Tax not payable

  (3) The tax under subsection (1) in respect of a subject item that is owned by a particular person and in respect of which the right to use the subject item is provided to another person under a lease, licence or similar arrangement is not payable if, at the time at which the other person first has the right to use the subject item under a lease, licence or similar arrangement

  • (a) in the case of a subject vessel (other than a select subject vessel), the subject item is a qualifying subject vessel of the particular person;

  • (b) in the case of a subject aircraft,

    • (i) the subject item is a qualifying subject aircraft of the particular person,

    • (ii) each person that is an owner of the subject item is a qualifying aircraft user, or

    • (iii) the other person is a qualifying aircraft user; or

  • (c) a tax certificate in respect of the subject item is in effect in accordance with section 37.

• Marginal note:Taxable amount

  (4) Subject to subsection (5), the taxable amount of a subject item that is owned by a particular person and in respect of which the right to use the subject item is provided to another person under a lease, licence or similar arrangement is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B

  where

  A

  is the greater of

  • (a) the retail value of the subject item at the time at which possession of the subject item is first transferred to the other person under the lease, licence or similar arrangement, and

  • (b) the retail value of the subject item at the time at which the other person first has the right to use the subject item under the lease, license or similar arrangement; and

  B

  is a prescribed amount.

• Marginal note:Taxable amount — regulations

  (5) For the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the taxable amount of a subject item in prescribed circumstances is to be determined in prescribed manner.

Marginal note:Tax — use of aircraft or vessel

• 26 (1) Subject to this Act, if a person is an owner at a particular time of a subject item that is a subject aircraft or subject vessel, if the subject item is used in Canada at the particular time and if the taxable amount of the subject item exceeds the price threshold in respect of the subject item, the person must pay to Her Majesty in right of Canada tax in respect of the subject item in the amount determined under section 34.

• Marginal note:When tax payable

  (2) The tax under subsection (1) becomes payable at the particular time referred to in that subsection.

• Marginal note:Tax not payable

  (3) The tax under subsection (1) in respect of a subject item that is used in Canada by a person at a particular time is not payable if

  • (a) in the case of a subject vessel (other than a select subject vessel), the subject item is a qualifying subject vessel of the person at the particular time;

  • (b) the person is a registered vendor in respect of that type of subject item and the use of the subject item by the person is reasonably necessary or incidental to the manufacture, offering for sale or transportation of the subject item;

  • (c) in the case of a subject aircraft, at the particular time

    • (i) the subject item is a qualifying subject aircraft, or

    • (ii) each person that is an owner of the subject aircraft is a qualifying aircraft user;

  • (d) a tax certificate in respect of the subject item is in effect at the particular time in accordance with section 37;

  • (e) the person imported the subject item before the particular time and tax under section 20 in respect of the importation was not payable by the person because of the application of subsection 21(6); or

  • (f) tax in respect of the subject item became payable under section 27 or 28 by the person at or before the particular time.

• Marginal note:Taxable amount

  (4) Subject to subsection (5), the taxable amount of a subject item that is used in Canada at a particular time is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B

  where

  A

  is the retail value of the subject item at the particular time; and

  B

  is a prescribed amount.

• Marginal note:Taxable amount — regulations

  (5) For the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the taxable amount of a subject item in prescribed circumstances is to be determined in prescribed manner.

Marginal note:Tax — ceasing to be registered vendor

• 27 (1) Subject to this Act, if a person ceases to be a registered vendor in respect of a type of subject item at a particular time, if the person is an owner of a subject item of that type at the particular time and if the taxable amount of the subject item exceeds the price threshold in respect of the subject item, the person must pay to Her Majesty in right of Canada tax in respect of the subject item in the amount determined under section 34.

• Marginal note:When tax payable

  (2) The tax under subsection (1) becomes payable at the particular time referred to in that subsection.

• Marginal note:Tax not payable

  (3) The tax under subsection (1) in respect of a subject item that is owned by a person at the particular time at which the person ceases to be a registered vendor in respect of that type of subject item is not payable if

  • (a) in the case of a subject vehicle, the subject item was registered with the Government of Canada or a province before the particular time;

  • (b) in the case of a subject aircraft,

    • (i) if the person is the only owner of the subject aircraft, the person is a qualifying aircraft user at the particular time, and

    • (ii) in any other case, each person that is an owner of the subject aircraft is a qualifying aircraft user at the particular time;

  • (c) in the case of a subject aircraft or subject vessel (other than a select subject vessel), the subject item is a qualifying subject aircraft or qualifying subject vessel of the person at the particular time; or

  • (d) in the case of a subject aircraft or subject vessel, a tax certificate in respect of the subject item is in effect at the particular time in accordance with section 37.

• Marginal note:Taxable amount

  (4) Subject to subsection (5), the taxable amount of a subject item owned by a person is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B

  where

  A

  is the retail value of the subject item at the time at which the person ceases to be a registered vendor in respect of that type of subject item; and

  B

  is a prescribed amount.

• Marginal note:Taxable amount — regulations

  (5) For the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the taxable amount of a subject item in prescribed circumstances is to be determined in prescribed manner.

Marginal note:Tax — ceasing to be qualifying aircraft user

• 28 (1) Subject to this Act, if a person ceases to be a qualifying aircraft user at a particular time, if the person is an owner of a subject aircraft at the particular time and if the taxable amount of the subject aircraft exceeds the price threshold in respect of the subject aircraft, the person must pay to Her Majesty in right of Canada tax in respect of the subject aircraft in the amount determined under section 34.

• Marginal note:When tax payable

  (2) The tax under subsection (1) becomes payable at the particular time referred to in that subsection.

• Marginal note:Tax not payable

  (3) The tax under subsection (1) in respect of a subject aircraft that is owned by a person at the particular time at which the person ceases to be a qualifying aircraft user is not payable if

  • (a) the subject aircraft is a qualifying subject aircraft of the person at the particular time; or

  • (b) a tax certificate in respect of the subject aircraft is in effect at the particular time in accordance with section 37.

• Marginal note:Taxable amount

  (4) Subject to subsection (5), the taxable amount of a subject aircraft owned by a person is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B

  where

  A

  is the retail value of the subject aircraft at the time at which the person ceases to be a qualifying aircraft user; and

  B

  is a prescribed amount.

• Marginal note:Taxable amount — regulations

  (5) For the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the taxable amount of a subject item in prescribed circumstances is to be determined in prescribed manner.

SUBDIVISION DTax on Improvements

Marginal note:Rules — improvement after sale

• 29 (1) Subject to section 31, for the purposes of this section and for the purposes of determining under section 35 the amount of tax payable under this section, if a vendor sells a subject item to a particular purchaser, the following rules apply:

  • (a) the improvement period in respect of the subject item is the period that begins on the day that an agreement for the sale is entered into and ends on

    • (i) if the subject item is subsequently sold to a person that deals at arm’s length with the particular purchaser and if the sale to the person is completed on a particular day that is before the day that is one year after the day on which the sale to the particular purchaser is completed, the particular day, and

    • (ii) in any other case, the day that is one year after the day on which the sale to the particular purchaser is completed;

  • (b) the unimproved taxable amount of the subject item is equal to the taxable amount of the subject item as determined under section 18 in respect of the sale to the particular purchaser; and

  • (c) the net improvement amount of the subject item is equal to the total of all amounts, each of which is the value of the consideration for an improvement in respect of the subject item that is completed at any time during the improvement period in respect of the subject item but only to the extent that the value of the consideration is not included in the determination of the unimproved taxable amount of the subject item.

• Marginal note:Tax — improvement after sale

  (2) Subject to this Act, a person must pay to Her Majesty in right of Canada tax in respect of a subject item in the amount determined under section 35 if

  • (a) a vendor sells the subject item to the person and tax in respect of the subject item becomes payable under section 18; and

  • (b) the net improvement amount of the subject item is greater than or equal to $5,000.

• Marginal note:When tax payable

  (3) The tax under subsection (2) in respect of a subject item becomes payable at the beginning of the day following the day on which the improvement period in respect of the subject item ends.