Bill C-103

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Royal Assent

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	42-43-44 ELIZABETH II
	CHAPTER 46
	An Act to amend the Excise Tax Act and the Income Tax Act
	[Assented to 15th December, 1995]
	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; 1994, cc. 9, 13, 21, 29, 41; 1995, c. 5	EXCISE TAX ACT
	*1. (1) The Excise Tax Act* is amended by adding the following after section 34:**
	PART V.1
	TAX ON SPLIT-RUN PERIODICALS
Definitions	35. (1) In this Part,
``distributor'' « distributeur »	``distributor'' of a periodical means a person, other than the publisher of the periodical, who
	(a) whether or not taking actual possession of copies of the periodical, oversees for consideration the distribution of copies of the periodical to wholesalers of the periodical, or
	(b) where there is no wholesaler of the periodical and whether or not taking actual possession of copies of the periodical, oversees for consideration the distribution of copies of the periodical to retailers of the periodical;
``editorial material'' « corps rédactionnel »	``editorial material'' means printed material other than advertisements but does not include
	(a) lists of prices offered or asked for stocks, bonds or other financial instruments, or the number of stocks, bonds or financial instruments, or the value of bonds or financial instruments, exchanged on a securities exchange as released by the exchange,
	(b) lists of prices offered or asked for commodities, or the amount or value of commodities, exchanged on a commodities exchange as released by the exchange,
	(c) lists of exchange rates for currencies offered by money changers,
	(d) schedules of programs on broadcast media including brief descriptions of the programs, or
	(e) prescribed material;
``excluded edition'' « édition exclue »	``excluded edition'' of an issue of a periodical means an edition of the issue the circulation of which in Canada, if any, is less than its circulation outside Canada;
``gross fee'' « prix global »	``gross fee'' for a particular advertisement in a split-run edition of a periodical means the amount that is the total of
	(a) the greater of
	(i) the amount charged for a single insertion of an advertisement of the same size, character and location in the edition as the particular advertisement, determined in accordance with the schedule of advertising rates made public by the publisher of the periodical in respect of, or, if not made public, used by the publisher in charging for, advertisements included in the edition, and
	(ii) the amount actually paid by the advertiser for the insertion of the particular advertisement in the edition, and
	(b) any additional fees, charges or other amounts that are or were charged by the publisher for including the particular advertisement in the edition,
	but does not include any tax imposed in respect of the particular advertisement that is based on that amount or any portion of it;
``periodical'' « périodique »	``periodical'' means printed material that is published in a series of issues, bound or unbound, that appear regularly not less than twice in a year and, excluding special issues, not more than once in a week, whether the period between issues is constant or varies from issue to issue, but does not include a catalogue all or substantially all of which is made up of advertisements;
``publisher'' « éditeur »	``publisher'' of a periodical means the person who has the right to produce and publish issues of the periodical under the name or title of the periodical;
``responsible person'' « responsable »	``responsible person'' in respect of a split-run edition of a periodical means
	(a) where the publisher of the periodical is resident in Canada, the publisher,
	(b) where the publisher is not resident in Canada but a person connected with the publisher is resident in Canada, that person,
	(c) where neither the publisher nor any person connected with the publisher is resident in Canada but the distributor of the periodical is resident in Canada, the distributor,
	(d) where none of the publisher, persons connected with the publisher and the distributor are resident in Canada but the edition or part of it is printed in Canada, the person who prints the edition or part, and
	(e) where none of the publisher, persons connected with the publisher and the distributor are resident in Canada and no part of the edition is printed in Canada, but the wholesaler of the periodical is resident in Canada, the wholesaler;
``retailer'' « vendeur au détail »	``retailer'' of a periodical means a person who sells copies of the periodical to consumers otherwise than by subscription;
``split-run edition'' « édition à tirage dédoublé »	``split-run edition'' of a periodical means an edition of an issue of the periodical
	(a) that is distributed in Canada,
	(b) in which more than 20% of the editorial material is the same or substantially the same as editorial material that appears in one or more excluded editions of one or more issues of one or more periodicals, and
	(c) that contains an advertisement that does not appear in identical form in all those excluded editions;
``wholesaler'' « vendeur en gros »	``wholesaler'' of a periodical means a person who, either through an agent or otherwise, takes delivery of copies of the periodical, delivers the copies to retailers of the periodical for sale and recovers unsold copies from the retailers for disposal in accordance with instructions from the distributor or the publisher of the periodical.
Meaning of ``connected''	(2) For the purposes of this Part, a person is connected with another person if
	(a) one of them is controlled by the other; or
	(b) both of them are controlled by the same person.
Meaning of ``controlled''	(3) For the purpose of subsection (2),
	(a) a corporation is controlled at any time by a particular person if 50% or more of its issued share capital, having full voting rights at annual meetings of its shareholders, belongs at that time
	(i) to the particular person,
	(ii) to other persons with whom the particular person does not deal at arm's length, or
	(iii) to the particular person and other persons with whom the particular person does not deal at arm's length; and
	(b) a partnership is controlled at any time by a particular person if
	(i) the particular person is,
	(ii) other persons with whom the particular person does not deal at arm's length are, or
	(iii) the particular person and other persons with whom the particular person does not deal at arm's length are,
	entitled to receive 50% or more of
	(iv) the partnership's income from all sources for the partnership's fiscal period that includes that time, or
	(v) the total amount that would be paid to all the members of the partnership if it were wound up at that time.
Editions of issues	(4) For the purposes of this Part,
	(a) where an issue of a periodical is published in several versions, each version is an edition of that issue; and
	(b) where an issue of a periodical is published in only one version, that version is an edition of that issue.
Exclusions from split-run edition	(5) For the purposes of this Part, where a particular edition of an issue of a periodical would, but for this subsection, be a split-run edition, the particular edition is not a split-run edition if
	(a) the particular edition is an excluded edition of that issue; or
	(b) all the advertisements in the particular edition appear in identical form in one or more of the excluded editions of that issue having a combined circulation outside Canada that is more than the circulation in Canada of the particular edition.
Imposition of tax	36. (1) There shall be imposed, levied and collected in respect of each split-run edition of a periodical a tax equal to 80% of the value of all the advertisements in the edition.
Liability for tax	(2) The tax imposed under subsection (1) in respect of a split-run edition of a periodical shall be paid by the responsible person in respect of the edition.
Time of payment and return	37. On or before the last day of the month following the month in which a split-run edition of a periodical is published, the responsible person in respect of the edition shall pay the tax in respect of the edition and file a return in prescribed form.
Value of advertising	38. For the purposes of this Part, the value of all advertisements in a split-run edition of a periodical is the total of all the gross fees for all the advertisements contained in the edition.
Grandfathered periodicals	39. Where, in the 12-month period ending on March 26, 1993, a particular number of issues of a periodical each of which had split-run editions were published and distributed in Canada, section 36 does not apply to impose a tax on a number of issues of that periodical that have split-run editions published in any particular year that is equal to or less than that particular number, if those issues published in the particular year are similar, in editorial content and direction, to those issues published in that 12-month period.
Determining circulation	40. For the purposes of this Part, where audited circulation statistics for the circulation in any area of editions of a periodical are contained in a collection of such statistics that is regularly published by a person who has a business of publishing such collections and that is commonly referred to by advertising agencies in their operations, the statistics contained in the collection, that is the last such collection published by that person before the day on which a particular edition of the periodical is published, are conclusive evidence of the circulation in Canada and the circulation outside Canada of the particular edition to the extent that those statistics indicate its circulation in and outside Canada.
Language of editorial material	41. (1) Editorial material in a language that contains the same information as, and can reasonably be considered to be merely a translation of, editorial material in another language shall, for the purposes of this Part, be deemed to be the same as the editorial material in the other language.
Language of ads	(2) An advertisement in a language shall, for the purposes of this Part, be deemed not to be identical to an advertisement in another language, notwithstanding that they contain the same information and one can reasonably be considered to be a translation of the other.
Connected persons	41.1 Where, on the day on which an edition of a periodical is published, a responsible person in respect of the edition is connected with another person, the responsible person and the other person are jointly and severally liable for the payment of any tax in respect of the edition payable under section 36 by the responsible person.
Multiple distributors	41.2 (1) Where the responsible person in respect of an edition of a periodical is a distributor of the periodical and, on the day on which the edition is published, there is more than one distributor of the periodical resident in Canada, all the distributors of the periodical resident in Canada are jointly and severally liable for the payment of any tax in respect of the edition payable under section 36 by the responsible person.
Multiple printers	(2) Where the responsible person in respect of an edition of a periodical is a person who printed it or part of it in Canada and there is more than one person who printed it or part of it in Canada, all the persons who printed it or part of it in Canada are jointly and severally liable for the payment of any tax in respect of the edition payable under section 36 by the responsible person.
Multiple wholesalers	(3) Where the responsible person in respect of an edition of a periodical is a wholesaler of the periodical and, on the day on which the edition is published, there is more than one wholesaler of the periodical resident in Canada, all the wholesalers of the periodical resident in Canada are jointly and severally liable for the payment of any tax in respect of the edition payable under section 36 by the responsible person.
Contribution	41.3 (1) A person who has paid the tax imposed under section 36 in respect of an edition of a periodical is entitled to contribution from any other person who is jointly and severally liable for payment of the tax.
Ultimate liability	(2) Where a responsible person in respect of an edition of a periodical (other than the publisher of the periodical) has paid the tax imposed under section 36 in respect of the edition, the responsible person is deemed to have paid the tax on behalf of the publisher and may recover the amount of the tax so paid from the publisher in a court of competent jurisdiction or deduct or withhold the amount of the tax so paid from any amount payable by the responsible person to the publisher or distributor of the periodical to the extent that the amount of the tax so paid has not been previously deducted or withheld or the publisher or distributor has not previously reimbursed the responsible person.
	(2) Subsection (1) applies to split-run editions of periodicals that are published after the day this Act is assented to.
1993, c. 25, s. 59	2. Subsection 66(2) of the Act is replaced by the following:
Where exemption not applicable	(2) Subsection (1) does not apply in respect of
	(a) taxes imposed under Part III in respect of tobacco products mentioned in Schedule II; or
	(b) tax imposed under Part V.1.
1993, c. 25, s. 60	3. Subsection 68.1(2) of the Act is replaced by the following:
Exceptions	(2) Subsection (1) does not apply in respect of
	(a) taxes imposed under Part III in respect of tobacco products mentioned in Schedule II; or
	(b) tax imposed under Part V.1.
R.S., c. 12 (4th Supp.), s. 32(1)	4. The portion of subsection 79(1) of the Act before paragraph (a) is replaced by the following:
Penalty and interest on default in paying taxes	79. (1) Subject to subsections (1.1) to (3), a person who defaults in paying tax within the time prescribed by section 37 or subsection 78(4), in addition to the amount in default, shall pay

Bill C-103

42-43-44 ELIZABETH II

CHAPTER 46

PART I

EXCISE TAX ACT

PART V.1

TAX ON SPLIT-RUN PERIODICALS