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Excise Tax Act

Version of section 261.01 from 2023-06-22 to 2024-11-26:


Marginal note:Definitions

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

    active member

    active member has the meaning assigned by subsection 8500(1) of the Income Tax Regulations. (participant actif)

    claim period

    claim period has the meaning assigned by subsection 259(1). (période de demande)

    eligible amount

    eligible amount of a pension entity for a claim period of the pension entity means an amount of tax, other than a recoverable amount in respect of the claim period, that

    • (a) became payable by the pension entity during the claim period, or was paid by the pension entity during the claim period without having become payable, in respect of a supply, importation or bringing into a participating province of property or a service that the pension entity acquired, imported or brought into the participating province, as the case may be, for consumption, use or supply in respect of a pension plan, other than an amount of tax that

      • (i) is deemed to have been paid by the pension entity under this Part (other than section 191),

      • (ii) became payable, or was paid without having become payable, by the pension entity at a time when it was entitled to claim a rebate under section 259,

      • (iii) was payable under subsection 165(1), or is deemed under section 191 to have been paid, by the pension entity in respect of a taxable supply to the pension entity of a residential complex, an addition to a residential complex or land if, in respect of that supply, the pension entity was entitled to claim a rebate under section 256.2 or would be so entitled after paying the tax payable in respect of that supply, or

      • (iv) if the pension entity is a selected listed financial institution throughout the claim period, was payable under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1; or

    • (b) is deemed to have been paid by the pension entity under section 172.1 or 172.2 during the claim period. (montant admissible)

    employee PRPP contribution

    employee PRPP contribution means a contribution by an employee of an employer to a pooled registered pension plan that

    • (a) may be deducted by the employee under paragraph 60(i) of the Income Tax Act in computing their income; and

    • (b) is remitted by the employer to the PRPP administrator of the plan under a contract with the PRPP administrator in respect of all or a class of the employees of the employer. (cotisation RPAC de salarié)

    employer contribution

    employer contribution means a contribution by an employer to a pension plan that may be deducted by the employer under paragraph 20(1)(q) of the Income Tax Act in computing its income. (cotisation d’employeur)

    multi-employer plan

    multi-employer plan[Repealed, 2010, c. 12, s. 75]

    non-qualifying pension entity

    non-qualifying pension entity means a pension entity that is not a qualifying pension entity. (entité de gestion non admissible)

    participating employer

    participating employer[Repealed, 2012, c. 31, s. 88]

    pension contribution

    pension contribution[Repealed, 2014, c. 39, s. 97]

    pension entity

    pension entity[Repealed, 2012, c. 31, s. 88]

    pension plan

    pension plan[Repealed, 2012, c. 31, s. 88]

    pension rebate amount

    pension rebate amount of a pension entity of a pension plan for a claim period of the pension entity means the amount determined by the formula

    A × B

    where

    A
    is
    • (a) if the pension plan is a registered pension plan, 33%,

    • (b) if the pension plan is a pooled registered pension plan and either employer contributions or employee PRPP contributions were made to the pension plan in the particular calendar year that is the last calendar year ending on or before the last day of the claim period, the amount (expressed as a percentage) determined by the formula

      33% × (C/D)

      where

      C
      is the total of all amounts, each of which is determined for an employer that made employer contributions to the pension plan in the particular calendar year by the formula

      C1 + C2

      where

      C1
      is the total of all amounts, each of which is an employer contribution made by the employer to the pension plan in the particular calendar year, and
      C2
      is the total of all amounts, each of which is an employee PRPP contribution made by an employee of the employer to the pension plan in the particular calendar year, and
      D
      is the total of all amounts contributed to the pension plan in the particular calendar year,
    • (c) if the pension plan is a pooled registered pension plan, neither employer contributions nor employee PRPP contributions were made to the pension plan in the particular calendar year that is the last calendar year ending on or before the last day of the claim period and it is reasonable to expect that employer contributions will be made to the pension plan in a following calendar year, the amount (expressed as a percentage) determined for the first calendar year in which employer contributions are reasonably expected to be made to the pension plan following the particular calendar year by the formula

      33% × (E/F)

      where

      E
      is the total of all amounts, each of which is determined for an employer reasonably expected to make employer contributions to the pension plan in that first calendar year by the formula

      E1 + E2

      where

      E1
      is the total of all amounts, each of which is an employer contribution reasonably expected to be made by the employer to the pension plan in that first calendar year, and
      E2
      is the total of all amounts, each of which is an employee PRPP contribution reasonably expected to be made by an employee of the employer to the pension plan in that first calendar year, and
      F
      is the total of all amounts reasonably expected to be contributed to the pension plan in that first calendar year, or
    • (d) if the pension plan is a pooled registered pension plan and paragraphs (b) and (c) do not apply, 0%; and

    B
    is the amount determined by the formula

    G + H

    where

    G
    is the total of all amounts, each of which is an eligible amount of the pension entity for the claim period that is described in paragraph (a) of the definition eligible amount, and
    H
    is
    • (i) if an application for a rebate under subsection (2) for the claim period is filed in accordance with subsection (3), the total of

      • (A) the total amount indicated on the application under subsection (3.1), and

      • (B) the total of all amounts, each of which is an eligible amount of the pension entity for the claim period that is described in paragraph (b) of the definition eligible amount and in respect of which a portion of the rebate is claimed by the pension entity in accordance with paragraph (3.2)(a),

    • (ii) if an election made under subsection (9) for the claim period is filed in accordance with subsection (10), the total amount indicated on the election in accordance with paragraph (10)(c), or

    • (iii) in any other case, zero. (montant de remboursement de pension)

    provincial pension rebate amount

    provincial pension rebate amount of a pension entity for a claim period of the pension entity in a fiscal year that ends in a taxation year of the pension entity means the amount equal to

    • (a) if the pension entity is a selected listed financial institution throughout the claim period, the total of all amounts, each of which is determined for a participating province by the formula

      A × B × C/D

      where

      A
      is the pension rebate amount of the pension entity for the claim period,
      B
      is the pension entity’s percentage for the participating province for the taxation year for the purposes of C in the formula in subsection 225.2(2),
      C
      is the tax rate for the participating province, and
      D
      is the rate set out in subsection 165(1); and
    • (b) in any other case, zero. (montant de remboursement de pension provincial)

    qualifying employer

    qualifying employer of a pension plan for a calendar year means a participating employer of the pension plan that is a registrant and that

    • (a) if employer contributions were made to the pension plan in the immediately preceding calendar year, made employer contributions to the pension plan in that year; and

    • (b) in any other case, was the employer of one or more active members of the pension plan in the immediately preceding calendar year. (employeur admissible)

    qualifying pension entity

    qualifying pension entity means a pension entity of a pension plan other than a pension plan in respect of which

    • (a) listed financial institutions made 10% or more of the total employer contributions to the pension plan in the last preceding calendar year in which employer contributions were made to the pension plan; or

    • (b) it can reasonably be expected that listed financial institutions will make 10% or more of the total employer contributions to the pension plan in the next calendar year in which employer contributions will be required to be made to the pension plan. (entité de gestion admissible)

    recoverable amount

    recoverable amount in respect of a claim period of a person means an amount of tax

    • (a) that is included in determining an input tax credit of the person for the claim period;

    • (b) for which it can reasonably be regarded that the person has obtained or is entitled to obtain a rebate, refund or remission under any other section of this Act or under any other Act of Parliament; or

    • (c) that can reasonably be regarded as having been included in an amount adjusted, refunded or credited to or in favour of the person 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. (montant recouvrable)

    tax recovery rate

    tax recovery rate of a person for a fiscal year of the person means the lesser of

    • (a) 100%; and

    • (b) the amount (expressed as a percentage) determined by the formula

      (A + B) / C

      where

      A
      is the total of all amounts, each of which is
      • (i) if the person is a selected listed financial institution at any time in the fiscal year, an input tax credit of the person, in respect of an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01, for a reporting period of the person included in the fiscal year, and

      • (ii) in any other case, an input tax credit of the person for a reporting period of the person included in the fiscal year,

      B
      is the total of all amounts, each of which is
      • (i) if the person is a selected listed financial institution at any time in the fiscal year, a rebate to which the person is entitled under section 259, in respect of an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01, for a claim period of the person included in the fiscal year, and

      • (ii) in any other case, a rebate to which the person is entitled under section 259 for a claim period of the person included in the fiscal year, and

      C
      is the total of all amounts, each of which is
      • (i) if the person is a selected listed financial institution at any time in the fiscal year, an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01 that became payable, or was paid without having become payable, by the person during the fiscal year, and

      • (ii) in any other case, an amount of tax that became payable, or was paid without having become payable, by the person during the fiscal year. (taux de recouvrement de taxe)

  • Marginal note:Rebate for qualifying pension entities

    (2) If a pension entity is a qualifying pension entity on the last day of a claim period of the pension entity, the Minister shall pay a rebate to the pension entity for the claim period equal to the amount determined by the formula

    A – B

    where

    A
    is the pension rebate amount of the pension entity for the claim period; and
    B
    is the total of all amounts, each of which is an amount
    • (a) determined by the formula

      C × D

      where

      C
      is an amount determined for A in the formula in subsection (5) for a qualifying employer as a consequence of an election made under that subsection for the claim period, and
      D
      is the percentage specified for the qualifying employer in the election, or
    • (b) determined under paragraph (6)(a) in respect of a qualifying employer as a consequence of an election made under subsection (6) for the claim period.

  • Marginal note:Application for rebate

    (3) A rebate under subsection (2) shall not be paid for a claim period of a pension entity, unless the pension entity files an application for the rebate within two years after the day that is

    • (a) if the pension entity is a registrant, the day on or before which the pension entity is required to file a return under Division V for the claim period; and

    • (b) in any other case, the last day of the claim period.

  • Marginal note:Application for rebate — pension rebate amount election

    (3.1) An application for a rebate under subsection (2) for a claim period of a pension entity shall indicate the total of all amounts, each of which is an eligible amount of the pension entity for the claim period (other than an eligible amount in respect of which a portion of the rebate is claimed by the pension entity in accordance with paragraph (3.2)(a))

    • (a) that is described in paragraph (b) of the definition eligible amount in subsection (1); and

    • (b) that the pension entity elects to include in the determination of the pension rebate amount of the pension entity for the claim period.

  • Marginal note:Separate claims for a claim period

    (3.2) If an eligible amount of a pension entity for a claim period of the pension entity is an amount of tax that is deemed to have been paid under subparagraph 172.1(8.01)(b)(i), or to have become payable under section 172.11, the following rules apply:

    • (a) the portion of the rebate under subsection (2) for the claim period that is in respect of the excess pension rebate amount for the claim period in respect of the eligible amount may, despite subsection (4), be claimed in an application separate from the pension entity’s application for the portion of that rebate that is in respect of the remaining pension rebate amount for the claim period provided that the application for the portion of that rebate that is in respect of that excess pension rebate amount is filed by the pension entity after the beginning of the pension entity’s fiscal year that includes the claim period and not later than

      • (i) if the pension entity is a registrant, the day on or before which the pension entity is required to file the return under Division V for the claim period, or

      • (ii) in any other case, the last day of the claim period; and

    • (b) a particular election under subsection (5) or (6) for the claim period that is in respect of the excess pension rebate amount for the claim period in respect of the eligible amount may be made separately from an election under subsection (5) or (6), as the case may be, that is in respect of the remaining pension rebate amount for the claim period provided that the portion of the rebate under subsection (2) for the claim period that is in respect of that excess pension rebate amount is claimed by the pension entity in a separate application that is filed in accordance with paragraph (a) and the particular election is filed at the same time that the application is filed.

  • Marginal note:Definitions

    (3.3) The following definitions apply in this subsection and subsection (3.2).

    excess pension rebate amount

    excess pension rebate amount for a claim period of a pension entity means, in respect of an amount of tax deemed to have been paid under subparagraph 172.1(8.01)(b)(i), or to have become payable under section 172.11, by the pension entity during the claim period, the amount that would be the pension rebate amount of the pension entity for the claim period if the amount of tax were the only eligible amount of the pension entity for the claim period. (excédent du montant de remboursement de pension)

    remaining pension rebate amount

    remaining pension rebate amount for a claim period of a pension entity means the amount determined by the formula

    A − B

    where

    A
    is the pension rebate amount of the pension entity for the claim period; and
    B
    is the total of all amounts, each of which is an excess pension rebate amount for the claim period in respect of which a portion of the rebate under subsection (2) for the claim period is claimed by the pension entity in accordance with paragraph (3.2)(a). (solde du montant de remboursement de pension)
  • Marginal note:Limitation

    (4) A pension entity shall not make more than one application for a rebate under subsection (2) for any claim period of the pension entity.

  • Marginal note:Election to share rebate — engaged exclusively in commercial activities

    (5) If a pension entity of a pension plan is a qualifying pension entity on the last day of a claim period of the pension entity, the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan and each of those qualifying employers is engaged exclusively in commercial activities throughout the claim period, each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister an amount determined by the formula

    (A + B) × C

    where

    A
    is the pension rebate amount of the pension entity for the claim period;
    B
    is the provincial pension rebate amount of the pension entity for the claim period; and
    C
    is the percentage specified for the qualifying employer in the election.
  • Marginal note:Election to share rebate — not engaged exclusively in commercial activities

    (6) If a pension entity of a pension plan is a qualifying pension entity on the last day of a claim period of the pension entity, the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan and any of those qualifying employers is not engaged exclusively in commercial activities throughout the claim period, the following rules apply:

    • (a) an amount (in this subsection referred to as a “shared portion”) shall be determined for the purposes of this section in respect of each of those qualifying employers by the formula

      A × B × C

      where

      A
      is the pension rebate amount of the pension entity for the claim period,
      B
      is the percentage specified for the qualifying employer in the election, and
      C
      is
      • (i) in the case where employer contributions were made to the pension plan in the calendar year that immediately precedes the calendar year that includes the last day of the claim period (in this paragraph referred to as the “preceding calendar year”), the amount determined by the formula

        D/E

        where

        D
        is the total of all amounts, each of which is
        • (A) an employer contribution made by the qualifying employer to the pension plan in the preceding calendar year, or

        • (B) an employee PRPP contribution made by an employee of the qualifying employer to the pension plan in the preceding calendar year, if the qualifying employer made employer contributions to the pension plan in the preceding calendar year, and

        E
        is the total of all amounts, each of which is
        • (A) if the pension plan is a registered pension plan, an employer contribution made to the pension plan in the preceding calendar year, or

        • (B) if the pension plan is a pooled registered pension plan, an amount contributed to the pension plan in the preceding calendar year,

      • (ii) in the case where subparagraph (i) does not apply and one or more qualifying employers of the pension plan was the employer of one or more active members of the pension plan in the preceding calendar year, the amount determined by the formula

        F/G

        where

        F
        is the total number of employees of the qualifying employer in the preceding calendar year who were active members of the pension plan in that year, and
        G
        is the sum of the total number of employees of each of those qualifying employers in the preceding calendar year who were active members of the pension plan in that year, and
      • (iii) in any other case, zero; and

    • (b) each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister an amount determined by the formula

      (A + B) × C

      where

      A
      is the shared portion in respect of the qualifying employer as determined under paragraph (a),
      B
      is the amount determined by the formula

      D × E × F

      where

      D
      is the provincial pension rebate amount of the pension entity for the claim period,
      E
      is the percentage specified for the qualifying employer in the election, and
      F
      is the amount determined for C in the formula in paragraph (a), and
      C
      is the tax recovery rate of the qualifying employer for the fiscal year of the qualifying employer that ended on or before the last day of the claim period.
  • Marginal note:Engaged exclusively in commercial activities

    (7) For the purposes of subsections (5) and (6), a qualifying employer of a pension plan is engaged exclusively in commercial activities throughout a claim period of a pension entity of the pension plan if

    • (a) in the case of a qualifying employer that is a financial institution at any time in the claim period, all of the activities of the qualifying employer for the claim period are commercial activities; and

    • (b) in any other case, all or substantially all of the activities of the qualifying employer for the claim period are commercial activities.

  • Marginal note:Form and manner of filing

    (8) An election made under subsection (5) or (6) by a pension entity of a pension plan and the qualifying employers of the pension plan shall

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

    • (b) be filed by the pension entity with the Minister in prescribed manner

      • (i) at the same time the application for the rebate under subsection (2) for the claim period is filed by the pension entity, and

      • (ii) within two years after the day that is

        • (A) if the pension entity is a registrant, the day on or before which the pension entity is required to file a return under Division V for the claim period, and

        • (B) in any other case, the last day of the claim period;

    • (c) in the case of an election under subsection (5), indicate the percentage specified for each qualifying employer, the total of which for all qualifying employers shall not exceed 100%; and

    • (d) in the case of an election under subsection (6), indicate for each qualifying employer the percentage specified for the qualifying employer, which shall not exceed 100%.

  • Marginal note:Non-qualifying pension entities

    (9) If a pension entity of a pension plan is a non-qualifying pension entity on the last day of a claim period of the pension entity and the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan, each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister the amount determined by the formula

    (A + B) × C × D

    where

    A
    is the pension rebate amount of the pension entity for the claim period;
    B
    is the provincial pension rebate amount of the pension entity for the claim period;
    C
    is
    • (a) in the case where employer contributions were made to the pension plan in the calendar year (in this subsection referred to as the “preceding calendar year”) that immediately precedes the calendar year that includes the last day of the claim period, the amount determined by the formula

      E/F

      where

      E
      is the total of all amounts, each of which is
      • (A) an employer contribution made by the qualifying employer to the pension plan in the preceding calendar year, or

      • (B) an employee PRPP contribution made by an employee of the qualifying employer to the pension plan in the preceding calendar year, if the qualifying employer made employer contributions to the pension plan in the preceding calendar year, and

      F
      is the total of all amounts, each of which is
      • (A) if the pension plan is a registered pension plan, an employer contribution made to the pension plan in the preceding calendar year, or

      • (B) if the pension plan is a pooled registered pension plan, an amount contributed to the pension plan in the preceding calendar year,

    • (b) in the case where subparagraph (a) does not apply and one or more qualifying employers of the pension plan was the employer of one or more active members of the pension plan in the preceding calendar year, the amount determined by the formula

      G/H

      where

      G
      is the total number of employees of the qualifying employer in the preceding calendar year who were active members of the pension plan in that year, and
      H
      is the sum of the total number of employees of each of those qualifying employers in the preceding calendar year who were active members of the pension plan in that year, and
    • (c) in any other case, zero; and

    D
    is the tax recovery rate of the qualifying employer for the fiscal year of the qualifying employer that ended on or before the last day of the claim period.
  • Marginal note:Form and manner of filing

    (10) An election made under subsection (9) for a claim period of a pension entity shall

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

    • (b) be filed by the pension entity with the Minister in prescribed manner within two years after the day that is

      • (i) if the pension entity is a registrant, the day on or before which the pension entity is required to file a return under Division V for the claim period, and

      • (ii) in any other case, the last day of the claim period; and

    • (c) indicate the total of all amounts, each of which is an eligible amount of the pension entity for the claim period

      • (i) that is described in paragraph (b) of the definition eligible amount in subsection (1), and

      • (ii) that the pension entity elects to include in the determination of the pension rebate amount of the pension entity for the claim period.

  • Marginal note:Limitation

    (11) Not more than one election under subsection (9) shall be filed for a claim period of a pension entity.

  • Marginal note:Joint and several liability

    (12) If, in determining the net tax for a reporting period of a qualifying employer of a pension plan, the qualifying employer deducts an amount under subsection (5), paragraph (6)(b) or subsection (9) and either the qualifying employer or the pension entity of the pension plan knows or ought to know that the qualifying employer is not entitled to the amount or that the amount exceeds the amount to which the qualifying employer is entitled, the qualifying employer and the pension entity are jointly and severally, or solidarily, liable to pay the amount or excess to the Receiver General.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2000, c. 30, s. 77
  • 2001, c. 15, s. 17
  • 2010, c. 12, s. 75
  • 2012, c. 31, s. 88
  • 2014, c. 39, s. 97
  • 2017, c. 33, s. 140
  • 2023, c. 26, s. 121

Date modified: