Select Luxury Items Tax Act (S.C. 2022, c. 10, s. 135)

Marginal note:Where vessel journeys originate and terminate

• 11 (1) For the purposes of this section, a journey by a subject vessel originates at the location at which any of the following activities occur and terminates at the location where the subject vessel is next stopped and at which any of the following activities occur:

  • (a) individuals embark on or disembark from the subject vessel;

  • (b) goods are loaded onto or removed from the subject vessel; and

  • (c) the subject vessel is stopped to allow for its servicing or refuelling or for emergency or safety purposes.

• Marginal note:Use in Canada — vessel

  (2) For the purposes of this section, if a journey by a subject vessel originates or terminates at a location in Canada, the subject vessel is deemed to be used in Canada for the duration of the entire journey.

• Marginal note:Qualifying activities — vessel

  (3) For the purposes of this section, except in prescribed circumstances, a subject vessel (other than a select subject vessel) is used in Canada in the course of a qualifying activity at any time if

  • (a) the subject vessel is used in Canada at that time otherwise than for the leisure, recreation, sport or other enjoyment of

    • (i) an owner of the subject vessel,

    • (ii) a guest of an owner of the subject vessel on the subject vessel, or

    • (iii) another person that has the right to use the subject vessel under a lease, licence or similar arrangement or a guest of the other person on the subject vessel; or

  • (b) prescribed circumstances exist.

• Marginal note:Qualifying subject vessel

  (4) For the purposes of this Act, except in prescribed circumstances, a subject vessel (other than a select subject vessel) is a qualifying subject vessel of a person at a particular time that is on a particular day if the person is an owner of the subject vessel at the particular time and the amount determined by the following formula is greater than or equal to 0.9:

  (A + B + C) / (D + E + F)

  where

  A

  is

  • (a) if the particular time is the time at which the person acquires ownership of the subject vessel, zero, and

  • (b) in any other case, the total of all amounts, each of which is a duration of time that the subject vessel was used in Canada in the course of a qualifying activity during the period that ends on the particular day and begins on the later of

    • (i) the day on which the person acquired ownership of the subject vessel, and

    • (ii) the day that is one year before the particular day;

  B

  is the total of all amounts, each of which is a duration of time for which it can reasonably be expected that the subject vessel will be used in Canada in the course of a qualifying activity during the period that begins on the day after the particular day and that ends on

  • (a) if it can reasonably be expected that the person will transfer ownership of the subject vessel before the day that is one year after the particular day, the day on which it can reasonably be expected that the person will transfer ownership of the subject vessel, and

  • (b) in any other case, the day that is one year after the particular day;

  C

  is a prescribed amount;

  D

  is

  • (a) if the particular time is the time at which the person acquires ownership of the subject vessel, zero, and

  • (b) in any other case, the total of all amounts, each of which is a duration of time that the subject vessel was used in Canada during the period that ends on the particular day and begins on the later of

    • (i) the day on which the person acquired ownership of the subject vessel, and

    • (ii) the day that is one year before the particular day;

  E

  is the total of all amounts, each of which is a duration of time for which it can reasonably be expected that the subject vessel will be used in Canada during the period that begins on the day after the particular day and that ends on

  • (a) if it can reasonably be expected that the person will transfer ownership of the subject vessel before the day that is one year after the particular day, the day on which it can reasonably be expected that the person will transfer ownership of the subject vessel to another person, and

  • (b) in any other case, the day that is one year after the particular day; and

  F

  is a prescribed amount.

• Marginal note:Qualifying subject vessel — regulations

  (5) For the purposes of this Act, a subject vessel is a qualifying subject vessel of a person at any time if prescribed conditions are met.

Marginal note:Registration of vehicle

• 12 (1) For the purposes of this Act, a subject vehicle is registered with a government if it is registered with, or licensed by, that government for the purposes of permitting that subject vehicle to travel on public roads within the jurisdiction of that government.

• Marginal note:Registration of aircraft

  (2) For the purposes of this Act, a subject aircraft is registered with a government if it is registered with, or licensed by, that government for the purposes of permitting that subject aircraft to fly within the jurisdiction of that government.

• Marginal note:Registration of vessel

  (3) For the purposes of this Act, a subject vessel is registered with a government if it is registered with, or licensed by, that government for the purposes of permitting that subject vessel to navigate within the jurisdiction of that government.

SUBDIVISION BConsideration and Retail Value

Marginal note:Definitions

• 13 (1) The following definitions apply in this Subdivision.

  money

  money includes any currency, cheque, promissory note, letter of credit, draft, traveller’s cheque, bill of exchange, postal note, money order, postal remittance and other similar instrument, whether Canadian or foreign, but does not include currency the fair market value of which exceeds its stated value as legal tender in the country of issuance or currency that is supplied or held for its numismatic value. (argent)

  provincial levy

  provincial levy means

  • (a) a tax, duty or fee imposed under an Act of the legislature of a province in respect of the supply, consumption or use of property or a service, other than

    • (i) a tax, duty or fee that is included in the Taxes, Duties and Fees (GST/HST) Regulations or that would be so included if paragraph 3(b) of those Regulations were read without reference to subparagraph (iv) of that paragraph, or

    • (ii) a prescribed tax, duty, fee or amount; or

  • (b) a prescribed tax, duty or fee. (prélèvement provincial)

  supply

  supply means a provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition. (fourniture)

• Marginal note:When supply is made

  (2) For the purposes of this Subdivision, a supply is made at the time at which

  • (a) if the supply is a sale of a subject item, the sale is completed;

  • (b) if the supply is an improvement in respect of a subject item, the improvement is completed;

  • (c) if the supply is made in connection with a sale of a subject item and is not an improvement in respect of the subject item, the sale is completed;

  • (d) if the supply is made in connection with an improvement in respect of a subject item and is not an improvement in respect of the subject item, the improvement is completed; and

  • (e) in any other case, the supply is made for the purposes of Part IX of the Excise Tax Act.

• Marginal note:When supply is made — regulations

  (3) Despite subsection (2), for the purposes of this Subdivision, if prescribed conditions are met in respect of a supply, the supply is made at the prescribed time.

Marginal note:Value of consideration

• 14 (1) Subject to this Subdivision, for the purposes of this Act, the value of the consideration, or any part of the consideration, for a supply is deemed to be equal to

  • (a) if the consideration or that part is expressed in money, the amount of the money; and

  • (b) in any other case, the fair market value of the consideration or that part at the time at which the supply was made.

• Marginal note:Combined consideration

  (2) Subject to subsections (3) and (4), for the purposes of this Act, if

  • (a) consideration is paid for a supply and other consideration is paid for one or more other supplies or matters, and

  • (b) the consideration for one of the supplies or matters exceeds the consideration that would be reasonable if the other supply were not made or the other matter were not provided,

  the consideration for each of the supplies and matters is deemed to be that part of the total of all amounts, each of which is consideration for one of those supplies or matters, that may reasonably be attributed to each of those supplies and matters.

• Marginal note:Consideration for sale includes fees

  (3) For the purposes of this Act, if consideration is paid for the sale of a subject item and other consideration is paid for one or more other supplies or matters (other than an improvement in respect of the subject item) and the other consideration represents a fee or other similar charge in respect of the subject item or the sale, the following rules apply:

  • (a) the other supplies and matters are deemed to form part of the sale; and

  • (b) the other consideration is to be included in the consideration for the sale.

• Marginal note:Consideration for improvement includes fees

  (4) For the purposes of this Act, if consideration is paid for an improvement in respect of a subject item and other consideration is paid for one or more other supplies or matters (other than a sale of the subject item) and the other consideration represents a fee or other similar charge in respect of the improvement, the following rules apply:

  • (a) the other supplies and matters are deemed to form part of the improvement; and

  • (b) the other consideration is to be included in the consideration for the improvement.

• Marginal note:Incidental supplies

  (5) For the purposes of this Act, if a particular property or service is supplied together with any other property or service for a single consideration and if it may reasonably be regarded that the provision of the other property or service is incidental to the provision of the particular property or service, the other property or service is deemed to form part of the particular property or service so supplied.

• Marginal note:Non-arm’s length supplies

  (6) For the purposes of this Act, if a supply of property or a service is made between persons not dealing with each other at arm’s length for consideration less than the fair market value of the property or service at the time at which the supply is made, the consideration paid for the supply is deemed to be equal to the fair market value of the property or service at that time.

• Marginal note:Nominal consideration

  (7) For the purposes of this Act, if a supply of property or a service is made for no consideration or nominal consideration, the consideration paid for the supply is deemed to be equal to the fair market value of the property or service at the time at which the supply is made.

• Marginal note:Improvement by way of lease, etc.

  (8) For the purposes of this Act, if an improvement in respect of a subject item is provided by way of lease, licence or similar arrangement and the improvement is the provision of tangible personal property, the consideration paid for the improvement is deemed to be equal to the fair market value of the improvement at the time at which the improvement is completed.

• Marginal note:Value in Canadian currency

  (9) For the purposes of this Act, if the consideration for a supply is expressed in a foreign currency, the value of the consideration is to be computed on the basis of the value of that foreign currency in Canadian currency on the day that the supply is made, or on such other day as is acceptable to the Minister.

Marginal note:Levies included in consideration

15 For the purposes of this Act, the consideration for a supply of property or a service includes

• (a) any tax, duty or fee imposed under an Act of Parliament that is payable or collectible in respect of the supply, production or importation of the property or service, other than tax under this Act or Part IX of the Excise Tax Act that is payable in respect of the property or service;

• (b) any provincial levy that is payable or collectible in respect of the supply or production of the property or service; and

• (c) any other amount that is collectible in respect of the supply or production of the property or service under an Act of the legislature of a province and that is equal to, or is collectible on account of or in lieu of, a provincial levy.

Marginal note:Retail value of subject item

16 For the purposes of this Act, the retail value of a subject item at any time is the amount determined by the formula

SUBDIVISION CHer Majesty

Marginal note:Her Majesty

17 This Act is binding on Her Majesty in right of Canada or a province.

DIVISION 2Application of Tax

SUBDIVISION ATax on Sale

Marginal note:Tax — sale of subject item

• 18 (1) Subject to this Act, if a vendor sells a subject item to a purchaser and the taxable amount of the subject item exceeds the price threshold in respect of the subject item, tax in respect of the subject item is payable to Her Majesty in right of Canada in the amount determined under section 34.

• Marginal note:Liability for tax — vendor or purchaser

  (2) The tax under subsection (1) in respect of a subject item sold by a vendor to a purchaser is payable by

  • (a) the purchaser, in the case where the vendor is

    • (i) Her Majesty in right of Canada or a province,

    • (ii) an agent of Her Majesty in right of Canada or a province,

    • (iii) an Indigenous governing body,

    • (iv) a person entitled to tax relief privileges under the Foreign Missions and International Organizations Act for the tax payable under subsection 165(1) of the Excise Tax Act in respect of the sale, or

    • (v) a prescribed person; and

  • (b) the vendor, in any other case.

• Marginal note:When tax payable

  (3) The tax under subsection (1) becomes payable at the time at which the sale is completed.

• Marginal note:Taxable amount

  (4) Subject to subsections (5) to (7), the taxable amount of a subject item sold by a vendor to a purchaser is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B + C

  where

  A

  is the value of the consideration for the sale of the subject item;

  B

  is the total of all amounts, each of which is the value of the consideration for an improvement in respect of the subject item that is provided by the vendor, or a person that does not deal at arm’s length with the vendor, in connection with the sale of the subject item, but only to the extent that the amount is not included in the determination of A; and

  C

  is a prescribed amount.

• Marginal note:Taxable amount — lease by non-arm’s length purchaser

  (5) Subject to subsection (7), if a vendor sells a subject item to a purchaser that does not deal at arm’s length with the vendor, if the purchaser and another person enter into a lease, licence or similar arrangement (in this subsection referred to as the “lease agreement”) that provides the other person with the right to use the subject item for a period of at least six months and if the lease agreement is entered into in connection with the sale, the taxable amount of the subject item is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B

  where

  A

  is the greatest of

  • (a) the value of the consideration for the sale,

  • (b) the retail value of the subject item at the time at which the other person first has the right to use the subject item under the lease agreement, and

  • (c) the retail value of the subject item at the time at which possession of the subject item is transferred to the other person under the lease agreement; and

  B

  is a prescribed amount.

• Marginal note:Taxable amount — lease to vendor by purchaser

  (6) Subject to subsection (7), if a vendor sells a subject item to a purchaser, if the purchaser and the vendor enter into a lease, licence or similar arrangement (in this subsection referred to as the “lease agreement”) that provides the vendor with the right to use the subject item for a period of at least six months and if the lease agreement is entered into in connection with the sale, the taxable amount of the subject item is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula

  A + B

  where

  A

  is the greater of

  • (a) the value of the consideration for the sale, and

  • (b) the retail value of the subject item at the time at which the vendor first has the right to use the subject item under the lease agreement; and

  B

  is a prescribed amount.

• Marginal note:Taxable amount — regulations

  (7) For the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the taxable amount of a subject item in prescribed circumstances is to be determined in prescribed manner.