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Excise Tax Act

Version of section 186 from 2021-06-29 to 2023-09-19:


Marginal note:Definition of unit

  •  (0.1) In this section, unit means

    • (a) in respect of a corporation, a share of the capital stock of the corporation;

    • (b) in respect of a partnership, an interest of a person in the partnership; and

    • (c) in respect of a trust, a unit of the trust.

  • Marginal note:Operating corporations

    (0.2) For the purposes of this section, a particular corporation is at a particular time an operating corporation of another person that is a corporation, partnership or trust if, at the particular time, all or substantially all of the property of the particular corporation is property that was last manufactured, produced, acquired or imported by the particular corporation for consumption, use or supply by the particular corporation exclusively in the course of its commercial activities and

    • (a) if the other person is a corporation or a trust, the particular corporation is, at the particular time, related to the other person; or

    • (b) if the other person is a partnership, the particular corporation is, at the particular time, controlled by

      • (i) the other person,

      • (ii) a corporation that is controlled by the other person,

      • (iii) a corporation that is related to a corporation described in subparagraph (ii), or

      • (iv) a combination of persons described in subparagraphs (i) to (iii).

  • Marginal note:Input tax credit

    (1) Unless subsection (2) applies, if at a particular time a registrant (in this subsection referred to as the “parent”) that is resident in Canada and that is a corporation, partnership or trust acquires, imports or brings into a participating province a particular property or service and if at the particular time a particular corporation is an operating corporation of the parent, the parent is deemed, for the purpose of determining an input tax credit of the parent, to have acquired or imported the particular property or service or brought it into the participating province, as the case may be, for use in the course of commercial activities of the parent to the extent that

    • (a) the parent acquired or imported the particular property or service or brought it into the participating province, as the case may be, for the purpose of

      • (i) selling or otherwise disposing of, purchasing or otherwise obtaining, or holding units or indebtedness of the particular corporation by the parent, or

      • (ii) redeeming, issuing or converting or otherwise modifying units or indebtedness of the particular corporation by the particular corporation;

    • (b) the parent acquired or imported the particular property or service or brought it into the participating province, as the case may be, for the purpose of issuing or selling units or indebtedness of the parent, the parent transfers to the particular corporation the proceeds from the issuance or sale by lending money to the particular corporation or by purchasing or otherwise obtaining from the particular corporation units or indebtedness of the particular corporation, and the proceeds that are transferred to the particular corporation are for use in the course of its commercial activities; or

    • (c) if at the particular time all or substantially all of the property of the parent is property that was manufactured, produced, acquired or imported by the parent for consumption, use or supply exclusively in the course of its commercial activities, property that is units or indebtedness of operating corporations of the parent or a combination of such property, the parent acquired or imported the particular property or service or brought it into the participating province, as the case may be, for the purpose of carrying on, engaging in or conducting an activity of the parent other than

      • (i) an activity that is primarily in respect of units or indebtedness of a person that is neither the parent nor an operating corporation of the parent, or

      • (ii) an activity that is carried on, engaged in or conducted in the course of making an exempt supply by the parent unless the activity is a financial service that is

        • (A) the lending or borrowing of units or indebtedness of an operating corporation of the parent,

        • (B) the issue, granting, allotment, acceptance, endorsement, renewal, processing, variation, transfer of ownership or repayment of units or indebtedness of the parent or an operating corporation of the parent,

        • (C) the provision, variation, release or receipt of a guarantee, acceptance or indemnity in respect of units or indebtedness of the parent or an operating corporation of the parent,

        • (D) the payment or receipt of money as dividends (other than patronage dividends), interest, principal, benefits, or similar receipt or payment of money in respect of units or indebtedness of the parent or an operating corporation of the parent, or

        • (E) the underwriting of units or indebtedness of an operating corporation of the parent.

  • Marginal note:Takeover fees

    (2) For the purposes of this Part, if

    • (a) a registrant that is a corporation resident in Canada (in this subsection referred to as the “purchaser”) acquires, imports or brings into a participating province a particular property or service relating to the acquisition or proposed acquisition by it of all or substantially all of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of another corporation, and

    • (b) throughout the period beginning when the performance of the particular service began or when the purchaser acquired, imported or brought into the participating province, as the case may be, the particular property and ending at the later of the times referred to in paragraph (c), all or substantially all of the property of the other corporation was property that was last manufactured, produced, acquired or imported for consumption, use or supply exclusively in the course of commercial activities,

    the particular property or service is deemed to have been acquired, imported or brought into the participating province for use exclusively in the course of commercial activities of the purchaser and, for the purpose of claiming an input tax credit, any tax in respect of the supply of the particular property or service to the purchaser, or the importation or bringing in of the particular property by the purchaser, is deemed to have become payable and been paid by the purchaser on the later of

    • (c) the later of the day the purchaser acquired all or substantially all of the shares and the day the intention to acquire the shares was abandoned, and

    • (d) the day the tax became payable or was paid by the purchaser.

  • Marginal note:Shares, etc., held by corporation

    (3) If at a particular time a particular corporation is an operating corporation of another corporation, all units of the particular corporation owned by, and all indebtedness of the particular corporation owed to, the other corporation are, for the purposes of this section, deemed to be, at the particular time, property that was acquired by the other corporation for use exclusively in the course of its commercial activities.

  • [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. 49
  • 1997, c. 10, s. 180
  • 2000, c. 30, s. 38
  • 2021, c. 23, s. 106
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