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

Marginal note:Right of supplier to sue for tax remitted

224 Where a supplier has made a taxable supply to a recipient, is required under this Part to collect tax from the recipient in respect of the supply, has complied with subsection 223(1) in respect of the supply and has accounted for or remitted the tax payable by the recipient in respect of the supply to the Receiver General but has not collected the tax from the recipient, the supplier may bring an action in a court of competent jurisdiction to recover the tax from the recipient as though it were a debt due by the recipient to the supplier.

Marginal note:No action for collection of tax

224.1 No person, other than Her Majesty in right of Canada, may bring an action or proceeding against any person for acting in compliance or intended compliance with this Part by collecting an amount as or on account of tax.

SUBDIVISION BRemittance of Tax

Marginal note:Net tax

• 225 (1) Subject to this Subdivision, the net tax for a particular reporting period of a person is the positive or negative amount determined by the formula

  A - B

  where

  A

  is the total of

  • (a) all amounts that became collectible and all other amounts collected by the person in the particular reporting period as or on account of tax under Division II, and

  • (b) all amounts that are required under this Part to be added in determining the net tax of the person for the particular reporting period; and

  B

  is the total of

  • (a) all amounts each of which is an input tax credit for the particular reporting period or a preceding reporting period of the person claimed by the person in the return under this Division filed by the person for the particular reporting period, and

  • (b) all amounts each of which is an amount that may be deducted by the person under this Part in determining the net tax of the person for the particular reporting period and that is claimed by the person in the return under this Division filed by the person for the particular reporting period.

• Marginal note:Restriction

  (2) An amount shall not be included in the total for A in the formula set out in subsection (1) for a reporting period of a person to the extent that that amount was included in that total for a preceding reporting period of the person.

• Marginal note:Restriction

  (3) An amount shall not be included in the total for B in the formula set out in subsection (1) for a particular reporting period of a person to the extent that the amount was claimed or included as an input tax credit or deduction in determining the net tax for a preceding reporting period of the person unless

  • (a) the person was not entitled to claim the amount in determining the net tax for the preceding period only because the person did not satisfy the requirements of subsection 169(4) in respect of the amount before the return for that preceding period was filed; and

  • (b) where the person is claiming the amount in a return for the particular reporting period and the Minister has not disallowed the amount as an input tax credit in assessing the net tax of the person for that preceding reporting period,

    • (i) the person reports in writing to the Minister, at or before the time the return for the particular reporting period is filed, that the person made an error in claiming that amount in determining the net tax of the person for that preceding period, and

    • (ii) if the person does not report the error to the Minister at least three months before the time limited by subsection 298(1) for assessing the net tax of the person for that preceding period expires, the person pays, at or before the time the return for the particular reporting period is filed, the amount and any applicable interest to the Receiver General.

• Marginal note:Restriction

  (3.1) An amount shall not be included in the total for B in the formula set out in subsection (1) for a reporting period of a person to the extent that, before the end of the period, the amount

  • (a) is included in an adjustment, refund or credit for which a credit note referred to in subsection 232(3) has been received by the person or a debit note referred to in that subsection has been issued by the person; or

  • (b) was otherwise rebated, refunded or remitted to the person, or was otherwise recovered by the person, under this or any other Act of Parliament.

• Marginal note:Limitation

  (4) An input tax credit of a person for a particular reporting period of the person shall not be claimed by the person unless it is claimed in a return under this Division filed by the person on or before the day that is

  • (a) where the person is a specified person during the particular reporting period,

    • (i) if the input tax credit is in respect of property or a service supplied to the person by a supplier who did not, before the end of the particular reporting period, charge the tax in respect of the supply that became payable during the particular reporting period and the person pays that tax after the end of the particular reporting period and before the input tax credit is claimed, the earlier of

      • (A) the day on or before which the return under this Division is required to be filed for the last reporting period of the person that ends within two years after the end of the person’s fiscal year in which the supplier charges that tax to the person, and

      • (B) the day on or before which the return under this Division is required to be filed for the last reporting period of the person that ends within four years after the end of the particular reporting period,

    • (ii) if the input tax credit was claimed in a return under this Division filed, on or before the day on or before which the return under this Division is required to be filed for the last reporting period of the person that ends within two years after the end of the person’s fiscal year that includes the particular reporting period, by another person who was not entitled to claim it and the person has paid the tax payable in respect of the acquisition or importation of the property or service, the day on or before which the return under this Division is required to be filed for the last reporting period of the person that ends within four years after the end of the particular reporting period, and

    • (iii) in any other case, the day on or before which the return under this Division is required to be filed for the last reporting period of the person that ends within two years after the end of the person’s fiscal year that includes the particular reporting period;

  • (b) where the person is not a specified person during the particular reporting period, the day on or before which the return under this Division is required to be filed for the last reporting period of the person that ends within four years after the end of the particular reporting period; or

  • (c) where

    • (i) the input tax credit is in respect of property or a service supplied to the person by a supplier who did not, before the end of the last reporting period of the person that ends within four years after the end of the particular reporting period, charge the tax in respect of the supply that became payable during the particular reporting period and the supplier discloses in writing to the person that the Minister has assessed the supplier for that tax, and

    • (ii) the person pays that tax after the end of that last reporting period and before the input tax credit is claimed by the person,

    the day on or before which the return under this Division is required to be filed for the reporting period of the person in which the person pays that tax.

• Meaning of specified person

  (4.1) For the purposes of subsection (4), a person is a specified person during a reporting period of the person if

  • (a) the person is a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) during the reporting period, or

  • (b) the person’s threshold amounts, determined in accordance with subsection 249(1), exceed $6 million for both the particular fiscal year of the person that includes the reporting period and the person’s previous fiscal year,

  unless, in the case of a person who is not a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) during the reporting period, the person is a charity during the reporting period or all or substantially all of the supplies made by the person during either of the person’s two fiscal years immediately preceding the particular fiscal year (other than supplies of financial services) are taxable supplies.

• Marginal note:Idem

  (5) Where a registrant makes an exempt supply by way of sale of a residential complex, the registrant shall not claim an input tax credit in respect of

  • (a) the last acquisition by the registrant of the complex, or

  • (b) an improvement to the complex acquired, imported or brought into a participating province by the registrant after the complex was last acquired by the registrant,

  in a return filed on or after the day the registrant transfers ownership or possession of the complex to the recipient of the supply.

• Marginal note:Idem

  (6) Where a trustee is appointed under the Bankruptcy and Insolvency Act to act in the administration of the estate of a registrant who is a bankrupt,

  • (a) the total of all input tax credits claimed, and all amounts deducted, in a return filed after the appointment for a reporting period of the registrant ending before the appointment shall not exceed the total of

    • (i) the amount that would be the net tax for the period if no input tax credits were claimed, and no amounts were deducted, in determining the net tax for that period, and

    • (ii) all amounts required under this Part to be remitted by the registrant in respect of reporting periods ending before that period and all amounts payable under this Part by the registrant as penalty, interest, an instalment of tax or a repayment in respect of those reporting periods, and

  • (b) an input tax credit, or an amount that may be deducted in determining net tax, for a reporting period of the registrant ending before the appointment shall not be claimed or deducted in a return for a reporting period of the registrant ending after the appointment,

  unless, on or before the day that return is filed, all returns required under this Part to be filed for, or in respect of acquisitions of real property made in, reporting periods of the registrant ending before the appointment have been filed and all amounts required under this Part to be remitted by the registrant in respect of those reporting periods and all amounts payable under this Part by the registrant as penalty, interest, an instalment of tax or a repayment in respect of those reporting periods have been remitted or paid, as the case may be.

Marginal note:Meaning of specified supply

• 225.1 (1) In this section, specified supply means a taxable supply other than

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

  • (b) a supply deemed under section 175.1 or 181.1 or subsection 183(5) or (6) to have been made;

  • (c) a supply to which subsection 172(2) or 173(1) applies; and

  • (d) a supply deemed under subsection 177(1) or (1.2) to have been made by an agent.

• Marginal note:Net tax

  (2) Subject to subsection (7), the net tax for a particular reporting period of a charity that is a registrant is equal to the positive or negative amount determined by the formula

  A - B

  where

  A

  is the total of

  • (a) 60% of the total of all amounts, each of which is an amount collectible by the charity that, in the particular reporting period, became collectible or was collected before having become collectible, by the charity as or on account of tax in respect of specified supplies made by the charity,

  • (b) the total of all amounts that became collectible and all other amounts collected by the charity in the particular reporting period as or on account of tax in respect of

    • (i) supplies by way of sale of capital property or real property made by the charity,

    • (ii) supplies by the charity to which subsection 172(2) or 173(1) applies, and

    • (iii) supplies made on behalf of another person for whom the charity acts as agent and

      • (A) that are deemed under subsection 177(1) or (1.2) to have been made by the charity and not by the other person, or

      • (B) in respect of which the charity has made an election under subsection 177(1.1),

  • (b.1) the total of all amounts each of which is an amount not included in paragraph (b) that was collected from a person by the charity in the particular reporting period as or on account of tax in circumstances in which the amount was not payable by the person, whether the amount was paid by the person by mistake or otherwise,

  • (c) the total of all amounts each of which is an amount in respect of supplies of real property or capital property made by way of sale by or to the charity that is required under subsection 231(3) or 232(3) to be added in determining the net tax for the particular reporting period, and

  • (d) the amount required under subsection 238.1(4) to be added in determining the net tax for the particular reporting period; and

  B

  is the total of

  • (a) all input tax credits of the charity for the particular reporting period and preceding reporting periods in respect of

    • (i) real property acquired by the charity by way of purchase,

    • (ii) personal property acquired, imported or brought into a participating province by the charity for use as capital property of the charity,

    • (iii) improvements to real property or capital property of the charity,

    • (iv) tangible personal property (other than property referred to in subparagraph (ii) or (iii)) that is acquired, imported or brought into a participating province by the charity for the purpose of supply by way of sale and is

      • (A) supplied by a person acting as agent for the charity in circumstances in which subsection 177(1.1) applies, or

      • (B) deemed by subsection 177(1.2) to have been supplied by an auctioneer acting as agent for the charity, and

    • (v) tangible personal property (other than property referred to in subparagraph (ii) or (iii)) deemed under paragraph 180(e) to have been acquired by the charity and under subsection 177(1) or (1.2) to have been supplied by the charity

  that are claimed in the return under this Division filed for the particular reporting period,

  • (b) 60% of the total of all amounts in respect of specified supplies that may be deducted under subsection 232(3) in respect of adjustments, refunds or credits given by the charity under subsection 232(2), or that may be deducted under subsection 234(2) or (3), in determining the net tax for the particular reporting period and that are claimed in the return under this Division filed for that reporting period,

  • (b.1) 60% of the total of all amounts that may be deducted by the charity under paragraph 232.01(5)(a) or 232.02(4)(a) in determining the net tax for the particular reporting period and that are claimed in the return under this Division filed for that reporting period,

  • (b.2) the total of all amounts that may, in determining the net tax for the particular reporting period, be deducted under subsection 232(3) in respect of adjustments, refunds or credits given by the charity under subsection 232(1) in respect of specified supplies and that are claimed in the return under this Division filed for that reporting period,

  • (c) the total of all amounts in respect of supplies of real property or capital property made by way of sale by the charity that may be deducted by the charity under subsection 231(1) or 232(3) or section 234 in determining the net tax for the particular reporting period and are claimed in the return under this Division filed for that reporting period, and

  • (d) the total of all amounts each of which is an input tax credit (other than an input tax credit referred to in paragraph (a)) of the charity, for a preceding reporting period in respect of which this subsection did not apply for the purpose of determining the net tax of the charity, that the charity was entitled to include in determining its net tax for that preceding reporting period and that is claimed in the return under this Division filed for the particular reporting period.

• Marginal note:Restriction

  (3) An amount shall not be included in determining a total under the description of A in subsection (2) for a reporting period of a charity to the extent that that amount was included in that total for a preceding reporting period of the charity.

• Marginal note:Restriction

  (4) An amount shall not be included in the total for B in the formula set out in subsection (2) for a particular reporting period of a charity to the extent that the amount was claimed or included as an input tax credit or deduction in determining the net tax for a preceding reporting period of the charity unless

  • (a) the charity was not entitled to claim the amount in determining the net tax for that preceding period only because the charity did not satisfy the requirements of subsection 169(4) in respect of the amount before the return for that preceding period was filed; and

  • (b) where the charity is claiming the amount in a return for the particular reporting period and the Minister has not disallowed the amount as an input tax credit in assessing the net tax of the charity for that preceding reporting period,

    • (i) the charity reports in writing to the Minister, at or before the time the return for the particular reporting period is filed, that the charity made an error in claiming that amount in determining the net tax of the charity for that preceding period, and

    • (ii) if the charity does not report the error to the Minister at least three months before the time limited by subsection 298(1) for assessing the net tax of the charity for that preceding period expires, the charity pays, at or before the time the return for the particular reporting period is filed, the amount and any applicable interest to the Receiver General.

• Marginal note:Restriction

  (4.1) An amount is not to be included in the total for B in the formula set out in subsection (2) for a reporting period of a charity to the extent that, before the end of the period, the amount

  • (a) is included in an adjustment, refund or credit for which a credit note referred to in subsection 232(3) has been received by the charity or a debit note referred to in that subsection has been issued by the charity; or

  • (b) was otherwise rebated, refunded or remitted to the charity, or was otherwise recovered by the charity, under this or any other Act of Parliament.

• Marginal note:Application

  (5) Sections 231 to 236 do not apply for the purpose of determining the net tax of a charity in accordance with subsection (2) except as otherwise provided in this section.

• Marginal note:Election

  (6) Where a charity that makes supplies outside Canada, or zero-rated supplies, in the ordinary course of a business or all or substantially all of whose supplies are taxable supplies elects not to determine its net tax in accordance with subsection (2), that subsection does not apply in respect of any reporting period of the charity during which the election is in effect.

• Marginal note:Form and content of election

  (7) An election under subsection (6) by a charity shall

  • (a) be filed in prescribed manner with the Minister in prescribed form containing prescribed information;

  • (b) set out the day the election is to become effective, which day shall be the first day of a reporting period of the charity;

  • (c) remain in effect until a revocation of the election becomes effective; and

  • (d) be filed

    • (i) where the first reporting period of the charity in which the election is in effect is a fiscal year of the charity, on or before the first day of the second fiscal quarter of that year or such later day as the Minister may determine on application of the charity, and

    • (ii) in any other case, on or before the day on or before which the return of the charity is required to be filed under this Division for the first reporting period of the charity in which the election is in effect or on such later day as the Minister may determine on application of the charity.

• Marginal note:Revocation

  (8) An election under subsection (6) by a charity may be revoked, effective on the first day of a reporting period of the charity, provided that that day is not earlier than one year after the election became effective and a notice of revocation of the election in prescribed form containing prescribed information is filed in prescribed manner with the Minister on or before the day on or before which the return under this Division is required to be filed for the last reporting period of the charity in which the election is in effect.

• Marginal note:Restriction on input tax credits

  (9) Where an election under subsection (6) by a charity becomes effective on a day, an amount

  • (a) that is an input tax credit of the charity, or

  • (b) that is in respect of a specified supply and may be deducted by the charity under subsection 232(3) or 234(2) in determining the net tax of the charity,

  for a reporting period ending before that day and that is not claimed in a return for any reporting period ending before that day shall not be claimed by the charity in a return for a reporting period ending after that day except to the extent that the charity was entitled to include the amount in the total determined for B in the formula in subsection (2) for any reporting period ending before that day.

• Marginal note:Streamlined input tax credit calculation

  (10) Where a charity is a prescribed person for the purposes of subsection 259(12) during a reporting period of the charity, any input tax credit that the charity is entitled to claim in a return for that reporting period may be determined in accordance with Part V.1 of the Streamlined Accounting (GST/HST) Regulations as if the charity had made a valid election under section 227 that is in effect at all times while the charity is a prescribed person.

• Marginal note:Exception

  (11) This section does not apply to a charity that is designated under section 178.7.