New Harmonized Value-added Tax System Regulations, No. 2

Marginal note:Qualifying motor vehicles

32 If a qualifying motor vehicle acquired in, or brought into, a specified province by a person is, only by virtue of subparagraph 28(2)(g)(i), not a specified property or service, the person is engaged in the business of supplying motor vehicles by way of sale and the person uses, at any time during the fiscal year when the person is a large business, the qualifying motor vehicle otherwise than exclusively for the purpose referred to in subparagraph 28(2)(g)(i), the following rules apply:

• (a) for the purposes of the definition specified property or service in subsection 236.01(1) of the Act, the qualifying motor vehicle is a prescribed property; and

• (b) for the purposes of subsection 236.01(2) of the Act

  • (i) despite section 30, the prescribed time in respect of a specified provincial input tax credit of the person in respect of the qualifying motor vehicle is the last day of each fiscal year of the person during which the person uses the qualifying motor vehicle otherwise than exclusively for the purpose referred to in subparagraph 28(2)(g)(i), and

  • (ii) despite subsection 31(2), the amount to be added to the net tax of the person for a reporting period of the person that includes the last day of a fiscal year referred to in subparagraph (i) of the person is determined by the formula

    A × B

    where

    A

    is an amount determined by the formula

    C × D × 2%

    where

    C

    is the specified provincial input tax credit, and

    D

    is the number of fiscal months in the fiscal year during which the qualifying motor vehicle is used otherwise than exclusively for the purpose referred to in subparagraph 28(2)(g)(i) and during which the person is a large business, and

    B

    is the recapture rate applicable on the last day of the fiscal year in respect of the specified provincial input tax credit.