BILL C-70 - First Reading

	(a) the financial institution is a corporation that, under the rules prescribed in any of sections 402 to 405 of the Income Tax Regulations, has or would, if it had taxable income for the particular year and the preceding taxation year, have taxable in come earned in the particular year and the preceding taxation year in any of the participating provinces and taxable income earned in the particular year and the preced ing taxation year in any of the non-partici pating provinces;
	(b) the financial institution is an individual, the estate of a deceased individual or a trust that, under the rules prescribed in section 2603 of the Income Tax Regulations, has or would, if it had income for the particular year and the preceding taxation year, have income earned in the particular year and the preceding taxation year in any of the participating provinces and income earned in the particular year and the preceding taxation year in any of the non-participating provinces;
	(c) the financial institution is a specified partnership during the particular year and the preceding taxation year; or
	(d) the financial institution is a prescribed financial institution.
Adjustment to net tax	(2) In determining the net tax for a particu lar reporting period in a fiscal year that ends in a taxation year of a selected listed financial institution of a prescribed class, the financial institution shall add all positive amounts, and may deduct all negative amounts, each of which is determined, for a participating prov ince, by the formula
	[(A - B) x C x (D/E)] - F + G
	where
	A is the total of
	(a) all tax that became payable under any of subsection 165(1) and sections 212 and 218 by the financial institution during the particular reporting period or that was paid by the financial institution during the particular reporting period without having become payable, and
	(b) all tax under subsection 165(1) that would have become payable by the financial institution during the particular reporting period but for an election made under section 150;
	B is the total of
	(a) all input tax credits of the financial institution for the particular reporting period or preceding reporting periods of the financial institution claimed by the financial institution in the return under this Division filed by the financial insti tution for the particular reporting period, and
	(b) all amounts that would have been input tax credits of the financial institu tion for the particular reporting period of the financial institution if the financial institution had not made an election under section 150;
	C is the financial institution's percentage for the participating province for the taxation year, determined in accordance with the prescribed method that applies to financial institutions of that class;
	D is the tax rate for the participating province;
	E is 7%;
	F is the total of all tax under subsection 165(2) in respect of supplies made in the participat ing province to the financial institution or under section 212.1 in respect of goods im ported by the financial institution for use in the participating province that became pay able by the financial institution during the particular reporting period or that was paid by the financial institution during the par ticular reporting period without having be come payable; and
	G is the total of all amounts each of which is a positive or negative prescribed amount.
Exclusions from adjustment	(3) In determining an amount that a selected listed financial institution is required to add or may deduct under subsection (2) in determin ing its net tax,
	(a) tax that the financial institution is deemed to have paid under any of subsec tions 129.1(5), 171(1), 171.1(2), 206(2) and (3) and 208(2) and (3) shall be excluded from the totals for A and F in the formula in subsection (2); and
	(b) input tax credits in respect of tax referred to in paragraph (a) and input tax credits that the financial institution is permitted to claim under subsection 193(1) or (2) shall be excluded from the total for B in that formula.
Meaning of ``specified partnership''	(4) For the purposes of this section, a partnership is a ``specified partnership'' dur ing a taxation year of the partnership if, at any time in the taxation year, the partnership has
	(a) a member that, in the taxation year of the member in which the taxation year of the partnership ends,
	(i) where the member is a corporation, has or would, if it had taxable income for the year, have, under the rules prescribed in any of sections 402 to 405 of the Income Tax Regulations, taxable income earned in the year in any of the participat ing provinces from a business (within the meaning assigned by subsection 248(1) of the Income Tax Act) carried on through the partnership,
	(ii) where the member is an individual, the estate of a deceased individual or a trust, has or would, if it had income for the year, have, under the rules prescribed in section 2603 of the Income Tax Regulations, income earned in the year in any of the participating provinces from a business (within the meaning assigned by subsection 248(1) of the Income Tax Act) carried on through the partnership, and
	(iii) where the member is another part nership, would have, under the rules prescribed in section 402 of the Income Tax Regulations, taxable income earned in the year in any of the participating provinces from a business (within the meaning assigned by subsection 248(1) of the Income Tax Act) carried on through the partnership if the other partnership were a corporation that is a taxpayer under that Act; and
	(b) a member (including a member referred to in paragraph (a)) that, in the taxation year of the member in which the taxation year of the partnership ends,
	(i) where the member is a corporation has or would, if it had taxable income for the year, have, under the rules prescribed in any of sections 402 to 405 of the Income Tax Regulations, taxable income earned in any of the non-participating provinces from a business (within the meaning assigned by subsection 248(1) of the Income Tax Act) carried on through the partnership,
	(ii) where the member is an individual, the estate of a deceased individual or a trust, has or would, if it had income for the year, have, under the rules prescribed in section 2603 of the Income Tax Regulations, income earned in the year in any of the non-participating provinces from a business (within the meaning assigned by subsection 248(1) of the Income Tax Act) carried on through the partnership, and
	(iii) where the member is another part nership, would have, under the rules prescribed in section 402 of the Income Tax Regulations, taxable income earned in the year in any of the non-participating provinces from a business (within the meaning assigned by subsection 248(1) of the Income Tax Act) carried on through the partnership if the other partnership were a corporation that is a taxpayer under that Act.
	(2) Subsection (1) comes into force on April 1, 1997 except that, for the purpose of determining the net tax of a selected listed financial institution for the reporting peri od of the financial institution that begins before that day and that ends on or after that day, subsection 225.2(2) of the Act, as enacted by subsection (1), shall be read as follows:
	(2) In determining the net tax for a particu lar reporting period in a fiscal year that ends in a taxation year of a selected listed financial institution of a prescribed class, the financial institution shall add all positive amounts, and may deduct all negative amounts, each of which is determined, for a participating prov ince, by the formula
	[(A - B) x (H/I) x C x (D/E)] - F + G
	where
	A is the total of
	(a) all tax that became payable under any of subsection 165(1) and sections 212 and 218 by the financial institution during the particular reporting period or that was paid by the financial institution during the particular reporting period without having become payable, and
	(b) all tax under subsection 165(1) that would have become payable by the financial institution during the particular reporting period but for an election made under section 150;
	B is the total of
	(a) all input tax credits of the financial institution for the particular reporting period or preceding reporting periods of the financial institution claimed by the financial institution in the return under this Division filed by the financial insti tution for the particular reporting period, and
	(b) all amounts that would have been input tax credits of the financial institu tion for the particular reporting period of the financial institution if the financial institution had not made an election under section 150;
	C is the financial institution's percentage for the participati ng province for the taxation year, determined in accordance with the prescribed method that applies to financial institutions of that class;
	D is the tax rate for the participating province;
	E is 7%;
	F is the total of all tax under subsection 165(2) in respect of supplies made in the participat ing province to the financial institution or under section 212.1 in respect of goods im ported by the financial institution for use in the participating province that became pay able by the financial institution during the particular reporting period or that was paid by the financial institution during the par ticular reporting period without having be come payable;
	G is the total of all amounts each of which is a positive or negative prescribed amount;
	H is the number of days in the particular re porting period after March 1997; and
	I is the total number of days in the particular reporting period.
	210. (1) Subsection 226(4) of the Act is replaced by the following:
Input tax credit for returnable containers	(4) Tax that is paid or that becomes payable by a registrant in respect of a supply or the bringing into a participating province of a returnable container shall not be included in determining an input tax credit of the regis trant unless the registrant is acquiring the container or bringing it into the province, as the case may be, for the purpose of making a zero-rated supply of the container or a supply of the container outside Canada.
1993, c. 27, s. 89(1)	(2) Subsection 226(6) of the Act is re placed by the following:
Change in practice	(6) Where subsection (3) at any time ceases to apply to a registrant in respect of a returnable container owned by the registrant at that time and the registrant was not entitled, because of subsection (4), to claim an input tax credit in respect of the last acquisition of the container by the registrant or in respect of bringing the container into a participating province after it was last acquired , for the purposes of this Part, the registrant is deemed to have received at that time a supply of the container and to have paid at that time tax in respect of the supply equal to the basic tax content of the container at that time .
1993, c. 27, s. 89(1)	(3) The portion of subsection 226(7) of the Act before paragraph (b) is replaced by the following:
Change in practice	(7) Where subsection (3) at any time begins to apply to a registrant in respect of a returnable container owned by the registrant at that time and the registrant was entitled to claim an input tax credit in respect of the last acquisition of the container by the registrant or in respect of bringing the container into a participating province after it was last ac quired , for the purposes of this Part, the registrant is deemed
	(a) to have made immediately before that time a supply of the container and to have collected at that time tax in respect of the supply equal to the basic tax content of the container at that time ; and
	(4) Subsections (1) to (3) come into force on April 1, 1997.
1990, c. 45, s. 12(1); 1993, c. 27, s. 203(Sch. I, item 1(b))	211. (1) Subsection 228(1) of the Act is replaced by the following:
Calculation of net tax	228. (1) Every person who is required to file a return under this Division shall, in the return, calculate the net tax of the person for the reporting period for which the return is required to be filed, except where subsection (2.1) or (2.3) applies in respect of the reporting period.
1996, c. 21, s. 65(1)	(2) The portion of subsection 228(2) of the Act before paragraph (a) is replaced by the following:
Remittance	(2) Where the net tax for a reporting period of a person is a positive amount, the person shall, except where subsection (2.1) or (2.3) applies in respect of the reporting period, remit that amount to the Receiver General,
1990, c. 45, s. 12(1); 1993, c. 27, s. 203 (Sch. I, item 1(b))	(3) Subsection 228(3) of the Act is re placed by the following:
Selected listed financial institutions - interim return and remittance	(2.1) Where a person who is a selected listed financial institution is required to file an interim return for a reporting period under subsection 238(2.1),
	(a) subject to subsection (2.2), the person shall calculate in the interim return the amount (in this Part referred to as the ``interim net tax'') that would be the net tax of the person for the reporting period if the reference in the description of C in the formula in subsection 225.2(2) to ``the financial institution's percentage for the participating province for the taxation year'' were a reference to ``the lesser of the financial institution's percentage for the participating province for the taxation year and the financial institution's percentage for the immediately preceding taxation year''; and
	(b) where the interim net tax for the reporting period is a positive amount, the person shall pay that amount, on account of the person's net tax for the reporting period that the person is required to remit under paragraph (2.3)(b), to the Receiver General on or before the day on or before which that interim return is required to be filed.
Selected listed financial institutions - interim returns in the first fiscal year	(2.2) For the purposes of paragraph (2.1)(a), where a person becomes a selected listed financial institution during a reporting period of the person that ends in a fiscal year of the person that begins on or after April 1, 1997, the interim net tax for each reporting period in the fiscal year is the amount that would be the net tax of the person for the reporting period if the reference in the description of C in the formula in subsection 225.2(2) to ``the finan cial institution's percentage for the participat ing province for the taxation year'' were a reference to ``the financial institution's per centage for the participating province for the immediately preceding reporting period''.
Selected listed financial institutions - final return	(2.3) Where a person who is a selected listed financial institution is required to file a final return under subsection 238(2.1) for a report ing period,
	(a) the person shall calculate in the final return the net tax of the person for the reporting period;
	(b) where the net tax of the person for the reporting period is a positive amount, the person shall remit that amount to the Receiver General on or before the day on or before which the final return for the report ing period is required to be filed;
	(c) the person shall report in the final return the positive amount, if any, that the person paid on account of the person's net tax for the period under subsection (2.1) or the negative amount, if any, that the person claimed in the interim return for the period as an interim net tax refund for the period under subsection (2.4); and
	(d) where the person claimed an interim net tax refund for the reporting period under subsection (2.4),
	(i) if the interim net tax refund exceeds the amount that would be the net tax refund for the period payable to the person under subsection (3) if the person had not claimed that interim net tax refund, the person shall pay an amount equal to the excess to the Receiver General on or before the day on or before which the final return for the reporting period is required to be filed, and
	(ii) if the person's net tax for the period is a positive amount, the person shall pay an amount equal to the interim net tax refund to the Receiver General on or before the day on or before which the final return for the reporting period is required to be filed.
Interim refund for selected listed financial institutions	(2.4) Where the amount determined in accordance with paragraph (2.1)(a) for a reporting period of person who is a selected listed financial institution is a negative amount, the person may claim that amount, in the interim return for that reporting period filed before the day on or before which the final return for the period is required to be filed, as an interim net tax refund for the period payable to the person by the Minister.
Net tax refund	(3) Where the net tax for a reporting period of a person is a negative amount,
	(a) where the person is a selected listed financial institution that is required to file a final return for the reporting period under subsection 238(2.1), the person may claim, in the final return for that reporting period as a net tax refund for the period payable to the person by the Minister, the amount, if any, determined by the formula
	A - B
	where
	A is the absolute value of that net tax, and
	B is the amount, if any, that the person claimed as an interim net tax refund for the period under subsection (2.4); and
	(b) in any other case , the person may claim in the return for that reporting period the amount of that net tax as a net tax refund for the period, payable to the person by the Minister.
	(4) Subsections 228(6) and (7) of the Act, as enacted by subsection 47(2), are replaced by the following:
Set-off of refunds or rebates	(6) Where at any time a person files a particular return under this Part in which the person reports an amount (in this subsection referred to as the ``remittance amount'') that is required to be remitted under subsection (2) or (2.3) or paid under subsection (2.1) or (4) or Division IV or IV.1 by the person and the person claims a refund or rebate payable to the person at that time under this Part (other than Division III) in the particular return or in another return, or in an application, filed under this Part with the particular return, the person is deemed to have remitted at that time on account of the person's remittance amount, and the Minister is deemed to have paid at that time on account of the refund or rebate, an amount equal to the lesser of the remittance amount and the amount of the refund or rebate.