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

Marginal note:Credit on sale of personal property of a municipality

200.1 If a registrant is a municipality or a person designated to be a municipality for the purposes of section 259, subsection 193(2) applies, with any modifications that the circumstances require, to personal property (other than a passenger vehicle, an aircraft of a registrant who is an individual or a partnership and property of a person designated to be a municipality for the purposes of section 259 that is not designated municipal property of the person) acquired or imported by the registrant for use as capital property of the registrant as if the personal property were real property.

Marginal note:Value of passenger vehicle

201 For the purpose of determining an input tax credit of a registrant in respect of a passenger vehicle that the registrant at a particular time acquires, imports or brings into a participating province for use as capital property in commercial activities of the registrant, the tax payable by the registrant in respect of the acquisition, importation or bringing in, as the case may be, of the vehicle is deemed to be the lesser of

• (a) the tax that was payable by the registrant in respect of the acquisition, importation or bringing in, as the case may be, of the vehicle; and

• (b) the amount determined by the formula

  (A × B) - C

  where

  A

  is the tax that would be payable by the registrant in respect of the vehicle if the registrant acquired the vehicle at the particular time

  • (i) where the registrant is bringing the vehicle into a participating province at the particular time, in that province, and

  • (ii) in any other case, in Canada

  for consideration equal to the amount that would, under whichever of paragraphs 13(7)(g) to (i) of the Income Tax Act is applicable in respect of the vehicle, be deemed to be, for the purposes of section 13 of that Act, the capital cost to a taxpayer of a passenger vehicle in respect of which that paragraph applies if the formulae in paragraph 7307(1)(b) and subsection 7307(1.1) of the Income Tax Regulations were read without reference to the description of B,

  B

  is

  • (i) if the registrant is deemed under subsection 199(3) or 206(2) or (3) to have acquired the vehicle or a portion of it at the particular time, or the registrant is bringing the vehicle into a participating province at the particular time, and the registrant was previously entitled to claim a rebate under section 259 in respect of the vehicle or any improvement to it, the difference between 100% and the specified percentage (within the meaning of that section) that applied in determining the amount of that rebate, and

  • (ii) in any other case, 100%; and

  C

  is

  • (i) where the registrant is bringing the vehicle into a participating province at the particular time, the total of all input tax credits that the registrant was entitled to claim in respect of the last acquisition or importation of the vehicle by the registrant or in respect of any improvement to it acquired or imported by the registrant after the vehicle was last so acquired or imported, and

  • (ii) in any other case, zero.

Marginal note:Improvement to passenger vehicle

• 202 (1) If the consideration paid or payable by a registrant for an improvement to a passenger vehicle of the registrant increases the cost to the registrant of the vehicle to an amount that exceeds the amount that would, under whichever of paragraphs 13(7)(g) to (i) of the Income Tax Act is applicable in respect of the vehicle, be deemed to be, for the purposes of section 13 of that Act, the capital cost to a taxpayer of a passenger vehicle in respect of which that paragraph applies if the formulae in paragraph 7307(1)(b) and subsection 7307(1.1) of the Income Tax Regulations were read without reference to the description of B, the tax calculated on that excess shall not be included in determining an input tax credit of the registrant for any reporting period of the registrant.

• Marginal note:Input tax credit on passenger vehicle or aircraft

  (2) Where a registrant who is an individual or a partnership acquires or imports a passenger vehicle or aircraft or brings it into a participating province for use as capital property of the registrant, the tax payable (other than tax deemed to be payable under subsection (4)) by the registrant in respect of that acquisition, importation or bringing in, as the case may be, shall not be included in determining an input tax credit of the registrant unless the vehicle or aircraft was acquired or imported, or brought in, as the case may be, by the registrant for use exclusively in commercial activities of the registrant.

• Marginal note:Improvement to passenger vehicle or aircraft

  (3) Where a registrant who is an individual or a partnership acquires, imports or brings into a participating province an improvement to a passenger vehicle or aircraft that is capital property of the registrant, the tax payable by the registrant in respect of the improvement shall not be included in determining an input tax credit of the registrant unless, throughout the period

  • (a) beginning on the later of the day the vehicle or aircraft, as the case may be, was originally acquired or imported by the registrant and the day the individual or partnership becomes a registrant, and

  • (b) ending on the day tax in respect of the improvement becomes payable or is paid without having become payable,

  the vehicle or aircraft was used exclusively in commercial activities of the registrant.

• Marginal note:Non-exclusive use of passenger vehicle or aircraft

  (4) Notwithstanding subsections (2) and (3), where a registrant who is an individual or a partnership at any time acquires or imports a passenger vehicle or aircraft, or brings it into a participating province, for use as capital property of the registrant but not for use exclusively in commercial activities of the registrant and tax is payable by the registrant in respect of the acquisition, importation or bringing in, as the case may require, for the purpose of determining an input tax credit of the registrant, the registrant is deemed

  • (a) to have acquired the vehicle or aircraft on the last day of each taxation year of the registrant ending after that time; and

  • (b) to have paid, on that day, tax in respect of the acquisition of the vehicle or aircraft equal to the amount determined by the formula

    A × B

    where

    A

    is

    • (i) in the case of an acquisition or importation in respect of which tax is payable only under subsection 165(1) or section 212 or 218, as the case may require, and in the case of an acquisition deemed to have been made under subsection (5) of a vehicle or aircraft in respect of which no tax under subsection 165(2) was payable by the registrant, the amount determined by the formula

      C/D

      where

      C

      is the rate set out in subsection 165(1), and

      D

      is the total of 100% and the percentage determined for C,

    • (ii) in the case of the bringing into a participating province of the vehicle or aircraft from a non-participating prov­ince and in the case of an acquisition in respect of which tax under section 220.06 is payable, the amount determined by the formula

      E/F

      where

      E

      is the tax rate for the participating province, and

      F

      is the total of 100% and the percentage determined for E,

    • (iii) in the case of an acquisition or importation in respect of which tax is payable under subsection 165(2), section 212.1 or subsection 218.1(1) calculated at the tax rate for a participating province, the amount determined by the formula

      G/H

      where

      G

      is the total of the rate set out in subsection 165(1) and the tax rate for the participating province, and

      H

      is the total of 100% and the percentage determined for G, and

    • (iv) in any other case, the amount determined by the formula

      I/J

      where

      I

      is the rate determined in prescribed manner, and

      J

      is the total of 100% and the percentage determined for I, and

    B

    is

    • (i) where an amount in respect of the vehicle or aircraft is required by paragraph 6(1)(e) or subsection 15(1) of the Income Tax Act to be included in computing the income of an individual for a taxation year of the individual ending in that taxation year of the registrant, nil, and

    • (ii) in any other case, the capital cost allowance in respect of the vehicle or aircraft that was deducted under the Income Tax Act in computing the income of the registrant from those commercial activities for that taxation year of the registrant.

• Marginal note:Deemed acquisition

  (5) For the purpose of subsection (4), where at any time a registrant is deemed under section 203 to have made a taxable supply of a passenger vehicle or aircraft,

  • (a) the registrant shall be deemed to have acquired the vehicle or aircraft at that time; and

  • (b) tax shall be deemed to be payable at that time by the registrant in respect of the vehicle or aircraft.

Marginal note:Sale of passenger vehicle

• 203 (1) If a registrant (other than a municipality), at a particular time in a reporting period of the registrant, makes a taxable supply by way of sale of a passenger vehicle (other than a vehicle that is designated municipal property of a person designated at the particular time to be a municipality for the purposes of section 259) that, immediately before the particular time, was used as capital property in commercial activities of the registrant, the registrant may, despite section 170, paragraph 199(2)(a) and subsections 199(4) and 202(1), claim an input tax credit for that period equal to the amount determined by the formula

  A × (B - C)/B

  where

  A

  is the basic tax content of the vehicle at the particular time;

  B

  is the total of

  • (a) the tax that was payable by the registrant in respect of the last acquisition or importation of the vehicle by the registrant,

  • (b) where the registrant brought the vehicle into a participating province after it was last acquired or imported by the registrant, the tax that was payable by the registrant in respect of bringing it into that province, and

  • (c) the tax that was payable by the registrant in respect of improvements to the vehicle acquired, imported or brought into a participating province by the registrant after the property was last acquired or imported; and

  C

  is the total of all input tax credits that the registrant was entitled to claim in respect of any tax included in the total for B.

• Marginal note:Ceasing to use passenger vehicle, etc.

  (2) For the purposes of this Part, where a registrant who is an individual or a partnership acquired or imported a passenger vehicle or an aircraft for use as capital property exclusively in commercial activities of the registrant and the registrant begins, at any time, to use the vehicle or aircraft otherwise than exclusively in commercial activities of the registrant, the registrant shall be deemed to have

  • (a) made, immediately before that time, a taxable supply by way of sale of the vehicle or aircraft; and

  • (b) collected, at that time, tax in respect of the supply equal to the basic tax content of the vehicle or aircraft immediately before that time.

• Marginal note:Sale of passenger vehicle, etc.

  (3) Despite paragraph 141.1(1)(a), for the purposes of this Part, a supply shall be deemed not to be a taxable supply if

  • (a) an individual or a partnership (other than a municipality) who is a registrant makes, at a particular time, the supply by way of sale of a passenger vehicle or an aircraft (other than a vehicle or an aircraft that is designated municipal property of a person designated at the particular time to be a municipality for the purposes of section 259) that is capital property of the registrant; and

  • (b) at any time after the individual or partnership became a registrant and before the particular time, the registrant did not use the vehicle or aircraft exclusively in commercial activities of the registrant.

• Marginal note:Sale of passenger vehicle by a municipality

  (4) If a registrant (other than an individual or a partnership) that is a municipality or a person designated to be a municipality for the purposes of section 259, at a particular time in a reporting period of the registrant, makes a taxable supply by way of sale of a passenger vehicle (other than a vehicle of a person designated to be a municipality for the purposes of section 259 that is not designated municipal property of the person) that, immediately before the particular time, was capital property of the registrant, the registrant may, despite section 170, paragraph 199(2)(a) and subsections 199(4) and 202(1), claim an input tax credit for that period equal to the lesser of

  • (a) the amount determined by the formula

    A × (B – C)/B

    where

    A

    is the basic tax content of the vehicle at the particular time,

    B

    is the total of

    • (i) the tax that was payable by the registrant in respect of the last acquisition or importation of the vehicle by the registrant,

    • (ii) if the registrant brought the vehicle into a participating province after it was last acquired or imported by the registrant, the tax that was payable by the registrant in respect of bringing it into that province, and

    • (iii) the tax that was payable by the registrant in respect of improvements to the vehicle acquired, imported or brought into a participating province by the registrant after the property was last acquired or imported, and

    C

    is the total of all input tax credits that the registrant was entitled to claim in respect of any tax included in the total for B, and

  • (b) the tax that is or would, in the absence of section 167, be payable in respect of the taxable supply.

Marginal note:Application

• 204 (1) This section does not apply to personal property of a financial institution having a cost to the institution of $50,000 or less.

• Marginal note:Personal property of a financial institution

  (2) Where a financial institution is a registrant, subsections 206(2) to (5) apply, with such modifications as the circumstances require, to personal property acquired or imported by the institution for use as capital property of the institution, and to improvements to personal property that is capital property of the institution, as if the personal property were real property.

• Marginal note:Credit on sale

  (3) Where a financial institution is a registrant, subsection 193(1) applies, with such modifications as the circumstances require, to personal property (other than a passenger vehicle) acquired or imported by the institution for use as capital property of the institution, as if the personal property were real property.