International Travel

Definitions

180.1 (1) The definitions in this subsection apply in this section.

``internatio-
nal flight''
« vol interna-
tional »

``international flight'' means any flight (other than a flight originating and terminating in Canada) of an aircraft that is operated by a person in the course of a business of supplying passenger transportation services.

``internatio-
nal voyage''
« voyage interna-
tional »

``international voyage'' means any voyage (other than a voyage originating and terminating in Canada) of a vessel that is operated by a person in the course of a business of supplying passenger transportation services.

Delivery while on international travel

(2) For the purposes of this Part, where a supply of tangible personal property or a service (other than a passenger transportation service) is made to an individual on board an aircraft on an international flight or a vessel on an international voyage and physical possession of the property is transferred to the individual, or the service is wholly performed, on board the aircraft or vessel, the supply is deemed to have been made outside Canada.

(2) Subsection (1) applies to supplies made after April 23, 1996.

1993, c. 27, s. 46(1)

32. (1) Subsections 182(1) and (2) of the Act are replaced by the following:

Forfeiture, extinguished debt, etc.

182. (1) For the purposes of this Part, where at any time, as a consequence of the breach, modification or termination after 1990 of an agreement for the making of a taxable supply (other than a zero-rated supply) of property or a service in Canada by a registrant to a person, an amount is paid or forfeited to the registrant otherwise than as consideration for the supply, or a debt or other obligation of the registrant is reduced or extinguished without payment on account of the debt or obligation,

    (a) the consideration fraction of the amount paid, forfeited or extinguished, or by which the debt or obligation was reduced, as the case may be, is deemed to be consideration for the supply paid, at that time, by the person; and

    (b) the registrant is deemed to have collected, and the person is deemed to have paid, at that time, tax in respect of the supply calculated on that consideration.

Transitional

(2) Paragraph (1)(b) does not apply in respect of amounts paid or forfeited, and debts or other obligations reduced or extinguished, as a consequence of a breach, modification or termination of an agreement where

    (a) the agreement was entered into in writing before 1991;

    (b) the amount is paid or forfeited, or the debt or other obligation is reduced or extinguished, as the case may be, after 1992; and

    (c) tax in respect of the amount paid, forfeited or extinguished, or by which the debt or obligation was reduced, as the case may be, was not contemplated in the agreement.

Application of Division IX

(2.1) Division IX does not apply for the purposes of subsection (1).

(2) Subsection (1) is deemed to have come into force on April 24, 1996.

1993, c. 27, s. 47(2)

33. (1) Paragraph 183(1)(d) of the Act is replaced by the following:

    (d) where the supply referred to in paragraph (a) is a supply of real property included in section 9 of Part I of Schedule V, in section 1 of Part V.1 of that Schedule or in section 25 of Part VI of that Schedule, for the purposes of sections 193 and 257, the supply is deemed to be a taxable supply and the tax payable in respect of the supply is deemed to be equal to tax calculated on the fair market value of the property at that time.

1993, c. 27, s. 47(1)

(2) Paragraph 183(5)(a) of the Act is replaced by the following:

    (a) the creditor is deemed to have received, immediately after the particular time, a particular supply by way of sale of the property; and

1993, c. 27, s. 47(1)

(3) Paragraph 183(6)(a) of the Act is replaced by the following:

    (a) the creditor is deemed

      (i) to have received, immediately after the particular time, a supply by way of sale of the property, and

      (ii) except where

        (A) the property was, at the time it was seized or repossessed, specified tangible personal property having a fair market value in excess of the prescribed amount in respect of the property, and

        (B) tax would not have been payable had the property been purchased in Canada from the person at the time it was seized or repossessed,

      to have paid, immediately after the particular time, tax in respect of that supply equal to the tax fraction of the fair market value of the property at the time it was seized or repossessed; and

1993, c. 27, s. 47(3)

(4) The portion of subsection 183(7) of the Act before paragraph (a) is replaced by the following:

Sale of personal property

(7) For the purposes of this Part, where a creditor who has seized or repossessed personal property from a person in circumstances in which subsection (1) applies makes at any time a particular taxable supply of the property by way of sale (other than a supply deemed under this Part to have been made), the creditor was not deemed under subsection (5), (6) or (8) to have received a supply of the property at an earlier time and no tax would have been payable by the creditor had the creditor purchased the property from the person in Canada at the time it was seized or repossessed, except where

1993, c. 27, s. 47(3)

(5) Paragraph 183(7)(b) of the Act is replaced by the following:

    (b) the property was seized or repossessed by the creditor before 1994 or was, at the time of the seizure or repossession, specified tangible personal property having a fair market value in excess of the prescribed amount in respect of the property,

1993, c. 27, s. 47(4)

(6) Paragraph 183(8)(b) of the Act is replaced by the following:

    (b) the property was seized or repossessed by the creditor before 1994 or was, at the time it was seized or repossessed, specified tangible personal property having a fair market value in excess of the prescribed amount in respect of the property,

1993, c. 27, s. 47(6)

(7) The portion of subsection 183(10) of the Act before paragraph (b) is replaced by the following:

Debt security, etc.

(10) For the purposes of this Part, where

    (a) for the purposes of satisfying in whole or in part a debt or obligation owing by a person, a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of property,

(8) Section 183 of the Act is amended by adding the following after subsection (10):

Redemption of property

(10.1) For the purposes of this Part, where

    (a) for the purposes of satisfying in whole or in part a debt or obligation owing by a person (in this subsection referred to as the ``debtor''), a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of property (in this subsection referred to as the ``first supply''),

    (b) the recipient of the first supply has paid an amount (in this subsection referred to as the ``tax amount'') as or on account of tax with respect to that supply, and

    (c) under the Act or the agreement, the debtor has a right to redeem the property and the debtor exercises that right,

the following rules apply:

    (d) the redemption of the property is deemed to be a supply of the property made by way of sale by the recipient of the first supply to the debtor for no consideration, and

    (e) where the property was redeemed from the recipient of the first supply and an amount has been reimbursed by the debtor to the creditor or that recipient on account of the tax amount,

      (i) except for the purposes of this section, the debtor is deemed not to have supplied the property to the creditor under subsection (1) or to have received a supply of the property at the time of the redemption,

      (ii) the debtor is deemed, for the purposes of section 261, to have paid tax in error at the time of the redemption equal to the amount so reimbursed,

      (iii) where the tax amount has been included in determining a rebate or an input tax credit claimed by that recipient in an application or return, the amount of the rebate or the input tax credit shall be added in determining the net tax of that recipient for the reporting period in which the property was redeemed, and

      (iv) the tax amount shall not be included in determining a rebate or an input tax credit claimed by that recipient in an application or a return filed after the redemption of the property.

(9) Subsection (1) applies to supplies made after 1996.

(10) Subsections (2) and (3) apply after April 23, 1996.

(11) Subsections (4) to (6) apply to property that is supplied by a creditor after April 23, 1996.

(12) Subsection (7) applies to

    (a) any supply made after April 23, 1996; and

    (b) any supply made on or before that day unless

      (i) no amount was, on or before that day, charged or collected as or on account of tax under Part IX of the Act in respect of the supply, or

      (ii) an amount was charged or collected as or on account of tax under that Part in respect of the supply and, before that day, the Minister of National Revenue received an application under subsection 261(1) of the Act for a rebate in respect of that amount (other than an application deemed under paragraph 296(5)(a) of the Act to have been filed as a result of an assessment made after that day).

(13) Subsection (8) applies to redemptions of property occurring after April 23, 1996.

1993, c. 27, s. 48(2)

34. (1) Paragraph 184(1)(d) of the Act is replaced by the following:

    (d) in the case of a supply of real property included in section 9 of Part I of Schedule V, in section 1 of Part V.1 of that Schedule or in section 25 of Part VI of that Schedule, for the purposes of sections 193 and 257, the supply is deemed to be a taxable supply and the tax payable in respect of the supply is deemed to be equal to tax calculated on the fair market value of the property at that time.

1993, c. 27, s. 48(1)

(2) Paragraph 184(4)(a) of the Act is replaced by the following:

    (a) the insurer is deemed to have received, immediately after the particular time, a particular supply by way of sale of the property; and

1993, c. 27, s. 48(1)

(3) Paragraph 184(5)(a) of the Act is replaced by the following:

    (a) the insurer is deemed

      (i) to have received, immediately after the particular time, a supply by way of sale of the property, and

      (ii) except where

        (A) the property was, at the time it was transferred, specified tangible personal property having a fair market value in excess of the prescribed amount in respect of the property, and

        (B) tax would not have been payable had the property been purchased in Canada from the person at the time it was transferred,

      to have paid, immediately after the particular time, tax in respect of that supply equal to the tax fraction of the fair market value of the property at the time it was transferred; and

1993, c. 27, s. 48(3)

(4) The portion of subsection 184(6) of the Act before paragraph (a) is replaced by the following:

Sale of personal property

(6) For the purposes of this Part, where an insurer to whom personal property has been transferred from a person in circumstances in which subsection (1) applies makes at any time a particular taxable supply of the property by way of sale (other than a supply deemed under this Part to have been made), the insurer was not deemed under subsection (4), (5) or (7) to have received a supply of the property at an earlier time and no tax would have been payable by the insurer had the insurer purchased the property from the person in Canada at the time it was transferred, except where

1993, c. 27, s. 48(3)

(5) Paragraph 184(6)(b) of the Act is replaced by the following:

    (b) the property was transferred to the insurer before 1994 or was, at the time of the transfer, specified tangible personal property having a fair market value in excess of the prescribed amount in respect of the property,

1993, c. 27, s. 48(4)

(6) Paragraph 184(7)(b) of the Act is replaced by the following:

    (b) the property was transferred to the insurer before 1994 or was, at the time it was transferred, specified tangible personal property having a fair market value in excess of the prescribed amount in respect of the property,

(7) Subsection (1) applies to supplies made after 1996.

(8) Subsections (2) and (3) apply after April 23, 1996.

(9) Subsections (4) to (6) apply to property that is supplied by an insurer after April 23, 1996.

1994, c. 9, s. 11(1)

35. (1) Subsection 185(1) of the Act is replaced by the following:

Financial services - input tax credits

185. (1) Where tax in respect of property or a service acquired or imported by a registrant who is engaged in commercial activities becomes payable by the registrant at a time when the registrant is neither a listed financial institution nor a person who is a financial institution because of paragraph 149(1)(b), for the purpose of determining an input tax credit of the registrant in respect of the property or service and for the purposes of Subdivision d, to the extent (determined in accordance with subsection 141.01(2)) that the property or service was acquired or imported for consumption, use or supply in the course of making supplies of financial services that relate to commercial activities of the registrant,

    (a) where the registrant is a financial institution because of paragraph 149(1)(c), the property or service is deemed, notwithstanding subsection 141.01(2), to have been acquired or imported for consumption, use or supply in the course of those commercial activities except to the extent that the property or service was acquired or imported for consumption, use or supply in the course of activities of the registrant that relate to

      (i) credit cards or charge cards issued by the registrant, or

      (ii) the making of any advance, the lending of money or the granting of any credit; and

    (b) in any other case, the property or service is deemed, notwithstanding subsection 141.01(2), to have been acquired or imported for consumption, use or supply in the course of those commercial activities.

(2) Subsection (1) applies to property and services acquired or imported in taxation years of registrants beginning after April 23, 1996.

1993, c. 27, s. 54(2)

36. (1) Subparagraph 190(1)(f)(ii) of the Act is replaced by the following:

      (ii) a personal trust that acquires the property at that time to hold or use exclusively as a place of residence of an individual who is a beneficiary of the trust,

(2) Subsection (1) applies after April 23, 1996.

37. (1) Section 191 of the Act is amended by adding the following after subsection (6):

Exception for communal organizations

(6.1) Subsections (1) to (4) do not apply to a builder of a residential complex or an addition to a residential complex where