Excise Tax Act

Marginal note:Meaning of “specified service”

• 261.31 (1) In this section, specified service means a management or administrative service and any other service provided to the recipient of a supply of a management or administrative service by the supplier of that management or administrative service.

• Marginal note:Rebate for management services supplied to investment plans, etc.

  (2) Where a listed financial institution described in subparagraph 149(1)(a)(vi) or (ix), other than a selected listed financial institution, is the recipient of a supply of a specified service and tax under subsection 165(2), 218.1(1) or 220.08(1) is payable in respect of the supply, the Minister shall, subject to section 261.4, pay a rebate to the financial institution equal to

  • (a) where the tax is payable under subsection 165(2), the amount determined by the formula

    A × B

    where

    A

    is the amount of that tax, and

    B

    is the extent (expressed as a percentage) to which the financial institution may reasonably be regarded as holding or investing funds for the benefit of persons who are resident outside the participating provinces; and

  • (b) where the tax is payable under subsection 218.1(1) or 220.08(1), the amount determined by the formula

    A - (B × C)

    where

    A

    is the amount of that tax,

    B

    is the amount of tax that would be payable under that subsection if the service were acquired by the financial institution for consumption, use or supply exclusively in participating provinces, and

    C

    is the extent (expressed as a percentage) to which the financial institution may reasonably be regarded as holding or investing funds for the benefit of persons who are resident in participating provinces.

• Marginal note:Election by segregated fund and insurer

  (3) An insurer and a segregated fund of the insurer may elect, in prescribed form containing prescribed information, to have the insurer pay to, or credit in favour of, the segregated fund the amount of any rebates payable to the segregated fund under subsection (2) in respect of supplies of specified services made by the insurer to the segregated fund.

• Marginal note:Filing of election

  (4) An election made under subsection (3) by an insurer and a segregated fund of the insurer shall be filed with the Minister in prescribed manner on or before the day the insurer files a return of the insurer under Division V for a reporting period of the insurer in which the insurer pays or credits a rebate under subsection (2) to or in favour of the segregated fund.

• Marginal note:Application to insurer

  (5) Where

  • (a) an insurer makes a taxable supply of a specified service to a segregated fund of the insurer,

  • (b) a rebate would be payable under subsection (2) in respect of the supply if the segregated fund complied with section 261.4 in relation to the supply,

  • (c) the insurer and the segregated fund have filed an election made under subsection (3) that is in effect when tax in respect of the supply becomes payable, and

  • (d) the segregated fund, within one year after the day tax becomes payable in respect of the supply, submits to the insurer an application for the rebate in prescribed form containing prescribed information,

  the insurer may pay or credit the amount of the rebate to or in favour of the segregated fund.

• Marginal note:Forwarding of application by insurer

  (6) Where an application of a segregated fund of an insurer for a rebate under subsection (2) is submitted to the insurer in the circumstances described in subsection (5),

  • (a) the insurer shall transmit the application to the Minister with the insurer’s return filed under Division V for the reporting period of the insurer in which the rebate was paid or credited to the segregated fund; and

  • (b) interest under subsection 297(4) is not payable in respect of the rebate.

• Marginal note:Joint and several liability

  (7) Where an insurer, in determining its net tax for a reporting period, deducts an amount under subsection 234(5) that the insurer paid or credited to a segregated fund of the insurer on account of a rebate under subsection (2) and the insurer knows or ought to know that the segregated fund is not entitled to the rebate or that the amount paid or credited exceeds the rebate to which the segregated fund is entitled, the insurer and the segregated fund are jointly and severally liable to pay the amount of the rebate or excess to the Receiver General under section 264.