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(3) Subsections (1) and (2) come into force
on April 1, 1997.
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208. (1) The Act is amended by adding the
following after section 225.1, as enacted by
subsection 45(1):
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Selected listed
financial
institutions
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225.2 (1) For the purposes of this Part, a
financial institution is a selected listed
financial institution throughout a reporting
period in a fiscal year that ends in a particular
taxation year of the financial institution if the
financial institution is a listed financial
institution described in any of subparagraphs
149(1)(a)(i) to (x) during the particular year
and the preceding taxation year and
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(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
income 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
preceding taxation year in any of the
non-participating provinces;
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(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;
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(c) the financial institution is a specified
partnership during the particular year and
the preceding taxation year; or
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(d) the financial institution is a prescribed
financial institution.
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Adjustment to
net tax
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(2) In determining the net tax for a
particular 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 province, by the formula
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[(A - B) x C x (D/E)] - F + G
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where
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A is the total of
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(a) all tax (other than a prescribed
amount of 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,
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(b) all amounts each of which is tax
(other than an amount of tax prescribed
for the purposes of paragraph (a)) under
subsection 165(1) in respect of a supply
(other than a supply to which paragraph
(c) applies) made by a person other than
a selected listed financial institution to
the financial institution that would, but
for an election made under section 150,
have become payable by the financial
institution during the particular reporting
period, and
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(c) all amounts each of which is an
amount, in respect of a supply made
during the particular reporting period of
property or a service to which the
financial institution and another person
have elected to have this paragraph
apply, equal to tax calculated on the cost
to the other person of supplying the
property or service to the financial
institution excluding any remuneration
to employees of the other person, the cost
of financial services and tax under this
Part;
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B is the total of
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(a) all input tax credits (other than input
tax credits in respect of an amount of tax
that is prescribed for the purposes of
paragraph (a) of the description of A) 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 institution for the particular
reporting period, and
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(b) all amounts each of which would be
an input tax credit (other than an input
tax credit in respect of an amount of tax
that is prescribed for the purposes of
paragraph (a) of the description of A) of
the financial institution for the particular
reporting period of the financial
institution in respect of property or a
service if tax became payable during the
particular reporting period in respect of
the supply of the property or service
equal to the amount included for the
particular reporting period under
paragraph (b) or (c) of the description of
A in respect of the supply;
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C is the financial institution's percentage for
the participating province for the taxation
year, determined in accordance with the
prescribed rules that apply to financial
institutions of that class;
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D is the tax rate for the participating province;
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E is 7%;
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F is the total of
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(a) all tax (other than a prescribed
amount of tax ) under subsection 165(2)
in respect of supplies made in the
participating province to the financial
institution or under section 212.1 in
respect of goods imported by the
financial institution for use in the
participating province that became
payable 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
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(b) all amounts each of which is an
amount, in respect of a supply made
during the particular reporting period of
property or a service to which the
financial institution and another person
have elected to have paragraph (c) of the
description of A apply, equal to tax
payable by the other person under any of
subsection 165(2), 212.1, 218.1 or
Division IV.1 that is included in the cost
to the other person of supplying the
property or service to the financial
institution; and
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G is the total of all amounts each of which is
a positive or negative prescribed amount.
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Exclusions
from
adjustment
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(3) In determining an amount that a selected
listed financial institution is required to add or
may deduct under subsection (2) in
determining its net tax,
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(a) tax that the financial institution is
deemed to have paid under any of
subsections 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
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(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.
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Election
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(4) Where a person other than a selected
listed financial institution and a selected listed
financial institution have made jointly an
election under section 150, the person and the
financial institution may make jointly an
election under this subsection to have
paragraph (c) of the description of A in
subsection (2) apply to every supply to which
subsection 150(1) applies that is made by the
person to the financial institution at a time the
election made under this subsection is in
effect.
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Form and
manner of
filing
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(5) An election under subsection (4)
relating to supplies made by a person other
than a selected financial institution to a
selected listed financial institution shall
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(a) be made in prescribed form containing
prescribed information;
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(b) specify the day the election is to become
effective; and
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(c) be filed by the financial institution with
the Minister in prescribed manner on or
before the day on or before which a return
under Division V for the reporting period of
the financial institution in which the
election is to become effective is required to
be filed.
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Effect of the
election
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(6) An election made jointly under
subsection (4) by a person and a selected listed
financial institution shall be effective for the
period beginning on the day specified in the
election and ending on the earliest of
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(a) the day the election made jointly by the
person and the financial institution under
section 150 ceases to be effective; and
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(b) a day that the person and the financial
institution specify in a notice of revocation
in prescribed form containing prescribed
information filed jointly by the person and
the financial institution with the Minister in
prescribed manner, which day is at least
three hundred and sixty-five days after the
day specified in the election made under
subsection (4);
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(c) the day the person becomes a selected
listed financial institution; and
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(d) the day the financial institution ceases to
be a selected listed financial institution.
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Information
requirements
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(7) For the purposes of this section,
subsections 169(4) and (5) and 223(2) apply
with respect to any amount that is included in
the description of F in subsection (2) as if that
amount were an input tax credit.
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Meaning of
``specified
partnership''
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(8) For the purposes of this section, a
partnership is a ``specified partnership''
during a taxation year of the partnership if, at
any time in the taxation year, the partnership
has
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(a) a member that, in the taxation year of the
member in which the taxation year of the
partnership ends,
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(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
participating provinces from a business
(within the meaning assigned by
subsection 248(1) of the Income Tax Act)
carried on through the partnership,
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(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
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(iii) where the member is another
partnership, 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
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(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,
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(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,
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(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
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(iii) where the member is another
partnership, 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.
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(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
period 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:
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(2) In determining the net tax for a
particular 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 province, by the formula
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[(A - B) x (H/I) x C x (D/E)] - F + G
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where
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A is the total of
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(a) all tax (other than a prescribed
amount of 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,
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(b) all amounts each of which is tax (other
than an amount of tax prescribed for the
purposes of paragraph (a)) under
subsection 165(1) in respect of a supply
(other than a supply to which paragraph
(c) applies) made by a person other than
a selected listed financial institution to
the financial institution that would, but
for an election made under section 150,
have become payable by the financial
institution during the particular reporting
period, and
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(c) all amounts each of which is an
amount, in respect of a supply made
during the particular reporting period of
property or a service to which the
financial institution and another person
have elected to have this paragraph
apply, equal to tax calculated on the cost
to the other person of supplying the
property or service to the financial
institution excluding any remuneration
to employees of the other person, the cost
of financial services and tax under this
Part;
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B is the total of
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(a) all input tax credits (other than input
tax credits in respect of an amount of tax
that is prescribed for the purposes of
paragraph (a) of the description of A) 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 institution for the particular
reporting period, and
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(b) all amounts each of which would be
an input tax credit (other than an input
tax credit in respect of an amount of tax
that is prescribed for the purposes of
paragraph (a) of the description of A) of
the financial institution for the particular
reporting period of the financial
institution in respect of property or a
service if tax became payable in respect
of the supply of the property or service
equal to the amount included for the
particular reporting period under
paragraph (b) or (c) of the description of
A in respect of the supply;
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C is the financial institution's percentage for
the participati ng province for the taxation
year, determined in accordance with the
prescribed rules that apply to financial
institutions of that class;
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D is the tax rate for the participating province;
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E is 7%;
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F is the total of
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(a) all tax (other than a prescribed
amount of tax) under subsection 165(2)
in respect of supplies made in the
participating province to the financial
institution or under section 212.1 in
respect of goods imported by the
financial institution for use in the
participating province that became
payable 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
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(b) all amounts each of which is an
amount, in respect of a supply made
during the particular reporting period of
property or a service to which the
financial institution and another person
have elected to have paragraph (c) of the
description of A apply, equal to tax
payable by the other person under any of
subsection 165(2), 212.1, 218.1 or
Division IV.1 that is included in the cost
to the other person of supplying the
property or service to the financial
institution; and
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G is the total of all amounts each of which is
a positive or negative prescribed amount;
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H is the number of days in the particular
reporting period after March 1997; and
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I is the total number of days in the particular
reporting period.
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1993, c. 27,
s. 89(1)
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209. (1) Subsection 226(4) of the Act is
replaced by the following:
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Input tax
credit for
returnable
containers
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(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
registrant 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.
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1993, c. 27,
s. 89(1)
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(2) Subsection 226(6) of the Act is
replaced by the following:
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Change in
practice
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(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.
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1993, c. 27,
s. 89(1)
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(3) The portion of subsection 226(7) of the
Act before paragraph (b) is replaced by the
following:
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Change in
practice
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(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
acquired, for the purposes of this Part, the
registrant is deemed
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(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
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(4) Subsections (1) to (3) come into force
on April 1, 1997.
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1990, c. 45,
s. 12(1);
1993, c. 27,
s. 203(Sch. I,
item 1(b))
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210. (1) Subsection 228(1) of the Act is
replaced by the following:
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Calculation of
net tax
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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.
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1996, c. 21,
s. 65(1)
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(2) The portion of subsection 228(2) of the
Act before paragraph (a) is replaced by the
following:
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Remittance
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(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,
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