Benefits to shareholders, etc.	(2) For the purposes of this Part, where at any time a registrant that is a corporation, partnership, trust, charity, public institution or non-profit organization appropriates any property (other than capital property of the registrant) that was acquired, manufactured or produced, or any service acquired or performed, in the course of commercial activities of the registrant, to or for the benefit of a shareholder, partner, beneficiary or member of the registrant or any individual related to such a shareholder, partner, beneficiary or member, in any manner whatever (otherwise than by way of a supply made for consideration equal to the fair market value of the property or service), the registrant is deemed
	(2) Subsection (1) is deemed to have come into force on January 1, 1997.
1993, c. 27, s. 40(1); 1994, c. 21, ss. 126(1)(F), (2), (3)	22. (1) Subsection 173(1) of the Act is replaced by the following:
Employee and shareholder benefits	173. (1) Where a registrant makes a supply (other than an exempt or zero-rated supply) of property or a service to an individual or a person related to the individual and
	(a) an amount (in this subsection referred to as the ``benefit amount'') in respect of the supply is required under paragraph 6(1)(a), (e), (k) or (l) or subsection 15(1) of the Income Tax Act to be included in computing the individual's income for a taxation year of the individual, or
	(b) the supply relates to the use or operation of an automobile and an amount (in this subsection referred to as a ``reimbursement'') is paid by the individual or a person related to the individual that reduces the amount in respect of the supply that would otherwise be required under paragraph 6(1)(e), (k) or (l) or subsection 15(1) of that Act to be so included,
	the following rules apply:
	(c) in the case of a supply of property otherwise than by way of sale, the use made by the registrant in so providing the property to the individual or person related to the individual is deemed, for the purposes of this Part, to be use in commercial activities of the registrant and, to the extent that the registrant acquired or imported the property for the purpose of making that supply, the registrant is deemed, for the purposes of this Part, to have so acquired or imported the property for use in commercial activities of the registrant, and
	(d) in any case, except where
	(i) the registrant was, because of section 170, not entitled to claim an input tax credit in respect of the last acquisition or importation of the property or service by the registrant,
	(ii) an election under subsection (2) by the registrant in respect of the property is in effect at the beginning of the taxation year,
	(iii) the registrant is an individual or a partnership and the property is a passenger vehicle or aircraft of the registrant that is not used by the registrant exclusively in commercial activities of the registrant, or
	(iv) the registrant is not an individual, a partnership or a financial institution and the property is a passenger vehicle or aircraft of the registrant that is not used by the registrant primarily in commercial activities of the registrant,
	for the purpose of determining the net tax of the registrant,
	(v) the total of the benefit amount and all reimbursements is deemed to be the total consideration payable in respect of the provision during the year of the property or service to the individual or person related to the individual,
	(vi) the tax calculated on the total consideration is deemed to be equal to
	(A) where the benefit amount is an amount that is or would, if the individual were an employee of the registrant and no reimbursements were paid, be required under paragraph 6(1)(k) or (l) of the Income Tax Act to be included in computing the individual's income, the prescribed percentage of the total consideration, and
	(B) in any other case, 6/106ths of the total consideration, and
	(vii) that tax is deemed to have become collectible, and to have been collected, by the registrant
	(A) except where clause (B) applies, on the last day of February of the year following the taxation year, and
	(B) where the benefit amount is or would, if no reimbursements were paid, be required under subsection 15(1) of that Act to be included in computing the individual's income and relates to the provision of the property or service in a taxation year of the registrant, on the last day of that taxation year.
	(2) Paragraph 173(3)(a) of the Act is replaced by the following:
	(a) notwithstanding paragraph (1)(c), the registrant is deemed to have begun, on that day, to use the property exclusively in activities of the registrant that are not commercial activities and, at all times thereafter until the registrant next disposes of or ceases to lease the property, the registrant is deemed to use the property exclusively in activities of the registrant that are not commercial activities;
	(3) Subsection 173(3) of the Act is amended by striking out the word ``and'' at the end of paragraph (b), by adding the word ``and'' at the end of paragraph (c) and by adding the following after paragraph (c):
	(d) there shall not be included, in determining an input tax credit claimed by the registrant in the return under section 238 for the particular or any subsequent reporting period, tax calculated on an amount of consideration, or a value determined under section 215, that can reasonably be attributed to
	(i) any property that is acquired or imported for consumption or use in operating the vehicle or aircraft in respect of which the election is made and that is, or is to be, used or consumed after that day, or
	(ii) that portion of any service relating to the operation of that vehicle or aircraft that is, or is to be, rendered after that day; and
	(e) where an amount in respect of any tax referred to in paragraph (d) was included in determining an input tax credit claimed by the registrant in a return under section 238 for a reporting period ending before the particular reporting period, that amount shall be added in determining the net tax of the registrant for the particular reporting period.
	(4) Subsections (1) and (2) apply to the 1996 and subsequent taxation years.
	(5) Subsection (3) applies for the purpose of determining the net tax of a registrant for reporting periods ending after 1995 except that paragraph 173(3)(d) of the Act, as enacted by subsection (3), applies to property or services acquired or imported for consumption or use in operating a vehicle or aircraft in respect of which an election under subsection 173(2) of the Act becomes effective before 1996 as if the election had become effective on January 1, 1996.
1994, c. 9, s. 9(1)	23. (1) Subparagraph 174(a)(iii) of the Act is replaced by the following:
	(iii) where the person is a charity or a public institution, to a volunteer who gives services to the charity or institution
1994, c. 9, s. 9(1)	(2) Subparagraph 174(c)(ii) of the Act is replaced by the following:
	(ii) where the person is a partnership and the allowance is paid to a member of the partnership, if the member were an employee of the partnership, or, where the person is a charity or a public institution and the allowance is paid to a volunteer, if the volunteer were an employee of the charity or institution,
1994, c. 9, s. 9(1)	(3) The portion of section 174 of the Act after paragraph (c) is replaced by the following:
	the following rules apply:
	(d) the person is deemed to have received a supply of the property or service,
	(e) any consumption or use of the property or service by the employee, member or volunteer is deemed to be consumption or use by the person and not by the employee, member or volunteer, and
	(f) the person is deemed to have paid at the time the allowance is paid, tax in respect of the supply equal to the tax fraction of the allowance.
	(4) Subsections (1) and (2) are deemed to have come into force on January 1, 1997.
	(5) Subsection (3) is deemed to have come into force on December 17, 1990 but does not apply for the purpose of determining any amount claimed (other than an amount deemed under paragraph 296(5)(a) of the Act to have been claimed as a result of an assessment made after April 23, 1996) in a return under Division V, or in an application under Division VI, of Part IX of the Act that is received by the Minister of National Revenue before April 23, 1996.
1994, c. 9, s. 9(1)	24. (1) Section 175 of the Act is replaced by the following:
Employee, partner or volunteer reimburse- ment	175. (1) Where an employee of an employer, a member of a partnership or a volunteer who gives services to a charity or public institution acquires or imports property or a service for consumption or use in relation to activities of the employer, partnership, charity or public institution (each of which is referred to in this subsection as the ``person''), the employee, member or volunteer paid the tax payable in respect of that acquisition or importation and the person pays an amount to the employee, member or volunteer as a reimbursement in respect of the property or service, for the purposes of this Part,
	(a) the person is deemed to have received a supply of the property or service;
	(b) any consumption or use of the property or service by the employee, member or volunteer in relation to activities of the person is deemed to be consumption or use by the person and not by the employee, member or volunteer; and
	(c) the person is deemed to have paid, at the time the reimbursement is paid, tax in respect of the supply equal to the amount determined by the formula
	A x B
	where
	A is the tax paid by the employee, member or volunteer in respect of the acquisition or importation of the property or service by the employee, member or volunteer, and
	B is the lesser of
	(i) the percentage of the cost to the employee, member or volunteer of the property or service that is reimbursed, and
	(ii) the extent (expressed as a percentage) to which the property or service was acquired or imported by the employee, member or volunteer for consumption or use in relation to activities of the person.
Exception	(2) Subsection (1) does not apply to a reimbursement in respect of property or a service acquired or imported by a member of a partnership where paragraph 272.1(2)(b) applies to the acquisition or importation and the reimbursement is paid to the member after the member files with the Minister a return of the member under section 238 in which an input tax credit in respect of the property or service is claimed.
Warrantee reimburse- ment	175.1 Where
	(a) the beneficiary of a warranty (other than an insurance policy) in respect of the quality, fitness or performance of tangible property acquires or imports property or a service in respect of which tax is payable by the beneficiary, and
	(b) a registrant pays to the beneficiary, under the terms of the warranty, an amount as a reimbursement in respect of the property or service and therewith provides written indication that a portion of the amount is on account of tax,
	the following rules apply:
	(c) the registrant may claim an input tax credit, for the reporting period of the registrant in which the reimbursement is paid, equal to the amount (referred to in this section as the ``tax reimbursed'') determined by the formula
	A x B/C
	where
	A is the tax payable by the beneficiary in respect of the supply to, or importation by, the beneficiary of the property or service,
	B is the amount of the reimbursement, and
	C is the cost to the beneficiary of the property or service, and
	(d) where the beneficiary is a registrant who was entitled to claim an input tax credit, or a rebate under Division VI, in respect of the property or service, the beneficiary is deemed, for the purposes of this Part, to have made a taxable supply and to have collected, at the time the reimbursement is paid, tax in respect of the supply equal to the amount determined by the formula
	A x B/C
	where
	A is the tax reimbursed,
	B is the total of the input tax credits and rebates under Division VI that the beneficiary was entitled to claim in respect of the property or service, and
	C is the tax payable by the beneficiary in respect of the supply to, or importation by, the beneficiary of the property or service.
	(2) Subsection (1) is deemed to have come into force on December 17, 1990 except that
	(a) it does not apply for the purpose of determining any amount claimed (other than an amount deemed under paragraph 296(5)(a) of the Act to have been claimed as a result of an assessment made after April 23, 1996) in a return under Division V, or in an application under Division VI, of Part IX of the Act that is received by the Minister of National Revenue before April 23, 1996;
	(b) in applying subsection 175(1) of the Act, as enacted by subsection (1), before 1997, it shall be read as if no reference were made to a public institution;
	(c) in applying subsection 175(2) of the Act, as enacted by subsection (1), on or before April 23, 1996, the reference in that subsection to ``paragraph 272.1(2)(b)'' shall be read as a reference to ``subsection 145(2)''; and
	(d) section 175.1 of the Act, as enacted by subsection (1), applies only to amounts reimbursed after April 23, 1996.
1994, c. 45, s. 12(1)	24.1 (1) The heading before section 176 of the Act is replaced by the following: