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

Meaning of provincial levy

• 154 (1) In this section, provincial levy means a tax, duty or fee imposed under an Act of the legislature of a province in respect of the supply, consumption or use of property or a service.

• Marginal note:Levies included in consideration

  (2) For the purposes of this Part, the consideration for a supply of property or a service includes

  • (a) any tax, duty or fee imposed under an Act of Parliament that is payable by the recipient, or payable or collectible by the supplier, in respect of that supply or in respect of the production, importation, consumption or use of the property or service, other than tax under this Part that is payable by the recipient;

  • (b) any provincial levy that is payable by the recipient, or payable or collectible by the supplier, in respect of that supply or in respect of the consumption or use of the property or service, other than a prescribed provincial levy that is payable by the recipient; and

  • (c) any other amount that is collectible by the supplier under an Act of the legislature of a province and that is equal to, or is collectible on account of or in lieu of, a provincial levy, except where the amount is payable by the recipient and the provincial levy is a prescribed provincial levy.

• Marginal note:Reference to “recipient”

  (3) If, under this Part, a person is deemed to be the recipient of a supply in respect of which another person would, but for that deeming, be the recipient, a reference in this section to the recipient of the supply shall be read as a reference to that other person.

Marginal note:Non-arm’s length supplies

• 155 (1) For the purposes of this Part, where a supply of property or a service is made between persons not dealing with each other at arm’s length for no consideration or for consideration less than the fair market value of the property or service at the time the supply is made, and the recipient of the supply is not a registrant who is acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the recipient,

  • (a) if no consideration is paid for the supply, the supply shall be deemed to be made for consideration, paid at that time, of a value equal to the fair market value of the property or service at that time; and

  • (b) if consideration is paid for the supply, the value of the consideration shall be deemed to be equal to the fair market value of the property or service at that time.

• Marginal note:Exception

  (2) Subsection (1) does not apply to a supply of property or a service by a person where

  • (a) an amount is deemed under section 173 to be the total consideration for the supply; or

  • (b) in the absence of subsection (1),

    • (i) the person, because of subsection 170(1), would not be entitled to claim an input tax credit in respect of the acquisition or importation of the property or service by the person,

    • (ii) subsection 172(2) would apply to the supply, or

    • (iii) the supply would be an exempt supply included in Part V.1 or VI of Schedule V.

Marginal note:Definitions

• 156 (1) The definitions in this subsection apply in this section.

  Canadian partnership

  Canadian partnership[Repealed, 2024, c. 15, s. 133]

  distribution

  distribution has the meaning assigned by subsection 55(1) of the Income Tax Act. (attribution)

  qualifying group

  qualifying group means

  • (a) a group of corporations, each member of which is closely related, within the meaning assigned by section 128, to each other member of the group; or

  • (b) a group of specified partnerships, or of specified partnerships and corporations, each member of which is closely related, within the meaning of this section, to each other member of the group. (groupe admissible)

  qualifying member

  qualifying member of a qualifying group means a registrant that is a corporation resident in Canada or a specified partnership, each member of which is resident in Canada, and that meets the following conditions:

  • (a) the registrant is a member of the group;

  • (b) the registrant is not a party to an election under subsection 150(1); and

  • (c) one of the following conditions is met:

    • (i) the registrant has property (other than financial instruments and property having a nominal value) and has last manufactured, produced, acquired or imported all or substantially all of its property (other than financial instruments and property having a nominal value) for consumption, use or supply exclusively in the course of commercial activities of the registrant,

    • (ii) the registrant has no property (other than financial instruments and property having a nominal value) and has made supplies and all or substantially all of the supplies made by the registrant are taxable supplies, or

    • (iii) the registrant has no property (other than financial instruments and property having a nominal value) and has not made taxable supplies and it is reasonable to expect that

      • (A) the registrant will be making supplies throughout the next 12 months,

      • (B) all or substantially all of those supplies will be taxable supplies, and

      • (C) all or substantially all of the property (other than financial instruments and property having a nominal value) to be manufactured, produced, acquired or imported by the registrant within the next 12 months will be for consumption, use or supply exclusively in the course of commercial activities of the registrant. (membre admissible)

  secured creditor

  secured creditor[Repealed, 2000, c. 30, s. 25]

  security interest

  security interest[Repealed, 2000, c. 30, s. 25]

  specified member

  specified member of a qualifying group means

  • (a) a qualifying member of the group; or

  • (b) a temporary member of the group during the course of the reorganization referred to in paragraph (f) of the definition temporary member. (membre déterminé)

  specified partnership

  specified partnership means a partnership each member of which is a corporation or a partnership. (société de personnes déterminée)

  temporary member

  temporary member of a qualifying group means a particular corporation

  • (a) that is a registrant;

  • (b) that is resident in Canada;

  • (c) that is a member of the qualifying group;

  • (d) that is not a qualifying member of the qualifying group;

  • (e) that is not a party to an election under subsection 150(1);

  • (f) that receives a supply of property that meets the following conditions:

    • (i) the supply is made by another corporation that is a qualifying member of the qualifying group and in contemplation of a distribution made in the course of a reorganization whereby the shares of the particular corporation are to be transferred upon the distribution to one or more corporations (in this definition referred to as the “transferee corporations”),

    • (ii) the supplied property includes property that is neither a financial instrument nor property having a nominal value, and

    • (iii) all or substantially all of the supplied property (other than financial instruments and property having a nominal value)

      • (A) was last manufactured, produced, acquired or imported by the other corporation for consumption, use or supply exclusively in the course of the commercial activities of the other corporation,

      • (B) is not consumed, used or supplied by the particular corporation otherwise than exclusively in the course of its commercial activities, and

      • (C) may reasonably be expected to be consumed, used or supplied by the transferee corporations exclusively in the course of their commercial activities within 12 months after the time the supply is made;

  • (g) that, before receiving the supply, does not carry on any business or have any property (other than financial instruments); and

  • (h) the shares of which are transferred to the transferee corporations upon the distribution referred to in subparagraph (f)(i). (membre temporaire)

• Marginal note:Closely related persons

  (1.1) For the purposes of this section, a particular specified partnership and another person that is a specified partnership or a corporation are closely related to each other at any time if, at that time,

  • (a) in the case where the other person is a specified partnership,

    • (i) all or substantially all of the interest in the other person is held by

      • (A) the particular partnership,

      • (B) a corporation, or a specified partnership, that is a member of a qualifying group of which the particular partnership is a member, or

      • (C) any combination of corporations or partnerships referred to in clauses (A) and (B), or

    • (ii) the particular partnership

      • (A) both holds qualifying voting control in respect of a corporation that is a member of a qualifying group of which the other person is a member and owns at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the corporation, or

      • (B) holds all or substantially all of the interest in a specified partnership that is a member of a qualifying group of which the other person is a member; and

  • (b) in the case where the other person is a corporation,

    • (i) qualifying voting control in respect of the other person is held by, and not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the other person are owned by,

      • (A) the particular partnership,

      • (B) a corporation, or a specified partnership, that is a member of a qualifying group of which the particular partnership is a member, or

      • (C) any combination of corporations or partnerships referred to in clauses (A) and (B),

    • (ii) qualifying voting control in respect of a corporation is held by, and not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the corporation are owned by,

      • (A) if the corporation is a member of a qualifying group of which the particular partnership is a member, the other person, and

      • (B) if the corporation is a member of a qualifying group of which the other person is a member, the particular partnership,

    • (iii) all or substantially all of the interest in the particular partnership is held by

      • (A) the other person,

      • (B) a corporation, or a specified partnership, that is a member of a qualifying group of which the other person is a member, or

      • (C) any combination of corporations or partnerships referred to in clauses (A) and (B), or

    • (iv) all or substantially all of the interest in a specified partnership is held by

      • (A) if the specified partnership is a member of a qualifying group of which the particular partnership is a member, the other person, and

      • (B) if the specified partnership is a member of a qualifying group of which the other person is a member, the particular partnership.

• Marginal note:Persons closely related to the same person

  (1.2) If, under subsection (1.1), two persons are closely related to the same corporation or specified partnership, the two persons are closely related to each other for the purposes of this section.

• Marginal note:Interest in a partnership

  (1.3) For the purposes of this section, a person, or a group of persons, holds, at any time, all or substantially all of the interest in a partnership only if, at that time,

  • (a) the person, or every person in the group of persons, is a member of the partnership; and

  • (b) the person, or the members of the group collectively, as the case may be, is or are

    • (i) entitled to receive at least 90% of

      • (A) if the partnership had income for the last fiscal period (within the meaning of the Income Tax Act) of the partnership that ended before that time (or, if the partnership’s first fiscal period includes that time, for that period), the total of all amounts each of which is the share of that income from all sources that each member of the partnership is entitled to receive, or

      • (B) if the partnership had no income for the last fiscal period or the first fiscal period referred to in clause (A), as the case may be, the total of all amounts each of which is the share of the income of the partnership that each member of the partnership would be entitled to receive if the income of the partnership from each source were one dollar,

    • (ii) entitled to receive at least 90% of the total amount that would be paid to all members of the partnership (otherwise than as a share of any income of the partnership) if it were wound up at that time, and

    • (iii) able to direct the business and affairs of the partnership or would be so able if no secured creditor had any security interest in an interest in, or the property of, the partnership.

• Marginal note:Election for nil consideration

  (2) For the purposes of this Part, if at any time after 2014 a person that is a specified member of a qualifying group files an election made jointly by the person and another specified member of the group, every taxable supply made between the person and the other specified member at a time when the election is in effect is deemed to have been made for no consideration.

• Marginal note:Elections filed before 2015

  (2.01) For the purposes of this section, if an election made under this section has been filed by any person before January 1, 2015, the election is deemed never to have been filed.

• Marginal note:Non-application

  (2.1) Subsection (2) does not apply to

  • (a) a supply by way of sale of real property;

  • (b) a supply of property, or of a service, that is not acquired by the recipient for consumption, use or supply exclusively in the course of commercial activities of the recipient; or

  • (c) a supply that is not a supply of property that meets the conditions set out in paragraph (f) of the definition temporary member in subsection (1), if the recipient of the supply is a temporary member.

• Marginal note:Cessation

  (3) An election under subsection (2) made jointly by a particular member of a qualifying group and another member of the group ceases to have effect on the earliest of

  • (a) the day on which the particular member ceases to be a specified member of the group,

  • (b) the day on which the other member ceases to be a specified member of the group, and

  • (c) the day on which the election is revoked jointly by those members.

• Marginal note:Form of election and revocation

  (4) An election under subsection (2) made jointly by a particular specified member of a qualifying group and another specified member of the group and a revocation of the election by those specified members shall

  • (a) be made in prescribed form containing prescribed information and specify the day (in this subsection referred to as the “effective day”) on which the election or revocation is to become effective; and

  • (b) be filed with the Minister in prescribed manner on or before

    • (i) the particular day that is the earlier of

      • (A) the day on or before which the particular specified member must file a return under Division V for the reporting period of the particular specified member that includes the effective day, and

      • (B) the day on or before which the other specified member must file a return under Division V for the reporting period of the other specified member that includes the effective day, or

    • (ii) any day after the particular day that the Minister may allow.

• Marginal note:Joint and several liability

  (5) A particular person and another person are jointly and severally, or solidarily, liable for all obligations under this Part that result upon, or as a consequence of, a failure to account for or pay as and when required under this Part an amount of net tax of the particular person or of the other person if that tax is attributable to a supply made at any time between the particular person and the other person and if

  • (a) an election under subsection (2) made jointly by the particular person and the other person

    • (i) is in effect at that time, or

    • (ii) ceased to be in effect before that time but the particular person and the other person are conducting themselves as if the election were in effect at that time; or

  • (b) the particular person and the other person purport to have jointly made an election under subsection (2) before that time and are conducting themselves as if an election under subsection (2) made jointly by the particular person and the other person were in effect at that time.