Bill C-24

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	(B) in any other case, ownership of the farmor's additional contribution is transferred to the farmee,
	(iii) all of the consideration for the farmor's additional contribution and the consideration for the service deemed to have been supplied by the farmee are deemed to become due at the time of transfer, and
	(iv) if, in addition to the farmee's contribution, the farmee supplies to the farmor other property or services (other than the service deemed under subparagraph (i) to have been supplied) for which part of the consideration is the farmor's additional contribution, the value of the consideration for the supply of the other property or services is deemed to be equal to the amount, if any, by which the value of that consideration, determined without reference to this subparagraph, exceeds the fair market value of the farmor's additional contribution.
	(4) Subsections (1) to (3) are deemed to have come into force on December 17, 1990 except that paragraph 162(4)(c) of the Act, as enacted by subsection (3), does not apply to agreements entered into on or before August 7, 1998.
1993, c. 27, s. 34(1)	27. (1) Subsection 167.2(1) of the Act is replaced by the following:
Supplies to non-resident persons of admissions to conventions	167.2 (1) If a sponsor of a convention makes a taxable supply of an admission to the convention to a non-resident person, the following shall not be included in calculating the tax payable in respect of the supply:
	(a) that portion of the consideration for the admission that is reasonably attributable to the provision of the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering; and
	(b) 50% of that portion of the consideration for the admission that is reasonably attributable to the provision of related convention supplies that are food or beverages or are supplied under a contract for catering.
	(2) Subsection (1) applies to supplies of admissions to a convention, all the supplies of admissions to which are made after June 4, 1999.
1997, c. 10, s. 161(3)	28. (1) Paragraph 169(3)(a) of the Act is replaced by the following:
	(a) the input tax credit is in respect of
	(i) tax that the person is deemed to have paid under subsection 171(1), 171.1(2), 206(2) or (3) or 208(2) or (3), or
	(ii) an amount of tax that is prescribed for the purposes of paragraph (a) of the description of F in subsection 225.2(2); or
	(2) Subsection (1) is deemed to have come into force on April 1, 1997.
1993, c. 27, s. 43(1)	29. (1) The definition ``sales aid'' in section 178.1 of the Act is replaced by the following:
``sales aid'' « matériel de promotion »	``sales aid'' of a person who is a direct seller or an independent sales contractor of a direct seller means
	(a) property (other than an exclusive product of the direct seller)
	(i) that is a customized business form or a sample, demonstration kit, promotional or instructional item, catalogue or other personal property acquired, manufactured or produced by the person for sale to assist in the promotion, sale or distribution of exclusive products of the direct seller, and
	(ii) that is neither sold nor held for sale by the person to an independent sales contractor of the direct seller who is acquiring the property for use as capital property, and
	(b) the service of shipping or handling, or processing an order for, either property included in paragraph (a) or an exclusive product of the direct seller;
	(2) Section 178.1 of the Act is amended by adding the following in alphabetical order:
``applicable provincial tax'' « taxe provinciale applicable »	``applicable provincial tax'' means any amount that can reasonably be attributed to a tax, duty or fee imposed under an Act of the legislature of a province and prescribed for the purposes of section 154;
	(3) Subsections (1) and (2) are deemed to have come into force on February 24, 1998 except that paragraph (b) of the definition ``sales aid'' in section 178.1 of the Act, as enacted by subsection (1), applies to a service only if no consideration for the supply of the service became due, or was paid, on or before that day.
	30. (1) Section 178.3 of the Act is amended by adding the following after subsection (6):
Bad debt on sale by contractor	(7) If
	(a) a direct seller has made a supply of an exclusive product of the direct seller in circumstances in which an amount was required under paragraph (1)(d) to be added in determining the net tax of the direct seller,
	(b) a particular independent sales contractor of the direct seller has or would have, but for paragraph (2)(e), also made a supply of the product to a person with whom the particular contractor was dealing at arm's length (other than the direct seller and another independent sales contractor of the direct seller),
	(c) the direct seller has obtained evidence satisfactory to the Minister that the consideration and the tax payable in respect of the supply by the particular contractor have become in whole or in part a bad debt and that the amount of the bad debt has, at a particular time, been written off in the particular contractor's books of account, and
	(d) the direct seller pays to, or credits in favour of, the particular contractor an amount in respect of the product equal to the amount determined by the formula
	A x B/C
	where
	A is the tax payable in respect of the supply by the particular contractor,
	B is the total of the consideration and tax, and any applicable provincial tax in respect of that supply, remaining unpaid and written off at the particular time as a bad debt, and
	C is the total of the consideration and tax, and applicable provincial tax, payable in respect of that supply,
	the direct seller may, in determining the net tax for the particular reporting period of the direct seller in which the payment or credit is given or for a subsequent reporting period, deduct the amount paid or credited in a return under Division V filed by the direct seller within four years after the day on or before which the return for the particular reporting period is required to be filed.
Recovery of bad debt	(8) If all or part of a bad debt in respect of which a direct seller has made a deduction under subsection (7) is recovered, the direct seller shall, in determining the net tax for the direct seller's reporting period in which the bad debt or that part is recovered, add the amount determined by the formula
	A x B/C
	where
	A is the amount recovered;
	B is the tax payable in respect of the supply to which the bad debt relates; and
	C is the total of the consideration and tax, and any applicable provincial tax, payable in respect of that supply.
	(2) Subsection (1) applies to bad debts relating to supplies made after February 24, 1998.
	31. (1) Section 178.4 of the Act is amended by adding the following after subsection (6):
Bad debt on sale by contractor	(7) If
	(a) a distributor of a direct seller has made a supply of an exclusive product of the direct seller in circumstances in which an amount was required under paragraph (1)(d) to be added in determining the net tax of the distributor,
	(b) a particular independent sales contractor of the direct seller (other than the distributor) has or would have, but for paragraph (2)(d), also made a supply of the product to a person with whom the particular contractor was dealing at arm's length (other than the direct seller, distributor and another independent sales contractor of the direct seller),
	(c) the distributor has obtained evidence satisfactory to the Minister that the consideration and the tax payable in respect of the supply by the particular contractor have become in whole or in part a bad debt and that the amount of the bad debt has, at a particular time, been written off in the particular contractor's books of account, and
	(d) the distributor pays to, or credits in favour of, the particular contractor an amount in respect of the product equal to the amount determined by the formula
	A x B/C
	where
	A is the tax payable in respect of the supply by the particular contractor,
	B is the total of the consideration and tax, and any applicable provincial tax, in respect of that supply remaining unpaid and written off at the particular time as a bad debt, and
	C is the total of the consideration and tax, and applicable provincial tax, payable in respect of that supply,
	the distributor may, in determining the net tax for the particular reporting period of the distributor in which the payment or credit is given or for a subsequent reporting period, deduct the amount paid or credited in a return under Division V filed by the distributor within four years after the day on or before which the return for the particular reporting period is required to be filed.
Recovery of bad debt	(8) If all or part of a bad debt in respect of which a distributor of a direct seller has made a deduction under subsection (7) is recovered, the distributor shall, in determining the net tax for the distributor's reporting period in which the bad debt or that part is recovered, add the amount determined by the formula
	A x B/C
	where
	A is the amount recovered;
	B is the tax payable in respect of the supply to which the bad debt relates; and
	C is the total of the consideration and tax, and any applicable provincial tax, payable in respect of that supply.
	(2) Subsection (1) applies to bad debts relating to supplies made after February 24, 1998.
	32. (1) The Act is amended by adding the following after section 178.6:
	Designated Charities
Meaning of ``specified service''	178.7 (1) For the purposes of this section, ``specified service'' means any service, other than a service
	(a) that is
	(i) the care, employment or training for employment of individuals with disabilities,
	(ii) an employment placement service rendered to such individuals, or
	(iii) the provision of instruction to assist such individuals in securing employment; and
	(b) the recipient of which is a public sector body or a board, commission or other body established by a government or a municipality.
Charity supplying specified service	(2) A charity may apply to the Minister, in prescribed form containing prescribed information, to be designated for the purposes of paragraph 1(d.1) of Part V.1 of Schedule V if
	(a) one of the main purposes of the charity is the provision of employment, training for employment or employment placement services for individuals with disabilities or the provision of instructional services to assist such individuals in securing employment; and
	(b) the charity supplies, on a regular basis, specified services that are performed, in whole or in part, by individuals with disabilities.

Designation by the Minister	(3) On application by a charity under subsection (2), the Minister may, by notice in writing, designate the charity for the purposes of paragraph 1(d.1) of Part V.1 of Schedule V, effective on the first day of a reporting period specified in the notice, if
	(a) the Minister is satisfied that the conditions described in paragraphs (2)(a) and (b) are met; and
	(b) a revocation under subsection (4) pursuant to a request made by the charity has not become effective in the 365-day period ending immediately before that day.
Revocation of designation	(4) The Minister may, by notice in writing, revoke a designation of a charity, effective on the first day of a reporting period specified in the notice, if
	(a) the Minister is satisfied that the conditions described in paragraphs (2)(a) and (b) are no longer met; or
	(b) the charity makes a request in writing to the Minister that the designation be revoked and the designation had not become effective in the 365-day period ending immediately before that day.

	(2) Subsection (1) is deemed to have come into force on February 24, 1998 and applies to reporting periods beginning after that day.
1997, c. 10, s. 174(1)	33. (1) The definition ``coupon'' in subsection 181(1) of the Act is replaced by the following:
``coupon'' « bon »	``coupon'' includes a voucher, receipt, ticket or other device but does not include a gift certificate or a barter unit (within the meaning of section 181.3).
1993, c. 27, s. 46(1)	(2) Subsection 181(4) of the Act is replaced by the following:
Acceptance of other coupons	(4) For the purposes of this Part, if a registrant accepts, in full or partial consideration for a supply of property or a service, a coupon that may be exchanged for the property or service or that entitles the recipient of the supply to a reduction of, or a discount on, the price of the property or service and paragraphs (2)(a) to (c) do not apply in respect of the coupon, the value of the consideration for the supply is deemed to be the amount, if any, by which the value of the consideration for the supply as otherwise determined for the purposes of this Part exceeds the discount or exchange value of the coupon.
1997, c. 10, s. 174(3)	(3) Paragraph 181(5)(c) of the Act is replaced by the following:
	(c) if the supply is not a zero-rated supply and the coupon entitled the recipient to a reduction of the price of the property or service equal to a fixed dollar amount specified in the coupon (in this paragraph referred to as the ``coupon value''), the particular person, if a registrant (other than a registrant who is a prescribed registrant for the purposes of subsection 188(5)) at that time, may claim an input tax credit for the reporting period of the particular person that includes that time equal to the tax fraction of the coupon value, unless all or part of that coupon value is an amount of an adjustment, refund or credit to which subsection 232(3) applies.
	(4) Subsection (1) applies
	(a) for the purpose of applying section 181 of the Act on and after December 10, 1998; and
	(b) for the purpose of applying that section, to anything accepted or redeemed before that day, in determining
	(i) any rebate under subsection 261(1) of the Act for which an application is received by the Minister of National Revenue on or after that day, or

Bill C-24

Designated Charities