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Excise Tax Act (R.S.C., 1985, c. E-15)

Full Document:  

Act current to 2024-02-06 and last amended on 2024-01-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION IIGoods and Services Tax (continued)

SUBDIVISION DCapital Property (continued)

Capital Real Property

Marginal note:Application

  •  (1) Subject to subsection 211(1), this section does not apply in respect of property acquired by a registrant who is

    • (a) an individual;

    • (b) a public sector body that is not a financial institution; or

    • (c) a prescribed registrant.

  • Marginal note:Beginning use in commercial activities

    (2) For the purposes of this Part, where a registrant last acquired real property for use as capital property of the registrant but not for use in commercial activities of the registrant and the registrant begins, at a particular time, to use the property as capital property in commercial activities of the registrant, except where the registrant becomes a registrant at the particular time, the registrant shall be deemed

    • (a) to have received, at the particular time, a supply of the property by way of sale; and

    • (b) except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the basic tax content of the property at the particular time.

  • Marginal note:Increasing use in commercial activities

    (3) Where a registrant last acquired real property for use as capital property in commercial activities of the registrant and the registrant increases, at a particular time, the extent to which the property is used in commercial activities of the registrant, for the purposes of determining an input tax credit of the registrant, the registrant shall be deemed

    • (a) to have received, immediately before the particular time, a supply of a portion of the property for use as capital property exclusively in commercial activities of the registrant; and

    • (b) except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the amount determined by the formula

      A × B

      where

      A
      is the basic tax content of the property at the particular time, and
      B
      is the extent (expressed as a percentage of the total use of the property by the registrant at the particular time) to which the registrant increased the use of the property in commercial activities of the registrant at the particular time.
  • Marginal note:Ceasing use in commercial activities

    (4) For the purposes of this Part, where a registrant last acquired real property for use as capital property in commercial activities of the registrant and the registrant begins, at a particular time, to use the property exclusively for other purposes, the registrant shall be deemed

    • (a) to have made, immediately before the particular time, a supply of the property by way of sale and, except where the supply is an exempt supply, to have collected, at the particular time, tax in respect of the supply equal to the basic tax content of the property at the particular time; and

    • (b) to have received, at the particular time, a supply of the property by way of sale and, except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the amount determined under paragraph (a).

  • Marginal note:Reducing use in commercial activities

    (5) Except where subsection (4) applies, where a registrant last acquired real property for use as capital property in commercial activities of the registrant and the registrant reduces, at a particular time, the extent to which the property is used in commercial activities of the registrant, for the purposes of determining the net tax of the registrant for the reporting period of the registrant that includes the particular time, the registrant shall be deemed

    • (a) to have made, immediately before the particular time, a supply of a portion of the property; and

    • (b) except where the supply is an exempt supply, to have collected, at the particular time, tax in respect of the supply equal to the amount determined by the formula

      A × B

      where

      A
      is the basic tax content of the property at the particular time, and
      B
      is the extent (expressed as a percentage of the total use of the property by the registrant at the particular time) to which the registrant reduced the use of the property in commercial activities of the registrant at the particular time.
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 72
  • 1997, c. 10, s. 194

Marginal note:Individual ceasing use in commercial activities

  •  (1) For the purposes of this Part, where an individual who is a registrant last acquired real property for use as capital property in commercial activities of the individual, and not primarily for the personal use and enjoyment of the individual or a related individual, and the individual begins, at a particular time, to use the property exclusively for other purposes, or primarily for the personal use and enjoyment of the individual or a related individual, the individual shall be deemed

    • (a) to have made, immediately before the particular time, a supply of the property by way of sale and, except where the supply is an exempt supply, to have collected, at the particular time, tax in respect of the supply equal to the amount determined by the formula

      A - B

      where

      A
      is the basic tax content of the property at the particular time, and
      B
      is the tax, if any, that the individual is deemed under section 190 to have collected at the particular time in respect of the property; and
    • (b) to have received, at the particular time, a supply of the property by way of sale and, except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the amount determined under paragraph (a).

  • Marginal note:Individual reducing use in commercial activities

    (2) Except where subsection (1) applies, where an individual who is a registrant last acquired real property for use as capital property in commercial activities of the individual, and not primarily for the personal use and enjoyment of the individual or a related individual, and the individual reduces, at a particular time, the extent to which the property is used in commercial activities of the individual without beginning to use the property primarily for the personal use and enjoyment of the individual or a related individual, for the purposes of determining the net tax of the individual, the individual shall be deemed

    • (a) to have made, immediately before the particular time, a supply by way of sale of a portion of the property; and

    • (b) except where the supply is an exempt supply, to have collected, at the particular time, tax in respect of the supply equal to the amount determined by the formula

      (A × B) - C

      where

      A
      is the basic tax content of the property at the particular time,
      B
      is the extent (expressed as a percentage of the total use of the property by the individual at the particular time) to which the individual reduced the use of the property in commercial activities of the individual at the particular time, and
      C
      is the tax, if any, that the individual is deemed under section 190 to have collected at the particular time in respect of the property.
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 73
  • 1997, c. 10, s. 195

Marginal note:Acquisition of capital real property by individual

  •  (1) Subject to this section, where an individual who is a registrant acquires real property for use as capital property of the individual but primarily for the personal use and enjoyment of the individual or a related individual, the tax payable by the individual in respect of the acquisition of the property shall not be included in determining an input tax credit of the individual.

  • Marginal note:Individual beginning use in commercial activities

    (2) For the purposes of this Part, where an individual who is a registrant last acquired real property for use as capital property of the individual and

    • (a) primarily for the personal use and enjoyment of the individual or a related individual, or

    • (b) not for use in commercial activities of the individual,

    and the individual begins, at a particular time, to use the property as capital property in commercial activities of the individual and not primarily for the personal use and enjoyment of the individual or a related individual, the individual is deemed

    • (c) to have received, at the particular time, a supply by way of sale of the property; and

    • (d) except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the basic tax content of the property at the particular time.

  • Marginal note:Individual increasing use in commercial activities

    (3) Where an individual who is a registrant last acquired real property for use as capital property in commercial activities of the individual and not primarily for the personal use and enjoyment of the individual or a related individual, and the individual increases, at a particular time, the extent to which the property is used in commercial activities of the individual without beginning to use the property primarily for the personal use and enjoyment of the individual or a related individual, for the purposes of determining an input tax credit of the individual, the individual shall be deemed

    • (a) to have received, at the particular time, a supply by way of sale of a portion of the property for use as capital property exclusively in commercial activities of the individual; and

    • (b) except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the amount determined by the formula

      A × B

      where

      A
      is the basic tax content of the property at the particular time, and
      B
      is the extent (expressed as a percentage of the total use of the property by the individual at the particular time) to which the individual increased the use of the property in commercial activities of the individual at the particular time.
  • Marginal note:Improvement to capital real property by individual

    (4) Where an individual who is a registrant acquires, imports or brings into a participating province an improvement to real property that is capital property of the individual, the tax payable by the individual in respect of the improvement shall not be included in determining an input tax credit of the individual if, at the time that tax becomes payable or is paid without having become payable, the property is primarily for the personal use and enjoyment of the individual or a related individual.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 74
  • 1997, c. 10, ss. 40.1, 196

Marginal note:Real property of certain public service bodies

  •  (1) If a registrant (other than a financial institution or a government) is a public service body, section 141.2 and subsections 199(2) to (4) and 200(2) and (3) apply, with any modifications that the circumstances require, to real property acquired by the registrant for use as capital property of the registrant or, in the case of subsection 199(4), to improvements to real property that is capital property of the registrant, as if the real property were personal property.

  • Marginal note:Real property of certain Crown agents

    (2) If a registrant (other than a financial institution) is a specified Crown agent, section 141.2 and subsections 199(2) to (4) and 200(2) and (4) apply, with any modifications that the circumstances require, to real property acquired by the registrant for use as capital property of the registrant or, in the case of subsection 199(4), to improvements to real property that is capital property of the registrant, as if the real property were personal property.

  • Marginal note:Exception

    (3) Despite subsections (1) and (2), section 141.2 and subsections 200(3) and (4) do not apply to

    • (a) a supply of a residential complex or an interest in one made by way of sale; or

    • (b) a supply of real property made by way of sale to an individual.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 75
  • 2000, c. 30, s. 43
  • 2004, c. 22, s. 37
  • 2017, c. 33, s. 162(F)

 [Repealed, 1993, c. 27, s. 75]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 75

Marginal note:Election for real property of a public service body

  •  (1) Where a public service body files an election made under this subsection in respect of

    • (a) real property that is capital property of the body,

    • (b) real property of the body that is held by the body in inventory for the purpose of supply, or

    • (c) real property acquired by the body by way of lease, licence or similar arrangement for the purpose of making a supply of the property by way of lease, licence or similar arrangement or making a supply of the arrangement by way of assignment,

    throughout the period the election is in effect, subsection 193(1) and section 206 apply, and section 209 does not apply, to the property.

  • Marginal note:Deemed sale where election

    (2) For the purposes of this Part, where a public service body has filed an election made under subsection (1) in respect of real property described in paragraph (1)(a) or (b) that takes effect on a particular day and the body does not acquire the property on the particular day or become a registrant on the particular day, the body shall be deemed

    • (a) to have made, immediately before the particular day, a taxable supply of the property by way of sale and to have collected, on the particular day, tax in respect of the supply equal to the basic tax content of the property on the particular day; and

    • (b) to have received, on the particular day, a taxable supply of the property by way of sale and to have paid, on the particular day, tax in respect of the supply equal to the amount determined under paragraph (a).

  • Marginal note:Effect of election

    (3) An election under subsection (1) in respect of real property of a person is effective for the period beginning on the day specified in the election and ending on the day that the person specifies in a notice of revocation of the election filed under this section.

  • Marginal note:Deemed sale where revocation

    (4) For the purposes of this Part, where an election made under subsection (1) by a public service body in respect of real property described in paragraph (1)(a) or (b) is revoked and ceases to be effective on a day and the body does not cease to be a registrant on that day, the body shall be deemed

    • (a) to have made, immediately before that day, a taxable supply of the property by way of sale and to have collected, on that day, tax in respect of the supply equal to the basic tax content of the property on that day; and

    • (b) to have received, on that day, a taxable supply of the property by way of sale and to have paid, on that day, tax in respect of the supply equal to the basic tax content of the property on that day.

  • Marginal note:Manner and form of election or revocation

    (5) An election made under subsection (1) by a person and a notice of revocation of such an election shall

    • (a) be made in prescribed form containing prescribed information;

    • (b) specify the real property in respect of which the election or notice applies and the day the election becomes effective or, in the case of a notice of revocation, ceases to be effective; and

    • (c) be filed with the Minister in prescribed manner within one month after the end of the reporting period of the person in which the election becomes effective or, in the case of a notice of revocation, ceases to be effective.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 76
  • 1997, c. 10, s. 197
  • 2006, c. 4, s. 18
 

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