42-43 ELIZABETH II

CHAPTER 9

An Act to amend the Excise Tax Act and a related Act

[Assented to 12th May, 1994]

      Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

PART I

R.S., c. E-15; R.S., c. 15 (1st Supp.), cc. 1, 7, 42 (2nd Supp.), cc. 18, 28, 41, 42 (3rd Supp.), cc. 12, 47 (4th Supp.); 1988, c. 65; 1989, c. 22; 1990, c. 45; 1991, c. 42; 1992, cc. 1, 27, 28, 29; 1993, cc. 25, 27, 28, 38

EXCISE TAX ACT

1990, c. 45, s. 12(1)

1. (1) The definition ``estimated federal sales tax'' in subsection 121(1) of the Excise Tax Act

``estimated federal sales tax''
« taxe de vente fédérale estimative »

``estimated federal sales tax'' for a residential complex means the prescribed amount in respect of the complex;

(2) Subsection (1) shall be deemed to have come into force on December 17, 1990 and any regulations made for the purposes of the definition ``estimated federal sales tax'' in subsection 121(1) of the Excise Tax Act, as enacted by subsection (1), may have effect from that date.

1990, c. 45 s. 12(1)

2. (1) The definitions ``capital property'', ``small supplier'' and ``taxation year'' in subsection 123(1) of the Act are replaced by the following:

``capital property''
« immobilisati on »

``capital property'', in respect of a person, means property that is, or would be if the person were a taxpayer under the Income Tax Act, capital property of the person within the meaning of that Act, other than property described in Class 12, 14 or 44 of Schedule II to the Income Tax Regulations;

``small supplier''
« petit fournisseur »

``small supplier'', at any time, means a person who is at that time a small supplier under section 148 or 148.1;

``taxation year''
« année d'imposition »

``taxation year'' of a person means

      (a) where the person is a taxpayer, within the meaning of that term in the Income Tax Act (other than an unincorporated person exempt because of subsection 149(1) of that Act from tax under Part I of that Act on all or part of the person's taxable income), the taxation year of the person for the purposes of that Act, and

      (b) in any other case, the period that would be the taxation year of the person for the purposes of that Act if the person were a corporation;

1990, c. 45, s. 12(1); 1993, c. 27, s. 10(3)

(2) Subparagraphs (d)(i) and (ii) of the definition ``constructeur'' in subsection 123(1) of the French version of the Act are replaced by the following:

        (i) dans le cas d'un immeuble d'habitation en copropriété ou d'un logement en copropriété, soit à un moment où l'immeuble n'est pas enregistré à titre d'immeuble d'habitation en copropriété, soit avant qu'il soit occupé à titre résidentiel ou d'hébergement,

        (ii) dans les autres cas, avant qu'il soit occupé à titre résidentiel ou d'hébergement;

(3) The definition ``capital property'' in subsection 123(1) of the Act, as enacted by subsection (1), applies to property acquired after April 26, 1993.

(4) The definition ``small supplier'' in subsection 123(1) of the Act, as enacted by subsection (1), shall be deemed to have come into force on April 1, 1993.

(5) The definition ``taxation year'' in subsection 123(1) of the Act, as enacted by subsection (1), shall be deemed to have come into force on June 10, 1993.

(6) Subsection (2) shall be deemed to have come into force on December 17, 1990.

1993, c. 27, s. 13(1)

3. (1) The portion of paragraph 129(1)(b) of the Act before subparagraph (i) is replaced by the following:

    (b) would be a small supplier under section 148 if

(2) Subsection (1) shall be deemed to have come into force on April 1, 1993.

4. (1) The Act is amended by adding the following after section 141:

Meaning of ``endeavour''

141.01 (1) In this section, ``endeavour'' of a person means

    (a) a business of the person, other than a business in the ordinary course of which the person has not made, and does not intend to make, supplies;

    (b) an adventure or concern in the nature of trade of the person; or

    (c) the making of a supply by the person of real property of the person, including anything done by the person in the course of or in connection with the making of the supply.

Acquisition for purpose of making supplies

(2) Where a person acquires or imports property or a service for consumption or use in the course of an endeavour of the person, the person shall, for the purposes of this Part, be deemed to have acquired or imported the property or service

    (a) for consumption or use in the course of commercial activities of the person, to the extent that the property or service is acquired or imported by the person for the purpose of making taxable supplies in the course of that endeavour; and

    (b) for consumption or use otherwise than in the course of commercial activities of the person, to the extent that the property or service is acquired or imported by the person

      (i) for the purpose of making supplies in the course of that endeavour that are not taxable supplies, or

      (ii) for a purpose other than the making of supplies in the course of that endeavour.

Use for purpose of making supplies

(3) Where a person consumes or uses property or a service in the course of an endeavour of the person, that consumption or use shall, for the purposes of this Part, be deemed to be

    (a) in the course of commercial activities of the person, to the extent that the consumption or use is for the purpose of making taxable supplies in the course of that endeavour; and

    (b) otherwise than in the course of commercial activities of the person, to the extent that the consumption or use is

      (i) for the purpose of making supplies in the course of that endeavour that are not taxable supplies, or

      (ii) for a purpose other than the making of supplies in the course of that endeavour.

Free supplies

(4) Where

    (a) a supplier makes a taxable supply (in this subsection referred to as a ``free supply'') of property or a service for no consideration or nominal consideration in the course of a particular endeavour of the supplier, and

    (b) it can reasonably be regarded that among the purposes (in this subsection referred to as the ``specified purposes'') for which the free supply is made is the purpose of facilitating, furthering or promoting

      (i) the acquisition, consumption or use of other property or services by any other person, or

      (ii) an endeavour of any person,

the following rules apply:

    (c) to the extent that the supplier acquired or imported a particular property or service for the purpose of making the free supply of that property or service or for consumption or use in the course of making the free supply, the supplier shall be deemed, for the purposes of subsection (2), to have acquired or imported the particular property or service

      (i) for use in the course of the particular endeavour, and

      (ii) for the specified purposes and not for the purpose of making the free supply, and

    (d) to the extent that the supplier consumed or used a particular property or service for the purpose of making the free supply, the supplier shall be deemed, for the purposes of subsection (3), to have consumed or used the particular property or service for the specified purposes and not for the purpose of making the free supply.

Method of determining extent of use, etc.

(5) The methods used by a person in a fiscal year to determine

    (a) the extent to which properties or services are acquired or imported by the person for the purpose of making taxable supplies or for other purposes, and

    (b) the extent to which the consumption or use of properties or services is for the purpose of making taxable supplies or for other purposes,

shall be fair and reasonable and shall be used consistently by the person throughout the year.

Application to other provisions

(6) Where

    (a) a particular provision of this Part, other than subsections (2) to (4), deems certain circumstances or facts to exist, and

    (b) that deeming is dependent, in whole or in part, on the particular circumstance that property or a service is or was consumed or used, or acquired or imported for consumption or use, to a certain extent in the course of, or otherwise than in the course of, commercial activities or other activities,

that certain extent shall be determined under subsection (2) or (3), as the case requires, for the purpose of determining whether the particular circumstance exists, but where it is so determined that the particular circumstance exists and all other circumstances necessary for the particular provision to apply exist, the deeming by the particular provision shall apply notwithstanding subsections (2) and (3).

Idem

(7) Where a provision of this Part deems the consideration for a supply not to be consideration for the supply, a supply to be made for no consideration or a supply not to have been made by a person, that deeming shall not apply for the purposes of any of subsections (1) to (4).

(2) Subsection (1) shall be deemed to have come into force on December 17, 1990 except that

    (a) in applying subsection 141.01(2) of the Act, as enacted by subsection (1), before October 1992, the portion before paragraph (a) shall be read as follows:

(2) Notwithstanding subsection 141(5), where a person acquires or imports property or a service for consumption or use in the course of an endeavour of the person, the person shall, for the purposes of this Part, be deemed to have acquired or imported the property or service

    (b) in applying subsection 141.01(3) of the Act, as enacted by subsection (1), before October 1992, the portion before paragraph (a) shall be read as follows:

(3) Notwithstanding subsection 141(5), where a person consumes or uses property or a service in the course of an endeavour of the person, that consumption or use shall, for the purposes of this Part, be deemed to be

    and

    (c) subsection 141.01(4) of the Act, as enacted by subsection (1), does not apply for the purposes of determining

      (i) any amount claimed (other than an amount deemed under paragraph 296(5)(a) of the Act to have been claimed) in a return under Division V, or in an application under Division VI, of Part IX of the Act filed on or before February 14, 1994, or

      (ii) any change in use of property occurring on or before that day.

1990, c. 45, s. 12(1)

5. (1) Section 147 of the Act is repealed.

(2) Subsection (1) shall be deemed to have come into force on December 17, 1990.

6. (1) The Act is amended by adding the following after section 148:

Meaning of ``gross revenue''

148.1 (1) In this section, ``gross revenue'' of a person for a fiscal year of the person means the amount, if any, by which

    (a) the total of all amounts each of which is

      (i) a gift that is received or becomes receivable (depending on the method, in this paragraph referred to as the ``accounting method'', followed by the person in determining the person's revenue for the year) by the person during the fiscal year,

      (ii) a grant, subsidy, forgivable loan or other assistance (other than a refund or rebate of, or credit in respect of, taxes, duties or fees imposed by an Act of Parliament or the legislature of a province) in the form of money that is received or becomes receivable (depending on the accounting method) by the person during the fiscal year from a government, municipality or other public authority,

      (iii) revenue that is or would be, if the person were a taxpayer under the Income Tax Act, included for the purposes of that Act in determining the person's income for the fiscal year from property, a business, an adventure or concern in the nature of trade or other source and that is not included in subparagraph (ii),

      (iv) an amount that is or would be, if the person were a taxpayer under the Income Tax Act, a capital gain for the fiscal year for the purposes of that Act from the disposition of property of the person, or

      (v) other revenue of any kind whatever (other than an amount that is or would be, if the person were a taxpayer under the Income Tax Act, included in determining the amount of a capital gain or loss of the person for the purposes of that Act) that is received or becomes receivable (depending on the accounting method) by the person during the fiscal year,

    and that is not included in determining the total under this paragraph for a preceding fiscal year of the person,

exceeds

    (b) the total of all amounts each of which is or would be, if the person were a taxpayer under the Income Tax Act, a capital loss for the fiscal year for the purposes of that Act from the disposition of property of the person.

Charity as small supplier

(2) For the purposes of this Part, a person who is a charity at any time in a particular fiscal year of the person is a small supplier throughout the particular fiscal year if

    (a) the particular fiscal year is the first fiscal year of the person;

    (b) the particular fiscal year is the second fiscal year of the person and the gross revenue of the person for the first fiscal year of the person was $175,000 or less; or

    (c) the particular fiscal year is not the first or second fiscal year of the person and the gross revenue of the person for either of the two fiscal years of the person immediately preceding the particular fiscal year was $175,000 or less.

(2) Subsection (1) shall be deemed to have come into force on April 1, 1993.

1993, c. 27, s. 30(1)

7. (1) Subsection 164.1(1) is amended by striking out the word ``and'' at the end of paragraph (a) and by replacing paragraph (b) with the following:

    (b) feed that is a complete feed, supplement, macro-premix, micro-premix or mineral feed (other than a trace mineral salt feed), the supply of which in bulk quantities of at least 20 kg would be a zero-rated supply included in Part IV of Schedule VI; and

    (c) by-products of the food processing industry and plant or animal products, the supply of which in bulk quantities of at least 20 kg would be a zero-rated supply included in Part IV of Schedule VI.

(2) Subsection (1) applies to supplies of property delivered to recipients after June 10, 1993.