New Harmonized Value-added Tax System Regulations, No. 2 (SOR/2010-151)

Interpretation

Marginal note:Definitions

• 1 (1) The following definitions apply in these Regulations.

  Act

  Act means the Excise Tax Act. (Loi)

  imported taxable supply

  imported taxable supply has the same meaning as in section 217 of the Act. (fourniture taxable importée)

  provincial investment plan

  provincial investment plan for a particular province at any time means an investment plan

  • (a) that is at that time a financial institution described in section 11 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations, the units of which are permitted, under the laws of Canada or a province, to be sold only in the particular province;

  • (b) that is at that time a stratified investment plan, all the series of which are provincial series for the particular province; or

  • (c) that meets the following criteria:

    • (i) the investment plan has, throughout the taxation year in which the fiscal year of the investment plan that includes that time ends, a permanent establishment in the particular province, as determined in accordance with section 3 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations, and

    • (ii) the investment plan does not have, throughout that taxation year, a permanent establishment in a province other than the particular province, as determined in accordance with section 3 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations. (régime de placement provincial)

  provincial series

  provincial series of a financial institution for a particular province means a provincial series of the financial institution, as defined in subsection 1(1) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations, the units of which are permitted, under the laws of Canada or a province, to be sold in the particular province. (série provinciale)

  provincial stratified investment plan

  provincial stratified investment plan means a stratified investment plan (other than a provincial investment plan) with one or more provincial series. (régime de placement stratifié provincial)

  series

  series has the same meaning as in subsection 1(1) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations. (série)

  stratified investment plan

  stratified investment plan has the same meaning as in subsection 1(1) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations. (régime de placement stratifié)

  unit

  unit has the same meaning as in subsection 1(1) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations. (unité)

• Marginal note:Application of definitions to adaptations

  (2) For greater certainty, the definitions in this section apply in subsections 218.1(1) and (1.2), 220.07(1) to (4) and 220.08(1) of the Act as adapted by these Regulations.

PART 1Permanent Establishment in a Province

Marginal note:Prescribed classes

• 2 (1) For the purposes of subsection 132.1(3) of the Act, the following classes of persons are prescribed:

  • (a) charities;

  • (b) non-profit organizations; and

  • (c) selected public service bodies, as defined in subsection 259(1) of the Act.

• Marginal note:Permanent establishment in a province

  (2) For the purposes of subsection 132.1(3) of the Act, a person referred to in subsection (1) is deemed to have a permanent establishment in a province if a place in the province would be a permanent establishment (as defined for the purposes of Part IV of the Income Tax Regulations) of the person under the following circumstances:

  • (a) the person were a corporation; and

  • (b) the person’s activities were a business for the purposes of the Income Tax Act.

• (3) [Repealed, SOR/2019-59, s. 28]

• (4) [Repealed, SOR/2019-59, s. 28]

PART 2Travel and Other Allowances

Marginal note:Percentage

3 For the purposes of subparagraph (i) of the description of B in paragraph 174(f) of the Act,

• (a) if all or substantially all of the supplies for which the allowance is paid were made in a particular participating province or if the allowance is paid for the use of the motor vehicle and all or substantially all of that use is in a particular participating province, the percentage is the total of the rate set out in subsection 165(1) of the Act and the tax rate for that particular participating province; and

• (b) unless paragraph (a) applies, if all or substantially all of the supplies for which the allowance is paid were made in two or more participating provinces or if the allowance is paid for the use of the motor vehicle and all or substantially all of that use is in two or more participating provinces, the percentage is the total of the rate set out in subsection 165(1) of the Act and the lowest tax rate among the tax rates for those participating provinces.

PART 3Direct Sellers

Marginal note:Adjustment for participating provinces

4 For the purposes of the new harmonized value-added tax system, subsections 178.3(5) and (6) and 178.4(5) and (6) of the Act do not apply in respect of supplies of exclusive products made by independent sales contractors.

PART 4Non-Exclusive Use of Passenger Vehicle or Aircraft

Marginal note:Bringing between participating provinces

5 For the purpose of the description of I in subparagraph (iv) of the description of A in paragraph 202(4)(b) of the Act, the rate is

• (a) in the case of the bringing into a participating province of a vehicle or aircraft from another participating province, the percentage determined by the formula

  A - B

  where

  A

  is the tax rate for the participating province into which the vehicle or aircraft is brought, and

  B

  is the tax rate for the participating province from which the vehicle or aircraft is removed; and

• (b) in any other case, 0%.

PART 5Property and Services Brought into a Province

DIVISION 1Interpretation

Marginal note:Definitions

6 The following definitions apply in this Part.

provincial rate

provincial rate, for or in relation to a province, means

• (a) in the case of a participating province, the tax rate for that province; and

• (b) in the case of a non-participating province, 0%. (taux provincial)

specified item

specified item, in respect of a province, means property or a service that is an item included in a schedule to the Deduction for Provincial Rebate (GST/HST) Regulations and in respect of which an amount may be paid or credited under an Act of the legislature of the province. (article déterminé)

DIVISION 1.1Tax on Importation of Goods

Marginal note:Prescribed goods — paragraph 212.1(2)(a)

6.1 For the purpose of paragraph 212.1(2)(a) of the Act, goods the value of which is determined for the purposes of Division III of Part IX of the Act under section 15 of the Value of Imported Goods (GST/HST) Regulations are prescribed.

DIVISION 2Tax on Imported Taxable Supplies

Marginal note:Prescribed extent — paragraph 218.1(1)(a) of Act

7 For the purposes of paragraph 218.1(1)(a) of the Act, the prescribed extent is an extent of at least 10%.

Marginal note:Adaptation — subsection 218.1(1) of Act

7.01 If a person is the recipient of an imported taxable supply of property or a service and the person is a provincial investment plan or provincial stratified investment plan at the time an amount of consideration for the supply becomes due or is paid without having become due, subsection 218.1(1) of the Act is adapted in respect of the amount of consideration for the supply as follows:

• 218.1 (1) Subject to this Part,

  • (a) every person that is the recipient of an imported taxable supply of intangible personal property or a service and that is a provincial investment plan or provincial stratified investment plan at the time an amount of consideration for the supply becomes due or is paid without having become due must, for that amount of consideration and for each participating province, pay to Her Majesty in right of Canada, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

    A × B × C

    where

    A

    is the tax rate for the participating province,

    B

    is the value of that consideration that is paid or becomes due at that time, and

    C

    is

    • (i) in the case of a provincial stratified investment plan, the total of all amounts, each of which is the extent (expressed as a percentage) to which the property or service was acquired for consumption, use or supply in the course of activities relating to a provincial series of the person for the participating province, as determined in accordance with section 51 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

    • (ii) in the case of a provincial investment plan for the participating province, 100%, and

    • (iii) in the case of a provincial investment plan for a province other than the participating province, 0%; and

  • (b) every person

    • (i) that is a registrant and is the recipient of a supply of property included in paragraph (b) of the definition imported taxable supply in section 217, or

    • (ii) that is the recipient of a supply of property included in any of paragraphs (b.01) to (b.3) or (c.1) to (e) of the definition imported taxable supply in section 217

    and that is a provincial investment plan or a provincial stratified investment plan at the time an amount of consideration for the supply becomes due or is paid without having become due shall, for that amount of consideration and for each participating province, pay to Her Majesty in right of Canada, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

    A × B × C

    where

    A

    is the tax rate for the participating province,

    B

    is the value of that consideration that is paid or becomes due at that time, and

    C

    is

    • (i) in the case of a provincial stratified investment plan, the total of all amounts, each of which is the extent (expressed as a percentage) to which the property was acquired for consumption, use or supply in the course of activities relating to a provincial series of the person for the participating province, as determined in accordance with section 51 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

    • (ii) in the case of a provincial investment plan for the participating province, 100%, and

    • (iii) in the case of a provincial investment plan for a province other than the participating province, 0%.

Marginal note:Non-application — paragraph 218.1(1)(a) of Act

7.02 Paragraph 218.1(1)(a) of the Act does not apply in respect of an amount of consideration for an imported taxable supply of intangible personal property or a service made to a person if

• (a) the person is a provincial stratified investment plan at the time the amount of consideration becomes due or is paid without having become due; and

• (b) the amount determined by the following formula, expressed as a percentage, is less than 10%:

  A/B

  where

  A

  is the total of all amounts, each of which is the extent to which the property or service is acquired for consumption, use or supply in the course of activities relating to a provincial series of the person for a participating province, as determined in accordance with section 51 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations, and

  B

  is the total of all amounts, each of which is the extent to which the property or service is acquired for consumption, use or supply in the course of activities relating to a provincial series of the person for any province, as determined in accordance with section 51 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations.

Marginal note:Adaptation — subsection 218.1(1.2) of Act

7.03 If a person is a qualifying taxpayer, within the meaning of subsection 217.1(1) of the Act, for a specified year of the person, as defined in section 217 of the Act, and if the person is a provincial investment plan or provincial stratified investment plan at any time in a fiscal year of the person that ends in the specified year, subsection 218.1(1.2) of the Act is adapted in respect of the specified year as follows:

• (1.2) Subject to this Part, every qualifying taxpayer that is a provincial investment plan or provincial stratified investment plan at any time in a fiscal year of the qualifying taxpayer that ends in a specified year of the qualifying taxpayer shall, for the specified year and for each particular participating province, pay to Her Majesty in right of Canada, in addition to the tax payable under section 218.01, tax calculated at the tax rate for the particular participating province on

  • (a) if an election under subsection 217.2(1) is in effect for the specified year, the amount determined by the formula

    A + B

    where

    A

    is the total of all amounts, each of which is an amount in respect of an internal charge for the specified year that is greater than zero determined by the formula

    A₁ × A₂

    where

    A₁

    is the internal charge, and

    A₂

    is

    • (i) in the case of a provincial stratified investment plan, the total of all amounts, each of which is the extent (expressed as a percentage) to which the internal charge is attributable to outlays or expenses that were made or incurred to consume, use or supply the whole or part of property or of a qualifying service in respect of which the internal charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer relating to a provincial series of the qualifying taxpayer for the particular participating province, as determined in accordance with section 51 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

    • (ii) in the case of a provincial investment plan for the particular participating province, 100%, and

    • (iii) in the case of a provincial investment plan for a province other than the particular participating province, 0%, and

    B

    is the total of all amounts, each of which is an amount in respect of an external charge for the specified year that is greater than zero determined by the formula

    B₁ × B₂

    where

    B₁

    is the external charge, and

    B₂

    is

    • (i) in the case of a provincial stratified investment plan, the total of all amounts, each of which is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the external charge, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service in respect of which the external charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer relating to a provincial series of the qualifying taxpayer for the particular participating province, as determined in accordance with section 51 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

    • (ii) in the case of a provincial investment plan for the particular participating province, 100%, and

    • (iii) in the case of a provincial investment plan for a province other than the particular participating province, 0%; and

  • (b) in any other case, the total of all amounts, each of which is an amount in respect of qualifying consideration for the specified year that is greater than zero determined by the formula

    C × D

    where

    C

    is the qualifying consideration, and

    D

    is

    • (i) in the case of a provincial stratified investment plan, the total of all amounts, each of which is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the qualifying consideration, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service in respect of which the qualifying consideration is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer relating to a provincial series of the qualifying taxpayer for the particular participating province, as determined in accordance with section 51 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

    • (ii) in the case of a provincial investment plan for the particular participating province, 100%, and

    • (iii) in the case of a provincial investment plan for a province other than the particular participating province, 0%.