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

Marginal note:Rule of interpretation

17 Unless a contrary intention appears, words and expressions used in this Part have the same meanings as in Parts IV and XXVI of the Income Tax Regulations.

Attribution Point Election

Marginal note:Election — series

• 18 (1) A stratified investment plan that is a selected listed financial institution may make an election in respect of a series of the investment plan to have attribution points for the purposes of this Part for the series that are quarterly, monthly, weekly or daily, and that election is to be effective from the first day of a fiscal year of the investment plan.

• Marginal note:Election — investment plan

  (2) An investment plan (other than a stratified investment plan) that is a selected listed financial institution may make an election in respect of the investment plan to have attribution points for the purposes of this Part for the investment plan that are quarterly, monthly, weekly or daily, and that election is to be effective from the first day of a fiscal year of the investment plan.

• Marginal note:Effect of election

  (3) For the purposes of this Part, and despite the definition attribution point in subsection 16(1), if an election made under subsection (1) in respect of a series of an investment plan, or an election under subsection (2) in respect of an investment plan, is in effect throughout a fiscal year of the investment plan,attribution point in respect of the series or in respect of the investment plan, as the case may be, and for the taxation year in which the fiscal year ends means

  • (a) if the election specifies that attribution points are to be quarterly, the last business day in each of March, June and September of the particular calendar year in which the fiscal year ends and December of the preceding calendar year, or any four days of the particular calendar year, each of which is in a different fiscal quarter in the fiscal year, that the Minister may allow on application by the investment plan;

  • (b) if the election specifies that attribution points are to be monthly, each of the last business day of each month, or any other day of each month that the Minister may allow on application by the investment plan, in the 12-month period ending on September 30 of the calendar year in which the fiscal year ends;

  • (c) if the election specifies that the attribution points are to be weekly, each of the last business day of each week, or any other day of each week that the Minister may allow on application by the investment plan, in the 12-month period ending on September 30 of the calendar year in which the fiscal year ends; and

  • (d) if the election specifies that the attribution points are to be daily, each business day in the 12-month period ending on September 30 of the calendar year in which the fiscal year ends.

• Marginal note:Restriction

  (4) An election made under subsection (1) in respect of a series of an investment plan is not to become effective if, on the day on which the election is to come into effect, an election under subsection 49(1) or section 64 in respect of the series is in effect.

• Marginal note:Restriction

  (5) An election made under subsection (2) in respect of an investment plan is not to become effective if, on the day on which the election is to come into effect, an election under subsection 49(2) or section 61 in respect of the investment plan is in effect.

• Marginal note:Form of election

  (6) An election made under subsection (1) or (2) by an investment plan is to

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

  • (b) set out the first fiscal year of the investment plan during which the election is to be in effect; and

  • (c) specify whether the attribution points in respect of the series or investment plan are to be quarterly, monthly, weekly or daily.

• Marginal note:Cessation

  (7) An election made under subsection (1) or (2) by a person that is an investment plan ceases to have effect on the earlier of

  • (a) the first day of the fiscal year of the person in which the person ceases to be an investment plan or a selected listed financial institution, and

  • (b) the day on which a revocation of the election becomes effective.

• Marginal note:Revocation

  (8) An investment plan that has made an election under subsection (1) or (2) may, in prescribed form containing prescribed information, revoke the election, effective on the first day of a fiscal year of the investment plan that begins at least three years after the election became effective.

• Marginal note:Restriction

  (9) If a particular election made under subsection (1) or (2) ceases to have effect on a particular day, any subsequent election under subsection (1) or (2) is not a valid election unless the first day of the fiscal year set out in the subsequent election is at least three years after the particular day.

Determination of the Attribution Percentage

Marginal note:Basic rules

• 19 (1) For the purposes of these Regulations, the description of C in subsection 225.2(2) of the Act and the description of D in subparagraph 237(5)(b)(ii) of the Act, a financial institution’s percentage for any participating province and for a particular period is determined in accordance with this Part.

• Marginal note:Basic rules — real-time

  (2) For the purposes of these Regulations and the description of A₃ in subsection 225.2(2) of the Act, as adapted by subsection 48(1) or (2), a financial institution’s percentage for any participating province as of a particular day, or a financial institution’s percentage for any series and for any participating province as of a particular day, as the case may require, is determined in accordance with this Part.

• Marginal note:Basic rules — series

  (3) For the purposes of these Regulations and the description of A₆ in subsection 225.2(2) of the Act, as adapted by subsection 48(1), a financial institution’s percentage for any series, for any participating province and for a particular period is determined in accordance with this Part.

Marginal note:Member of partnership

20 For the purposes of this Part, if a selected listed financial institution is a member of a partnership during a particular period, the following rules apply:

• (a) the financial institution’s gross revenue for the particular period is not to include any portion of the total gross revenue of the partnership; and

• (b) the salaries and wages paid in the particular period by the financial institution is not to include any portion of the salaries and wages paid to employees of the partnership.

Marginal note:Central paymaster

• 21 (1) For the purposes of this Part, if an individual is employed by a person (referred to in this section as the “employer”) and performs a service in a particular province for the benefit of or on behalf of a person (referred to in this section as the “labour recipient”) that is not the employer, an amount that may reasonably be regarded as equal to the amount of salary or wages (referred to in this section as the “particular salary”) earned by the individual for the service is deemed to be salary paid by the labour recipient to an employee of the labour recipient in the particular period of the labour recipient in which the particular salary is paid if

  • (a) at the time the service is performed,

    • (i) the labour recipient and the employer do not deal at arm’s length, and

    • (ii) the labour recipient has a permanent establishment in the particular province;

  • (b) the service

    • (i) is performed by the individual in the ordinary course of the individual’s employment by the employer,

    • (ii) is performed for the benefit of or on behalf of the labour recipient in the ordinary course of a business carried on by the labour recipient, and

    • (iii) is of a type that could reasonably be expected to be performed by employees of the labour recipient in the ordinary course of the business referred to in subparagraph (ii); and

  • (c) the amount is not otherwise included in the aggregate, determined for the purposes of this Part, of the salaries and wages paid by the labour recipient.

• Marginal note:Deemed payments — permanent establishment

  (2) For the purposes of this Part, an amount deemed under subsection (1) to be salary paid by a labour recipient to an employee of the labour recipient for a service performed in a particular province is deemed to have been paid,

  • (a) if the service was performed at one or more permanent establishments of the labour recipient in the particular province, to an employee of the permanent establishment or establishments; or

  • (b) in any other case, to an employee of any other permanent establishment (as is reasonably determined in the circumstances) of the labour recipient in the particular province.

• Marginal note:Particular salaries paid not included

  (3) For the determination under this Part of the amount of salaries and wages paid in a particular period by an employer, the total of all amounts each of which is a particular salary paid by the employer in the particular period is to be deducted.

• Marginal note:Arm’s length transactions

  (4) Despite subparagraph (1)(a)(i), this section applies to a labour recipient and an employer that deal at arm’s length if the Minister determines that the labour recipient and the employer have entered into an arrangement the purpose of which is to reduce, through the provision of services as described in subsection (1), the net tax for a reporting period of the employer, the net tax for a reporting period of the labour recipient or an amount required to be paid to the Receiver General under section 237 of the Act.

General Rules for Individuals

Marginal note:No permanent establishment in participating province

• 22 (1) Subject to this Part, if, in a particular period, a selected listed financial institution that is an individual does not have a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is nil.

• Marginal note:Determination of percentage

  (2) Subject to this Part, if, in a particular period, a selected listed financial institution that is an individual has a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is 1/2 of the total of

  • (a) the percentage that its gross revenue for the particular period that is reasonably attributable to its permanent establishments in that province is of its total gross revenue for the particular period, and

  • (b) the percentage that the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in that province is of the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in Canada.

• Marginal note:Special rules for attribution of gross revenue

  (3) For the purposes of applying subsection (2) and the definition total gross revenue in subsection 16(1) in relation to a financial institution that is an individual, gross revenue for a particular period of the financial institution is reasonably attributable to a particular permanent establishment if that gross revenue would be attributable to that permanent establishment under the rules set out in subsection 2603(4) of the Income Tax Regulations, if the financial institution were a taxpayer under the Income Tax Act and if the references in that subsection to a year and to gross revenue for the year were read as references to the particular period and to the gross revenue for the particular period, respectively.

• Marginal note:Fees

  (4) For the purpose of subsection (2), if a financial institution pays a fee to another person under an agreement under which that other person or employees of that other person perform services for the financial institution that would normally be performed by the financial institution’s employees, the fee is deemed to be salary paid by the financial institution and the part of the fee that may reasonably be regarded as payment in respect of services rendered at a permanent establishment of the financial institution is deemed to be salary paid to an employee of the permanent establishment.

• Marginal note:Commissions

  (5) For the purpose of subsection (4), a fee paid by a financial institution does not include a commission paid to a person that is not an employee of the financial institution.

General Rules for Corporations

Marginal note:No permanent establishment in participating province

• 23 (1) Subject to this Part, if, in a particular period, a selected listed financial institution that is a corporation does not have a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is nil.

• Marginal note:Determination of percentage

  (2) Subject to this Part, if, in a particular period, a selected listed financial institution that is a corporation has a permanent establishment in a participating province, the financial institution’s percentage for that province and for the particular period is

  • (a) except where paragraph (b) or (c) applies, 1/2 of the total of

    • (i) the percentage that its gross revenue for the particular period reasonably attributable to its permanent establishments in that province is of its total gross revenue for the particular period, and

    • (ii) the percentage that the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in that province is of the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in Canada;

  • (b) if its total gross revenue for the particular period is nil, the percentage that the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in the participating province is of the total of all salaries and wages paid by the financial institution in the particular period to employees of its permanent establishments in Canada; and

  • (c) if the total of all salaries and wages paid in the particular period by the financial institution to employees of its permanent establishments in Canada is nil, the percentage that its gross revenue for the particular period reasonably attributable to its permanent establishments in that province is of its total gross revenue for the particular period.

• Marginal note:Special rules for attribution of gross revenue

  (3) For the purposes of applying subsection (2) and the definition total gross revenue in subsection 16(1) in relation to a financial institution that is not an individual, gross revenue for a particular period of the financial institution is reasonably attributable to a particular permanent establishment if that gross revenue would be attributable to that permanent establishment under the rules set out in subsections 402(4) and (4.1) and 413(1) of the Income Tax Regulations, if the financial institution were a taxpayer under the Income Tax Act and if the references in those subsections to a taxation year and to a year were read as references to the particular period.

• Marginal note:Interest on various instruments

  (4) For the purpose of subsection (2), gross revenue does not include interest on bonds, debentures or mortgages, dividends on shares of capital stock, or rentals or royalties from property that is not used in connection with the principal business operations of the financial institution.

• Marginal note:Fees

  (5) For the purpose of subsection (2), if a financial institution pays a fee to another person under an agreement under which that other person or employees of that other person perform services for the financial institution that would normally be performed by the financial institution’s employees, the fee is deemed to be salary paid by the financial institution and the part of the fee that may reasonably be regarded as payment in respect of services rendered at a permanent establishment of the financial institution is deemed to be salary paid to an employee of that permanent establishment.

• Marginal note:Commissions

  (6) For the purpose of subsection (5), a fee paid by a financial institution does not include a commission paid to a person that is not an employee of the financial institution.