Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations (SOR/2001-171)

Marginal note:Permanent establishment in province

3 For the purposes of these Regulations,

• (a) if a financial institution is a bank or a credit union and if, at any time in a taxation year of the financial institution, the financial institution maintains a deposit or other similar account that is in the name of a person resident in a province or, at any time in that year, a loan that was made by the financial institution is outstanding and is secured by land situated in a province or, if not secured by land, is owing by a person resident in a province, the following rules apply:

  • (i) the financial institution is deemed to have a permanent establishment in the province throughout the taxation year, and

  • (ii) the following loans made by the financial institution and deposit and other similar accounts maintained by the financial institution are deemed to be loans and deposits of the permanent establishment referred to in subparagraph (i) and not of any other permanent establishment of the financial institution:

    • (A) outstanding loans secured by land situated in the province,

    • (B) outstanding loans, not secured by land, owing by persons resident in the province, and

    • (C) deposit and other similar accounts in the name of a person resident in the province;

• (b) if a financial institution is an insurer that, at any time in a taxation year of the financial institution, is insuring a risk in respect of property ordinarily situated in a province or in respect of a person resident in a province, the financial institution is deemed to have a permanent establishment in the province throughout the taxation year;

• (c) if a financial institution is a trust and loan corporation, a trust corporation or a loan corporation and if, at any time in a taxation year of the financial institution, the financial institution conducts business (other than business in respect of loans) in a province or, at any time in that year, a loan that was made by the financial institution is outstanding and is secured by land situated in a province or, if not secured by land, is owing by a person resident in a province, the financial institution is deemed to have a permanent establishment in the province throughout the taxation year;

• (d) if a financial institution is a segregated fund of an insurer, the financial institution is deemed to have a permanent establishment in a particular province throughout a taxation year of the financial institution if, at any time in the taxation year,

  • (i) the insurer is qualified, under the laws of Canada or a province, to sell units of the financial institution in the particular province, or

  • (ii) a person resident in the particular province holds one or more units of the financial institution;

• (e) if a financial institution is a distributed investment plan (other than a segregated fund of an insurer), the financial institution is deemed to have a permanent establishment in a particular province throughout a taxation year of the financial institution if, at any time in the taxation year,

  • (i) the financial institution is qualified, under the laws of Canada or a province, to sell or distribute units of the financial institution in the particular province, or

  • (ii) a person resident in the particular province holds one or more units of the financial institution; and

• (f) if a financial institution is a private investment plan or an investment plan that is a pension entity of a pension plan and, at any time in a taxation year of the financial institution, a plan member of the financial institution is resident in a province, the financial institution is deemed to have a permanent establishment in the province throughout the taxation year.

Marginal note:Permanent establishment throughout taxation year

4 For the purposes of these Regulations, a financial institution has a permanent establishment in a province throughout a taxation year of the financial institution if the financial institution has a permanent establishment in the province at any time in the taxation year.

Marginal note:Residence of person

5 For the purposes of these Regulations, and despite subsection 132.1(1) of the Act, a person resident in Canada is resident in the province

• (a) if the person is an individual, where the person’s principal mailing address in Canada is located;

• (b) if the person is a corporation or a partnership, where the person’s principal business in Canada is located;

• (c) if the person is a trust governed by a registered retirement savings plan, a registered retirement income fund, a registered education savings plan, a registered disability savings plan or a TFSA, where the principal mailing address in Canada of the annuitant of the registered retirement savings plan or registered retirement income fund, of the subscriber of the registered education savings plan or of the holder of the registered disability savings plan or TFSA is located;

• (d) if the person is a trust, other than a trust described in paragraph (c), where the trustee’s principal business in Canada is located or, if the trustee is not carrying on a business, where the trustee’s principal mailing address in Canada is located; and

• (e) in any other case, where the person’s principal business in Canada is located or, if the person is not carrying on a business, where the person’s principal mailing address in Canada is located.

Marginal note:Definitions — section 225.3 of Act

• 6 (1) For the purpose of section 225.3 of the Act, exchange-traded fund, exchange-traded series, non-stratified investment plan and stratified investment plan have the same meanings as in subsection 1(1).

• Marginal note:Definitions — section 225.4 of Act

  (2) For the purpose of section 225.4 of the Act,

  • (a) exchange-traded fund, exchange-traded series, individual, investment plan, non-stratified investment plan, plan member, private investment plan, series, stratified investment plan and unit have the same meanings as in subsection 1(1); and

  • (b) specified investor has the same meaning as in section 16.

PART 1Prescribed Financial Institutions

Meaning of unrecoverable tax amount

• 7 (1) For the purposes of this section, unrecoverable tax amount for a reporting period of a person means the amount determined by the formula

  A – B

  where

  A

  is the total of all amounts, each of which is

  • (a) an amount that would be included in the total for A in subsection 225.2(2) of the Act, read without reference to any adaptation made under Part 5, for the reporting period, if the person were a selected listed financial institution throughout the reporting period and no election under subsection 55(1) were in effect throughout the reporting period,

  • (b) an amount of tax that the person would be deemed to have paid under any of subsections 172.1(5) to (7.1) of the Act during the reporting period, if the person were a selected listed financial institution throughout the reporting period, or

  • (c) an amount that the person would be required by paragraph 232.01(5)(b) or 232.02(4)(b) of the Act to include in its determination of net tax for the reporting period, if the person were a selected listed financial institution throughout the reporting period; and

  B

  is the total of all amounts, each of which is

  • (a) an amount that would be included in the total for B in subsection 225.2(2) of the Act, read without reference to any adaptation made under Part 5, for the reporting period, if the person were a selected listed financial institution throughout the reporting period and no election under subsection 55(1) were in effect throughout the reporting period,

  • (b) the federal component amount, within the meaning of section 232.01 of the Act, of a tax adjustment note issued under subsection 232.01(3) of the Act to the person during the reporting period, or

  • (c) the federal component amount, within the meaning of section 232.02 of the Act, of a tax adjustment note issued under subsection 232.02(2) of the Act to the person during the reporting period.

• Marginal note:Qualifying small investment plan

  (2) For the purposes of this Part, an investment plan (other than a distributed investment plan) is a qualifying small investment plan for a particular fiscal year of the investment plan where

  • (a) if, in the absence of section 57, the particular fiscal year is the first fiscal year of the investment plan, the amount determined by the following formula for each reporting period of the investment plan included in the particular fiscal year is equal to or less than $10,000:

    A × (365/B)

    where

    A

    is the unrecoverable tax amount for the reporting period, and

    B

    is the number of days in the reporting period; and

  • (b) in any other case, the amount determined by the following formula is equal to or less than $10,000:

    A × (365/B)

    where

    A

    is the total of all amounts, each of which is an unrecoverable tax amount for a reporting period of the investment plan included in the fiscal year of the investment plan (in this paragraph referred to as the “preceding fiscal year”) that precedes the particular fiscal year, and

    B

    is the number of days in the preceding fiscal year.

8 [Repealed, SOR/2019-59, s. 16]

Marginal note:Prescribed financial institution — paragraph 225.2(1)(b) of Act

9 Subject to sections 10 to 15 and for the purpose of paragraph 225.2(1)(b) of the Act, a financial institution is a prescribed financial institution throughout a reporting period in a particular fiscal year that ends in a taxation year of the financial institution if the financial institution

• (a) has, at any time in the taxation year, a permanent establishment in a participating province and has, at any time in the taxation year, a permanent establishment in any other province; or

• (b) is a qualifying partnership during the taxation year.

Marginal note:Exception — qualifying small investment plans

10 Section 9 does not apply in respect of a reporting period in a particular fiscal year of a financial institution that is a qualifying small investment plan for the particular fiscal year if

• (a) the financial institution was a qualifying small investment plan for the fiscal year of the financial institution that precedes the particular fiscal year and was not a selected listed financial institution throughout that preceding fiscal year;

• (b) the financial institution was a selected listed financial institution throughout the three fiscal years of the financial institution that precede the particular fiscal year; or

• (c) the particular fiscal year is the first fiscal year of the financial institution.

Marginal note:Exception — provincial investment plan

11 Section 9 does not apply in respect of a reporting period in a fiscal year that ends in a taxation year of a financial institution that is a non-stratified investment plan and that meets the following conditions throughout the fiscal year in respect of a particular province:

• (a) under the laws of Canada or a province, units of the financial institution are permitted to be sold or distributed in the particular province but are not permitted to be sold or distributed in any other province;

• (b) under the terms of the prospectus, registration statement, partnership agreement or other similar document for the financial institution, or under the laws of Canada or a province, the conditions for a person owning or acquiring units of the financial institution include

  • (i) that the person be resident in the particular province when the units are acquired, and

  • (ii) that the units are required to be sold, transferred or redeemed within a reasonable time after the person ceases to be resident in the particular province; and

• (c) the financial institution’s percentage for the particular province and for the taxation year in which the preceding fiscal year ends, or the percentage that would be the financial institution’s percentage for the particular province and for that taxation year if the particular province were a participating province, is 90% or more.