New Harmonized Value-added Tax System Regulations (SOR/2010-117)

DIVISION 3Transition

Marginal note:Net tax

• 40 (1) If a person collects, before July 1, 2010, a particular amount as or on account of tax (other than tax under subsection 165(1) of the Act) in respect of a supply, calculated on an amount of consideration for the supply that is deemed, under this Part, to have become due on July 1, 2010 and not to have been paid before that day, for the purpose of determining the net tax of the person under subsection 225(1) of the Act, the particular amount is deemed to have been collected by the person on July 1, 2010 and not to have been collected before that day.

• Marginal note:Input tax credits and rebates

  (2) If a person pays, before July 1, 2010, a particular amount as or on account of tax (other than tax under subsection 165(1) or section 218 of the Act) in respect of a supply, calculated on an amount of consideration for the supply that is deemed, under this Part, to have become due on July 1, 2010 and not to have been paid before that day, for the purpose of determining an input tax credit or rebate of the person under Part IX of the Act, the particular amount is deemed to have been paid by the person on July 1, 2010 and not to have been paid before that day.

• Marginal note:Continuous supply

  (3) For the purposes of this Part, if property or a service is delivered, performed or made available on a continuous basis by means of a wire, pipeline, satellite, other conduit or other telecommunications facility during a period that includes July 1, 2010 and for which the supplier issues an invoice and, because of the method of recording the delivery of the property or the provision of the service, the time at which the property is delivered, or the service is provided, cannot reasonably be determined, an equal part of the whole of the property delivered, or of the whole of the service provided, during the period is deemed to have been delivered or provided, as the case may be, on each day of the period.

Marginal note:Transfer of tangible personal property before July 2010

• 41 (1) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply by way of sale of tangible personal property made in a specified province to a person to the extent that

  • (a) the property is delivered to the person before July 1, 2010; or

  • (b) ownership of the property is transferred to the person before July 1, 2010.

• Marginal note:Imported taxable supply

  (2) No tax is payable under subsection 218.1(1) of the Act in respect of any consideration for an imported taxable supply (as defined in section 217 of the Act) of tangible personal property made to a person if

  • (a) the property is delivered or made available to the person in a specified province before July 1, 2010; or

  • (b) physical possession of the property is transferred to the person in a specified province before July 1, 2010.

• Marginal note:Consideration due or paid after April 2010

  (3) For the purpose of applying subsection 165(2) of the Act to a taxable supply by way of sale of tangible personal property made in a specified province, any consideration for the supply that becomes due, or is paid without having become due, on or after May 1, 2010 and before July 1, 2010, in respect of property that is not delivered to the recipient, and the ownership of which is not transferred to the recipient, before July 1, 2010, is deemed to have become due on July 1, 2010 and not to have been paid before that day.

• Marginal note:Consideration due or paid after April 2010

  (4) For the purpose of applying subsection 218.1(1) of the Act to a taxable supply by way of sale of tangible personal property made outside Canada to a person to which the property is delivered or made available, or physical possession of the property is transferred, in a specified province, any consideration for the supply that becomes due, or is paid without having become due, on or after May 1, 2010 and before July 1, 2010, in respect of property that is not delivered or made available to the person, or the physical possession of which is not transferred to the person, as the case may be, before July 1, 2010, is deemed to have become due on July 1, 2010 and not to have been paid before that day.

• Marginal note:Consideration due or paid before May 2010

  (5) Subject to subsection (7), if an amount of consideration for a taxable supply by way of sale of tangible personal property made in a specified province by a registrant to a person that is not a consumer of the tangible personal property becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and neither ownership nor possession of the tangible personal property is transferred to the person before July 1, 2010, for the purposes of applying subsection 165(2) of the Act to the supply, that amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required to pay, in accordance with subsection (8), the tax under subsection 165(2) of the Act payable in respect of the supply on that amount of consideration.

• Marginal note:Consideration due or paid before May 2010

  (6) Subject to subsection (7), if an amount of consideration for a taxable supply by way of sale of tangible personal property made outside Canada to a person that is not a consumer of the tangible personal property becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and the tangible personal property is delivered or made available, or physical possession of the property is transferred, in a specified province to the person on or after July 1, 2010, for the purposes of applying subsection 218.1(1) of the Act to the supply, that amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required, despite subsection 218.1(2) of the Act, to pay, in accordance with subsection (8), the tax under subsection 218.1(1) of the Act payable in respect of the supply on that amount of consideration.

• Marginal note:Exception — subsections (5) and (6)

  (7) Subsections (5) and (6) do not apply in respect of a supply by way of sale of tangible personal property made to a person if

  • (a) the property is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;

  • (b) the person

    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the property, the total amount of tax under subsection 165(2) or 218.1(1) of the Act that would otherwise be payable by the person in respect of the supply, and

    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and

  • (c) the person is neither

    • (i) a registrant that is a selected listed financial institution, nor

    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

• Marginal note:Payment of tax — subsections (5) and (6)

  (8) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (5) or (6),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes July 1, 2010 is required to be filed on or before a particular day that is before November 1, 2010, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and

  • (b) in any other case, section 219 of the Act does not apply in respect of the tax and the person shall, before November 1, 2010, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Exception — subscriptions

  (9) Despite subsections (3) and (5), no tax is payable under subsection 165(2) of the Act in respect of any consideration paid before July 1, 2010 for a taxable supply made in a specified province of a subscription for newspapers, magazines or other publications published periodically.

• Marginal note:Exercise of option to purchase

  (10) No tax under subsection 165(2) of the Act is payable in respect of a taxable supply by way of sale of tangible personal property made in a specified province to a person if

  • (a) the person was the recipient of another supply of the tangible personal property by way of lease, licence or similar arrangement;

  • (b) the taxable supply is made as a consequence of the person exercising, after July 1, 2010, an option to purchase the tangible personal property provided for under the arrangement referred to in paragraph (a); and

  • (c) retail sales tax of the specified province in respect of the sale of the tangible personal property became payable before July 1, 2010 or would have become payable before that day if the tangible personal property or the person, as the case may be, were not exempt from that tax.

• Marginal note:Application

  (11) This section does not apply to a supply to which section 46 or 54 applies.

Marginal note:Lease or licence periods before July 2010

• 42 (1) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of property by way of lease, licence or similar arrangement made in a specified province to the extent that the consideration is a rent, royalty or similar payment attributable to a period before July 1, 2010.

• Marginal note:Lease or licence periods before July 2010

  (2) No tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of any consideration for a supply of property by way of lease, licence or similar arrangement made outside the harmonized provinces to the extent that the consideration is a rent, royalty or similar payment attributable to a period before July 1, 2010, if the supply is made to

  • (a) a person resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador; or

  • (b) a person to which the property is delivered or made available, or physical possession of the property is transferred, in a specified province.

• Marginal note:Rent and royalties due or paid after April 2010

  (3) If a taxable supply of property by way of lease, licence or similar arrangement is made in a specified province and an amount of consideration for the supply becomes due, or is paid without having become due, on or after May 1, 2010 and before July 1, 2010, to the extent that the amount of consideration is a rent, royalty or similar payment attributable to a period on or after July 1, 2010, that amount of consideration is deemed, for the purpose of applying subsection 165(2) of the Act to the supply, to have become due on July 1, 2010 and not to have been paid before that day.

• Marginal note:Rent and royalties due or paid after April 2010

  (4) If a taxable supply of property by way of lease, licence or similar arrangement is made outside the harmonized provinces to a person resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador, or to a person to which the property is delivered or made available, or physical possession of the property is transferred, in a specified province, and an amount of consideration for the supply becomes due, or is paid without having become due, on or after May 1, 2010 and before July 1, 2010, to the extent that the amount of consideration is a rent, royalty or similar payment attributable to a period on or after July 1, 2010, that amount of consideration is deemed, for the purpose of applying subsection 218.1(1) or 220.08(1) of the Act, to have become due on July 1, 2010 and not to have been paid before that day.

• Marginal note:Rent and royalties due or paid before May 2010

  (5) Subject to subsection (7), if an amount of consideration for a taxable supply of property by way of lease, licence or similar arrangement made in a specified province by a registrant to a person that is not a consumer of the property becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and any part of the amount of consideration is a rent, royalty or similar payment attributable to a period on or after July 1, 2010, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required to pay, in accordance with subsection (8), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

• Marginal note:Rent and royalties due or paid before May 2010

  (6) Subject to subsection (7), if an amount of consideration for a taxable supply of property by way of lease, licence or similar arrangement made outside the harmonized provinces to a person that is not a consumer of the property and that is resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador, or to a person that is not a consumer of the property and to which the property is delivered or made available in a specified province or to which physical possession of the property is transferred in a specified province, becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and any part of the amount of consideration is a rent, royalty or similar payment attributable to a period on or after July 1, 2010, for the purposes of applying subsection 218.1(1) or 220.08(1) of the Act to the supply, that part of the amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required, despite subsection 218.1(2) and section 220.04 of the Act, to pay, in accordance with subsection (8), the tax under subsection 218.1(1) or 220.08(1) of the Act, as the case may be, payable in respect of the supply, in the absence of section 1 of Part II of Schedule X to the Act, on that part of the amount of consideration.

• Marginal note:Exception — subsections (5) and (6)

  (7) Subsections (5) and (6) do not apply in respect of a supply of property by way of lease, licence or similar arrangement made to a person if

  • (a) the property is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;

  • (b) the person

    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the property, the total amount of tax under subsection 165(2), 218.1(1) or 220.08(1) of the Act, as the case may be, that would otherwise be payable by the person in respect of the supply, and

    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and

  • (c) the person is neither

    • (i) a registrant that is a selected listed financial institution, nor

    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

• Marginal note:Payment of tax — subsections (5) and (6)

  (8) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (5) or (6),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes July 1, 2010 is required to be filed on or before a particular day that is before November 1, 2010, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and

  • (b) in any other case, section 219 and subsection 220.09(1) of the Act do not apply in respect of the tax and the person shall, before November 1, 2010, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Lease or licence period ending before July 31, 2010

  (9) Despite subsections (3) and (5), no tax is payable under subsection 165(2) of the Act in respect of a taxable supply of property by way of lease, licence or similar arrangement made in a specified province if the consideration for the supply is a rent, royalty or similar payment attributable to a period that begins before July 1, 2010 and ends before July 31, 2010.

• Marginal note:Lease or licence period ending before July 31, 2010

  (10) Despite subsections (4) and (6), no tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of a taxable supply of property by way of lease, licence or similar arrangement made to a person to which the property is delivered or made available, or physical possession of the property is transferred, in a specified province, if the consideration for the supply is a rent, royalty or similar payment attributable to a period that begins before July 1, 2010 and ends before July 31, 2010.

• Marginal note:Exception — subsections (9) and (10)

  (11) Subsections (9) and (10) do not apply in respect of consideration for a supply of property that is a rent, royalty or similar payment attributable to a period if the supplier supplies services in respect of that property for the same period and the consideration for the supply of the property and the consideration for the supply of the services is included in a single invoice.

• Marginal note:Application

  (12) Subsections (1) to (6), (9) and (10) do not apply in respect of an amount of consideration for a supply of intangible personal property if the amount of the consideration is not dependent on the amount of the use of or production from, or the profit from the use of or production from, the property.

Marginal note:Definitions

• 43 (1) In this section, continuous freight movement, freight transportation service and shipper have the same meanings as in subsection 1(1) of Part VII of Schedule VI to the Act.

• Marginal note:Services partly performed before July 2010

  (2) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a service made in a specified province to the extent that the consideration relates to any part of the service that is performed before July 1, 2010.

• Marginal note:Services partly performed before July 2010

  (3) No tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of any consideration for a supply of a service made outside the harmonized provinces to a person resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador to the extent that the consideration relates to any part of the service that is performed before July 1, 2010.

• Marginal note:Consideration due or paid after April 2010

  (4) If a taxable supply of a service is made in a specified province and any consideration for the supply becomes due, or is paid without having become due, on or after May 1, 2010 and before July 1, 2010, to the extent that the consideration relates to any part of the service that is not performed before July 1, 2010, that consideration is deemed, for the purpose of applying subsection 165(2) of the Act to the supply, to have become due on July 1, 2010 and not to have been paid before that day.

• Marginal note:Consideration due or paid after April 2010

  (5) If a taxable supply of a service is made outside the harmonized provinces to a person resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador, and any consideration for the supply becomes due, or is paid without having become due, on or after May 1, 2010 and before July 1, 2010, to the extent that the consideration relates to any part of the service that is not performed before July 1, 2010, that consideration is deemed, for the purpose of applying subsection 218.1(1) or 220.08(1) of the Act to the supply, to have become due on July 1, 2010 and not to have been paid before that day.

• Marginal note:Consideration due or paid before May 2010

  (6) Subject to subsection (8), if an amount of consideration for a taxable supply of a service made in a specified province by a registrant to a person that is not a consumer of the service becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and any part of the amount of consideration is for a part of the service that is not performed before July 1, 2010, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required to pay, in accordance with subsection (9), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

• Marginal note:Consideration due or paid before May 2010

  (7) Subject to subsection (8), if an amount of consideration for a taxable supply of a service made outside the harmonized provinces to a person that is not a consumer of the service and that is resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and any part of the amount of consideration is for a part of the service that is not performed before July 1, 2010, for the purposes of applying subsection 218.1(1) or 220.08(1) of the Act to the supply, that part of the amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required, despite subsection 218.1(2) and section 220.04 of the Act, to pay, in accordance with subsection (9), the tax under subsection 218.1(1) or 220.08(1) of the Act, as the case may be, payable in respect of the supply, in the absence of section 1 of Part II of Schedule X to the Act, on that part of the amount of consideration.

• Marginal note:Exception — subsections (6) and (7)

  (8) Subsections (6) and (7) do not apply in respect of a supply of a service made to a person if

  • (a) the service is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;

  • (b) the person

    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the service, the total amount of tax under subsection 165(2), 218.1(1) or 220.08(1) of the Act, as the case may be, that would otherwise be payable by the person in respect of the supply, and

    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and

  • (c) the person is neither

    • (i) a registrant that is a selected listed financial institution, nor

    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

• Marginal note:Payment of tax — subsections (6) and (7)

  (9) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (6) or (7),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes July 1, 2010 is required to be filed on or before a particular day that is before November 1, 2010, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and

  • (b) in any other case, section 219 and subsection 220.09(1) of the Act do not apply in respect of the tax and the person shall, before November 1, 2010, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Services substantially all performed before July 2010

  (10) Despite subsections (4) and (6), no tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a service (other than a freight transportation service, a passenger transportation service or a service to which section 45 applies) made in a specified province if all or substantially all of the service is performed before July 1, 2010.

• Marginal note:Services substantially all performed before July 2010

  (11) Despite subsections (5) and (7), no tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of any consideration for a supply of a service (other than a freight transportation service, a passenger transportation service or a service to which section 45 applies) to a person resident in a specified province and not resident in Nova Scotia, New Brunswick or Newfoundland and Labrador if all or substantially all of the service is performed before July 1, 2010.

• Marginal note:Passenger transportation services commencing before July 2010

  (12) Despite subsections (4) and (6), no tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply made in a specified province of a passenger transportation service, or of a service of transporting an individual’s baggage in connection with a passenger transportation service, if the passenger transportation service is part of a continuous journey that begins before July 1, 2010.

• Marginal note:Freight transportation services commencing before July 2010

  (13) Despite subsections (4) and (6), if one or more carriers make a taxable supply in a specified province of freight transportation services in respect of a continuous freight movement of tangible personal property and, before July 1, 2010, the shipper of the property transfers possession of the property to the first carrier engaged in the continuous freight movement, no tax is payable under subsection 165(2) of the Act in respect of any consideration for the supply.

• Marginal note:Application

  (14) This section does not apply to a supply to which section 46 applies.