ARCHIVED — Vol. 147, No. 7 — March 27, 2013

Registration

SOR/2013-44 March 8, 2013

EXCISE TAX ACT

Regulations Amending Various GST/HST Regulations (Prince Edward Island)

P.C. 2013-285 March 7, 2013

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 236.01(4) (see footnote a) and sections 277 (see footnote b) and 277.1 (see footnote c) of the Excise Tax Act (see footnote d), makes the annexed Regulations Amending Various GST/HST Regulations (Prince Edward Island).

REGULATIONS AMENDING VARIOUS GST/HST REGULATIONS (PRINCE EDWARD ISLAND)

PART 1

GAMES OF CHANCE (GST/HST) REGULATIONS

1. (1) Clause (i)(A) of the description of E3 in paragraph (a) of the description of E in subsection 7(7) of the Games of Chance (GST/HST) Regulations (see footnote 1) is amended by adding the following after subclause (III):

  • (IV) Prince Edward Island, 8.25%, and

(2) Subclause (i)(A)(IV) of the description of E3 in paragraph (a) of the description of E in subsection 7(7) of the Regulations is replaced by the following:

  • (IV) Prince Edward Island, the percentage referred to in paragraph 2(c.1) of the Automobile Operating Expense Benefit (GST/HST) Regulations, and

PART 2

TAXES, DUTIES AND FEES (GST/HST) REGULATIONS

2. Paragraph (d) of the definition “general sales tax rate” in subsection 2(1) of the Taxes, Duties and Fees (GST/HST) Regulations (see footnote 2) is repealed.

PART 3

PUBLIC SERVICE BODY REBATE (GST/HST) REGULATIONS

3. (1) Paragraph 5(a) of the Public Service Body Rebate (GST/HST) Regulations (see footnote 3) is amended by adding the following before subparagraph (v):

  • (iv.1) Prince Edward Island, and
(2) Subparagraph 5(c)(i) of the Regulations is amended by adding the following before clause (E):
  • (D.1) Prince Edward Island, 35%, and

4. (1) Clause (i)(B) of the description of A in paragraph 5.4(2)(b) of the Regulations is replaced by the following:

  • (B) a selected public service body described in paragraph (f) or (g) of the definition “selected public service body” in subsection 259(1) of the Act and the participating province is Prince Edward Island or Newfoundland and Labrador, and

(2) The portion of clause (A) of the description of F in subparagraph 5.4(2)(e)(ii) of the Regulations before subclause (I) is replaced by the following:

  • (A) if the participating province is Ontario, the extent (expressed as a percentage) to which the person intended, at the relevant time, to consume, use or supply the property or service in the course of activities engaged in by the person

(3) Subsection 5.4(2) of the Regulations is amended by adding the following at the end of that subsection:

  • (k) in the case of a person resident in Prince Edward Island, the total of all amounts, each of which is determined — in relation to a provincial qualifying amount in respect of the property or service for the claim period — by the formula
  • A × B × C
  • where
  • A is 35%,
  • B is the provincial qualifying amount, and
  • C is the extent (expressed as a percentage) to which the person intended, at the relevant time, to consume, use or supply the property or service, in the course of activities, other than activities in respect of which any of paragraphs (c) to (h) applies, engaged in by the person in Prince Edward Island.

PART 4

STREAMLINED ACCOUNTING (GST/HST) REGULATIONS

5. (1) Subparagraph 15(5)(a)(i) of the Streamlined Accounting (GST/HST) Regulations (see footnote 4) is amended by adding the following before clause (D):

  • (C.1) 5.3%, if the supply is made in Prince Edward Island, and

(2) Subparagraph 15(5)(a)(ii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 4.2%, if the supply is made in Prince Edward Island, and

(3) Paragraph 15(5)(a) of the Regulations is amended by adding the following before subparagraph (iv):

  • (iii.1) if the registrant makes the supply through a permanent establishment of the registrant in Prince Edward Island,
    • (A) 3.9%, if the supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (B) 5.6%, if the supply is made in Nova Scotia,
    • (C) 4.7%, if the supply is made in Prince Edward Island, and
    • (D) 0%, if the supply is made in a nonparticipating province, and

(4) Subparagraph 15(5)(a)(iv) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 9.6%, if the supply is made in Prince Edward Island, and

(5) Subparagraph 15(5)(b)(i) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 9.6%, if the supply is made in Prince Edward Island, and

(6) Subparagraph 15(5)(b)(ii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 9.2%, if the supply is made in Prince Edward Island, and

(7) Paragraph 15(5)(b) of the Regulations is amended by adding the following before subparagraph (iv):

  • (iii.1) if the registrant makes the supply through a permanent establishment of the registrant in Prince Edward Island,
    • (A) 8.6%, if the supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (B) 10.2%, if the supply is made in Nova Scotia,
    • (C) 9.4%, if the supply is made in Prince Edward Island, and
    • (D) 1.6%, if the supply is made in a nonparticipating province, and

(8) Subparagraph 15(5)(b)(iv) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.3%, if the supply is made in Prince Edward Island, and

6. Subsection 17(1) of the Regulations is amended by adding the following at the end of the description of C:

  • (f) an amount equal to 3.4% of the portion of the registrant’s net specified supplies for the particular reporting period that is attributable to supplies which are made through a permanent establishment of the registrant in Prince Edward Island and to which the quick-method rate of 0% applies; and

7. (1) Subparagraph 19(3)(a)(i) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 10.6%, if the particular supply is made in Prince Edward Island, and

(2) Subparagraph 19(3)(a)(ii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 9.2%, if the particular supply is made in Prince Edward Island, and

(3) Subparagraph 19(3)(a)(iii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 9.6%, if the particular supply is made in Prince Edward Island, and

(4) Paragraph 19(3)(a) of the Regulations is amended by adding the following before subparagraph (v):

  • (iv.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Prince Edward Island,
    • (A) 8%, if the particular supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (B) 9.6%, if the particular supply is made in Nova Scotia,
    • (C) 8.8%, if the particular supply is made in Prince Edward Island, and
    • (D) 1%, if the particular supply is made in a non-participating province, and

(5) The portion of subparagraph 19(3)(a)(v) of the Regulations before clause (A) is replaced by the following:

  • (v) if subparagraphs (i) to (iv.1) do not apply,

(6) Subparagraph 19(3)(a)(v) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.2%, if the particular supply is made in Prince Edward Island, and

(7) Subparagraph 19(3)(b)(i) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.8%, if the particular supply is made in Prince Edward Island, and

(8) Subparagraph 19(3)(b)(ii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.2%, if the particular supply is made in Prince Edward Island, and

(9) Subparagraph 19(3)(b)(iii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 10.1%, if the particular supply is made in Prince Edward Island, and

(10) Paragraph 19(3)(b) of the Regulations is amended by adding the following before subparagraph (v):

  • (iv.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Prince Edward Island,
    • (A) 9.1%, if the particular supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (B) 10.7%, if the particular supply is made in Nova Scotia,
    • (C) 9.9%, if the particular supply is made in Prince Edward Island, and
    • (D) 2.1%, if the particular supply is made in a non-participating province, and

(11) The portion of subparagraph 19(3)(b)(v) of the Regulations before clause (A) is replaced by the following:

  • (v) if subparagraphs (i) to (iv.1) do not apply,

(12) Subparagraph 19(3)(b)(v) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.9%, if the particular supply is made in Prince Edward Island, and

(13) Clause 19(3)(c)(i)(A) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 11%, if the particular supply is made in Prince Edward Island, and

(14) Clause 19(3)(c)(i)(B) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 10.4%, if the particular supply is made in Prince Edward Island, and

(15) Clause 19(3)(c)(i)(C) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 8.6%, if the particular supply is made in Prince Edward Island, and

(16) Subparagraph 19(3)(c)(i) of the Regulations is amended by adding the following before clause (E):

  • (D.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Prince Edward Island,
    • (I) 7.4%, if the particular supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (II) 9%, if the particular supply is made in Nova Scotia,
    • (III) 8.2%, if the particular supply is made in Prince Edward Island, and
    • (IV) 0.3%, if the particular supply is made in a non-participating province, and

(17) The portion of clause 19(3)(c)(i)(E) of the Regulations before subclause (I) is replaced by the following:

  • (E) if clauses (A) to (D.1) do not apply,

(18) Clause 19(3)(c)(i)(E) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 11.7%, if the particular supply is made in Prince Edward Island, and

(19) Clause 19(3)(c)(ii)(A) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 11.5%, if the particular supply is made in Prince Edward Island, and

(20) Clause 19(3)(c)(ii)(B) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 11.2%, if the particular supply is made in Prince Edward Island, and

(21) Clause 19(3)(c)(ii)(C) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 10.1%, if the particular supply is made in Prince Edward Island, and

(22) Subparagraph 19(3)(c)(ii) of the Regulations is amended by adding the following before clause (E):

  • (D.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Prince Edward Island,
    • (I) 9.1%, if the particular supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (II) 10.7%, if the particular supply is made in Nova Scotia,
    • (III) 9.9%, if the particular supply is made in Prince Edward Island, and
    • (IV) 2.2%, if the particular supply is made in a non-participating province, and

(23) The portion of clause 19(3)(c)(ii)(E) of the Regulations before subclause (I) is replaced by the following:

  • (E) if clauses (A) to (D.1) do not apply,

(24) Clause 19(3)(c)(ii)(E) of the Regulations is amended by adding the following before subclause (IV):

  • (III.1) 11.9%, if the particular supply is made in Prince Edward Island, and

(25) Subparagraph 19(3)(d)(i) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.8%, if the particular supply is made in Prince Edward Island, and

(26) Subparagraph 19(3)(d)(ii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.6%, if the particular supply is made in Prince Edward Island, and

(27) Subparagraph 19(3)(d)(iii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 9.9%, if the particular supply is made in Prince Edward Island, and

(28) Paragraph 19(3)(d) of the Regulations is amended by adding the following before subparagraph (v):

  • (iv.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Prince Edward Island,
    • (A) 8.8%, if the particular supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (B) 10.4%, if the particular supply is made in Nova Scotia,
    • (C) 9.6%, if the particular supply is made in Prince Edward Island, and
    • (D) 1.9%, if the particular supply is made in a non-participating province, and

(29) The portion of subparagraph 19(3)(d)(v) of the Regulations before clause (A) is replaced by the following:

  • (v) if subparagraphs (i) to (iv.1) do not apply,

(30) Subparagraph 19(3)(d)(v) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 12%, if the particular supply is made in Prince Edward Island, and

(31) Subparagraph 19(3)(e)(i) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.9%, if the particular supply is made in Prince Edward Island, and

(32) Subparagraph 19(3)(e)(ii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.3%, if the particular supply is made in Prince Edward Island, and

(33) Subparagraph 19(3)(e)(iii) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 11.5%, if the particular supply is made in Prince Edward Island, and

(34) Paragraph 19(3)(e) of the Regulations is amended by adding the following before subparagraph (iv):

  • (iii.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Prince Edward Island,
    • (A) 9.4%, if the particular supply is made in Ontario, New Brunswick or Newfoundland and Labrador,
    • (B) 11%, if the particular supply is made in Nova Scotia,
    • (C) 10.2%, if the particular supply is made in Prince Edward Island, and
    • (D) 2.5%, if the particular supply is made in a non-participating province,

(35) Subparagraph 19(3)(e)(iv) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 10.5%, if the particular supply is made in Prince Edward Island, and

(36) Subparagraph 19(3)(e)(v) of the Regulations is amended by adding the following before clause (D):

  • (C.1) 12.2%, if the particular supply is made in Prince Edward Island, and

PART 5

AUTOMOBILE OPERATING EXPENSE BENEFIT (GST/HST) REGULATIONS

8. Section 2 of the Automobile Operating Expense Benefit (GST/HST) Regulations (see footnote 5) is amended by adding the following before paragraph (d):

  • (c.1) 10% if
    • (i) the individual is an employee of the registrant and is required under subsection 6(1) of the Income Tax Act to so include the amount and the last establishment of the registrant at which the individual ordinarily worked, or to which the individual ordinarily reported, in the year in relation to that office or employment is located in Prince Edward Island, or
    • (ii) the individual is a shareholder of the registrant, is required under subsection 15(1) of the Income Tax Act to so include the amount and the individual is resident in Prince Edward Island at the end of the year; and

PART 6

DEDUCTION FOR PROVINCIAL REBATE (GST/HST) REGULATIONS

9. (1) The definition “provincial schedule” in section 1 of the Deduction for Provincial Rebate (GST/HST) Regulations (see footnote 6) is amended by adding the following before paragraph (e):

(d.1) in the case of Prince Edward Island, Schedule 4.1; and

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

  • “qualifying heating oil”
    « huile de chauffage admissible »
  • “qualifying heating oil” means fuel (other than heavy fuel oil or fuel sold as fuel for use in internal combustion engines) that is suitable for use as heating oil and is marketed or sold as fuel for use as heating oil for heating homes, buildings or similar structures.

10. The Regulations are amended by adding, before Schedule 5, the Schedule 4.1 set out in the schedule to these Regulations.

PART 7

RETURNABLE BEVERAGE CONTAINER (GST/HST) REGULATIONS

11. Paragraph 1(b) of the Returnable Beverage Container (GST/HST) Regulations (see footnote 7) is replaced by the following:

  • (b) the Beverage Containers Act, R.S.N.B. 2011, c. 121; and

12. Section 1 of the Regulations, as amended by section 11, is replaced by the following:

Prescribed Acts

1. For the purposes of paragraph 226(2)(b) of the Excise Tax Act, the following Acts are prescribed:

  • (a) the Environment Act, S.N.S. 1994-95, c. 1;
  • (b) the Beverage Containers Act, R.S.N.B. 2011, c. 121;
  • (c) the Beverage Containers Act, R.S.P.E.I. 1988, c. B-2.1; and
  • (d) the Environmental Protection Act, S.N.L. 2002, c. E-14.2.

13. Sections 2 and 3 of the Regulations are repealed.

PART 8

NEW HARMONIZED VALUE-ADDED TAX SYSTEM REGULATIONS

14. Section 4 of the New Harmonized Value-added Tax System Regulations (see footnote 8) is amended by adding the following after subsection (2):

Transition — Prince Edward Island

(3) For the purposes of applying the provisions of Part 3.1 in relation to the application of this Part between November 8, 2012 and April 1, 2013, the following rules apply:

  • (a) Prince Edward Island is deemed to be a participating province; and
  • (b) the tax rate for Prince Edward Island is deemed to be 9%.

15. (1) Subsection 26(3) of the Regulations is replaced by the following:

Renewal of agreement

(3) Subject to subsections (4) to (6), for the purposes of this section, if continuous possession or use of railway rolling stock is given by a supplier to a recipient throughout a period under two or more successive leases, licenses or similar arrangements entered into between the supplier and the recipient, the rolling stock is deemed to have been delivered or made available to the recipient under each of those arrangements at the location at which it is delivered or made available to the recipient under the first of those arrangements.

(2) Section 26 of the Regulations is amended by adding the following after subsection (5):

Agreements entered into before April 1, 2013

(6) If a supply of railway rolling stock otherwise than by way of sale is made under a particular agreement that is in effect on April 1, 2013 and, under the particular agreement, the rolling stock was delivered or made available to the recipient in Prince Edward Island before that day,

  • (a) the rolling stock is deemed to have been delivered or made available to the recipient under the particular agreement outside the participating provinces; and
  • (b) if the recipient retains continuous possession or use of the rolling stock under an agreement (in this paragraph referred to as the “renewal agreement”) with the supplier that immediately succeeds the particular agreement, subsection (3) applies as if the renewal agreement were the first arrangement between the supplier and the recipient for the supply of the rolling stock.

16. The Regulations are amended by adding the following after section 33.2:

PART 1.1

PARTICIPATING PROVINCES AND APPLICABLE TAX RATES

Prince Edward Island — harmonization date

33.3 (1) For the purposes of paragraph (c) of the definition “harmonization date” in subsection 123(1) of the Act, the prescribed date in the case of Prince Edward Island is April 1, 2013.

Prince Edward Island — participating province

(2) For the purposes of paragraph (b) of the definition “participating province” in subsection 123(1) of the Act, Prince Edward Island is a prescribed province.

Prince Edward Island — tax rate

(3) For the purposes of paragraph (a) of the definition “tax rate” in subsection 123(1) of the Act, the prescribed rate for Prince Edward Island is 9%.

17. (1) Subsection 43(6) of the English version of the Regulations is replaced by the following:

Consideration due or paid before May 2010

(6) Subject to subsection (8), if an amount of consideration for a taxable supply of a service made in a specified province by a registrant to a person that is not a consumer of the service becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and any part of the amount of consideration is for a part of the service that is not performed before July 1, 2010, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required to pay, in accordance with subsection (9), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

(2) Subsections 43(10) to (12) of the French version of the Regulations are replaced by the following:

Services exécutés en presque totalité avant juillet 2010

(10) Malgré les paragraphes (4) et (6), la taxe prévue au paragraphe 165(2) de la Loi n’est pas payable relativement à la contrepartie de la fourniture taxable d’un service, sauf un service de transport de marchandises, un service de transport de passagers et un service auquel s’applique l’article 45, effectuée dans une province déterminée si la totalité ou la presque totalité du service est exécutée avant juillet 2010.

Services exécutés en presque totalité avant juillet 2010

(11) Malgré les paragraphes (5) et (7), la taxe prévue aux paragraphes 218.1(1) ou 220.08(1) de la Loi n’est pas payable relativement à la contrepartie de la fourniture d’un service, sauf un service de transport de marchandises, un service de transport de passagers et un service auquel s’applique l’article 45, effectuée au profit d’une personne résidant dans une province déterminée, mais non en Nouvelle-Écosse, au Nouveau-Brunswick ou à Terre-Neuve-et-Labrador, si la totalité ou la presque totalité du service est exécutée avant juillet 2010.

Services de transport de passagers débutant avant juillet 2010

(12) Malgré les paragraphes (4) et (6), la taxe prévue au paragraphe 165(2) de la Loi n’est pas payable relativement à la contrepartie de la fourniture taxable, effectuée dans une province déterminée, d’un service de transport de passagers ou d’un service de transport des bagages d’un particulier dans le cadre d’un service de transport de passagers si le service de transport de passagers fait partie d’un voyage continu qui débute avant juillet 2010.

18. Subsection 48(4) of the English version of the Regulations is replaced by the following:

Consideration due or paid before May 2010

(4) Subject to subsection (5), if an amount of consideration for a taxable supply of a membership (other than a membership for the lifetime of an individual) in a club, an organization or an association or an admission in respect of a place of amusement, a seminar, an activity or an event made in a specified province by a registrant to a person that is not a consumer of the membership or admission becomes due, or is paid without having become due, after October 14, 2009 and before May 1, 2010 and any part of the amount of consideration is for a part of the period of membership or admission that was not before July 1, 2010, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on July 1, 2010 and not to have been paid before that day and the person is required to pay, in accordance with subsection (6), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

19. Subsection 49(2) of the English version of the Regulations is replaced by the following:

Validity period before July 2010

(2) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a passenger transportation pass made in a specified province to the extent that the consideration is attributable to any part of the validity period of the passenger transportation pass that is before July 1, 2010.

20. The Regulations are amended by adding the following before the headings before section 59:

PART 3.1

PRINCE EDWARD ISLAND GENERAL HST TRANSITIONAL RULES
DIVISION 1

INTERPRETATION

Definitions

58.2 (1) The following definitions apply in this Part.

  • “reciprocal taxation agreement”
    « accord de réciprocité fiscale »
  • “reciprocal taxation agreement” means an agreement referred to in section 32 of the Federal-Provincial Fiscal Arrangements Act.
  • “retail sales tax”
    « taxe de vente au détail »
  • “retail sales tax” means a general retail sales tax imposed under an Act of the legislature of Prince Edward Island at a percentage rate on property other than that which is specifically enumerated in that Act.

Conflict

(2) This Part applies despite any provision of the Act.

DIVISION 2

APPLICATION

Personal property and services

58.21 (1) Subject to Division 3, subsection 165(2) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to any supply of tangible personal property, intangible personal property or a service made in Prince Edward Island if all or part of the consideration for the supply becomes due or is paid, or is deemed to have become due or to have been paid, on or after April 1, 2013 and is not deemed to have become due or to have been paid before that day, except that tax is not payable under that subsection (otherwise than because of Division 3) in respect of any part of the consideration for the supply that becomes due or is paid before that day and is not deemed to have become due or to have been paid on or after that day.

Imported goods — section 212.1 of Act

(2) Subject to Division 3, section 212.1 of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that section apply to tangible personal property, a mobile home that is not affixed to land and a floating home, any of which is imported by a person resident in Prince Edward Island on or after April 1, 2013, and to such property that is imported by a person resident in Prince Edward Island before that day and that is, on or after that day, accounted for under subsection 32(1), paragraph 32(2)(a) or subsection 32(5) of the Customs Act or released in the circumstances set out in paragraph 32(2)(b) of that Act.

Imported goods — subsection 220.07(1) of Act

(3) Subject to Division 3, subsection 220.07(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to tangible personal property, a mobile home that is not affixed to land and a floating home, any of which is brought into Prince Edward Island from a place outside Canada on or after April 1, 2013, and to such property that is brought into Prince Edward Island from a place outside Canada before that day and that is, on or after that day, accounted for under subsection 32(1), paragraph 32(2)(a) or subsection 32(5) of the Customs Act or released in the circumstances set out in paragraph 32(2)(b) of that Act.

Tangible personal property brought into Prince Edward Island

(4) Subject to Division 3, subsections 220.05(1) and 220.06(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under those subsections apply to tangible personal property, a mobile home that is not affixed to land and a floating home, any of which is brought into Prince Edward Island on or after April 1, 2013, and to such property that is brought into Prince Edward Island before that day by a carrier if the property is delivered in Prince Edward Island to a consignee on or after that day.

Tangible personal property supplied outside Canada

(5) Subject to Division 3, subsection 218.1(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to any supply of tangible personal property made outside Canada to a person to which the property is delivered or made available, or physical possession of the property is transferred, in Prince Edward Island, if all or part of the consideration for the supply becomes due or is paid, or is deemed to have become due or to have been paid, on or after April 1, 2013 and is not deemed to have become due or to have been paid before that day, except that tax is not payable under that subsection (otherwise than because of Division 3) in respect of any part of the consideration for the supply that becomes due or is paid before that day and is not deemed to have become due or to have been paid on or after that day.

Consumption, use or supply in Prince Edward Island

(6) Subject to Division 3, subsections 218.1(1) and 220.08(1) of the Act and the other provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under those subsections apply to any supply of intangible personal property or a service acquired for consumption, use or supply in Prince Edward Island if all or part of the consideration for the supply becomes due or is paid, or is deemed to have become due or to have been paid, on or after April 1, 2013 and is not deemed to have become due or to have been paid before that day, except that, if the supply is made to a person resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador, tax is not payable under those subsections (otherwise than because of Division 3) in respect of any part of the consideration for the supply that becomes due or is paid before that day and is not deemed to have become due or to have been paid on or after that day.

DIVISION 3

TRANSITION

Net tax

58.22 (1) If a person collects, before April 1, 2013, a particular amount as or on account of tax (other than tax under subsection 165(1) of the Act) in respect of a supply, calculated on an amount of consideration for the supply that is deemed, under this Part, to have become due on April 1, 2013 and not to have been paid before that day, for the purpose of determining the net tax of the person under subsection 225(1) of the Act, the particular amount is deemed to have been collected by the person on April 1, 2013 and not to have been collected before that day.

Input tax credits and rebates

(2) If a person pays, before April 1, 2013, a particular amount as or on account of tax (other than tax under subsection 165(1) or section 218 of the Act) in respect of a supply, calculated on an amount of consideration for the supply that is deemed, under this Part, to have become due on April 1, 2013 and not to have been paid before that day, for the purpose of determining an input tax credit or rebate of the person under Part IX of the Act, the particular amount is deemed to have been paid by the person on April 1, 2013 and not to have been paid before that day.

Continuous supply

(3) For the purposes of this Part, if property or a service is delivered, performed or made available on a continuous basis by means of a wire, pipeline, satellite, other conduit or other telecommunications facility during a period that includes April 1, 2013 and for which the supplier issues an invoice and, because of the method of recording the delivery of the property or the provision of the service, the time at which the property is delivered, or the service is provided, cannot reasonably be determined, an equal part of the whole of the property delivered, or of the whole of the service provided, during the period is deemed to have been delivered or provided, as the case may be, on each day of the period.

Transfer of tangible personal property before April 2013

58.23 (1) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply by way of sale of tangible personal property made in Prince Edward Island to a person to the extent that

  • (a) the property is delivered to the person before April 1, 2013; or
  • (b) ownership of the property is transferred to the person before April 1, 2013.

Imported taxable supply

(2) No tax is payable under subsection 218.1(1) of the Act in respect of any consideration for an imported taxable supply (as defined in section 217 of the Act) of tangible personal property made to a person if

  • (a) the property is delivered or made available to the person in Prince Edward Island before April 1, 2013; or
  • (b) physical possession of the property is transferred to the person in Prince Edward Island before April 1, 2013.

Consideration due or paid after January 2013

(3) For the purpose of applying subsection 165(2) of the Act to a taxable supply by way of sale of tangible personal property made in Prince Edward Island, any consideration for the supply that becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, in respect of property that is not delivered to the recipient, and the ownership of which is not transferred to the recipient, before April 1, 2013, is deemed to have become due on April 1, 2013 and not to have been paid before that day.

Consideration due or paid after January 2013

(4) For the purpose of applying subsection 218.1(1) of the Act to a taxable supply by way of sale of tangible personal property made outside Canada to a person to which the property is delivered or made available, or physical possession of the property is transferred, in Prince Edward Island, any consideration for the supply that becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, in respect of property that is not delivered or made available to the person, or the physical possession of which is not transferred to the person, as the case may be, before April 1, 2013, is deemed to have become due on April 1, 2013 and not to have been paid before that day.

Consideration due or paid before February 2013

(5) Subject to subsection (7), if an amount of consideration for a taxable supply by way of sale of tangible personal property made in Prince Edward Island by a registrant to a person that is not a consumer of the tangible personal property becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and neither ownership nor possession of the tangible personal property is transferred to the person before April 1, 2013, for the purposes of applying subsection 165(2) of the Act to the supply, that amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required to pay, in accordance with subsection (8), the tax under subsection 165(2) of the Act payable in respect of the supply on that amount of consideration.

Consideration due or paid before February 2013

(6) Subject to subsection (7), if an amount of consideration for a taxable supply by way of sale of tangible personal property made outside Canada to a person that is not a consumer of the tangible personal property becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and the tangible personal property is delivered or made available, or physical possession of the property is transferred, in Prince Edward Island to the person on or after April 1, 2013, for the purposes of applying subsection 218.1(1) of the Act to the supply, that amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required, despite subsection 218.1(2) of the Act, to pay, in accordance with subsection (8), the tax under subsection 218.1(1) of the Act payable in respect of the supply on that amount of consideration.

Exception — subsections (5) and (6)

(7) Subsections (5) and (6) do not apply in respect of a supply by way of sale of tangible personal property made to a person if

  • (a) the property is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;
  • (b) the person
    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the property, the total amount of tax under subsection 165(2) or 218.1(1) of the Act that would otherwise be payable by the person in respect of the supply, and
    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and
  • (c) the person is neither
    • (i) a registrant that is a selected listed financial institution, nor
    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

Payment of tax — subsections (5) and (6)

(8) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (5) or (6),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes April 1, 2013 is required to be filed on or before a particular day that is before August 1, 2013, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and
  • (b) in any other case, section 219 of the Act does not apply in respect of the tax and the person shall, before August 1, 2013, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

Exception — subscriptions

(9) Despite subsections (3) and (5), no tax is payable under subsection 165(2) of the Act in respect of any consideration paid before April 1, 2013 for a taxable supply made in Prince Edward Island of a subscription for newspapers, magazines or other publications published periodically.

Exercise of option to purchase

(10) No tax under subsection 165(2) of the Act is payable in respect of a taxable supply by way of sale of tangible personal property made in Prince Edward Island to a person if

  • (a) the person was the recipient of another supply of the tangible personal property by way of lease, licence or similar arrangement;
  • (b) the taxable supply is made as a consequence of the person exercising, after April 1, 2013, an option to purchase the tangible personal property provided for under the arrangement referred to in paragraph (a); and
  • (c) retail sales tax of Prince Edward Island in respect of the sale of the tangible personal property became payable before April 1, 2013 or would have become payable before that day if the tangible personal property or the person, as the case may be, were not exempt from that tax.

Application

(11) This section does not apply to a supply to which section 58.28 or 58.37 applies.

Lease or licence periods before April 2013

58.24 (1) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of property by way of lease, licence or similar arrangement made in Prince Edward Island to the extent that the consideration is a rent, royalty or similar payment attributable to a period before April 1, 2013.

Lease or licence periods before April 2013

(2) No tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of any consideration for a supply of property by way of lease, licence or similar arrangement made outside Prince Edward Island to the extent that the consideration is a rent, royalty or similar payment attributable to a period before April 1, 2013, if the supply is made to

  • (a) a person resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador; or
  • (b) a person to which the property is delivered or made available, or physical possession of the property is transferred, in Prince Edward Island.

Rent and royalties due or paid after January 2013

(3) If a taxable supply of property by way of lease, licence or similar arrangement is made in Prince Edward Island and an amount of consideration for the supply becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, to the extent that the amount of consideration is a rent, royalty or similar payment attributable to a period on or after April 1, 2013, that amount of consideration is deemed, for the purpose of applying subsection 165(2) of the Act to the supply, to have become due on April 1, 2013 and not to have been paid before that day.

Rent and royalties due or paid after January 2013

(4) If a taxable supply of property by way of lease, licence or similar arrangement is made outside Prince Edward Island to a person resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador, or to a person to which the property is delivered or made available, or physical possession of the property is transferred, in Prince Edward Island, and an amount of consideration for the supply becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, to the extent that the amount of consideration is a rent, royalty or similar payment attributable to a period on or after April 1, 2013, that amount of consideration is deemed, for the purpose of applying subsection 218.1(1) or 220.08(1) of the Act, to have become due on April 1, 2013 and not to have been paid before that day.

Rent and royalties due or paid before February 2013

(5) Subject to subsection (7), if an amount of consideration for a taxable supply of property by way of lease, licence or similar arrangement made in Prince Edward Island by a registrant to a person that is not a consumer of the property becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and any part of the amount of consideration is a rent, royalty or similar payment attributable to a period on or after April 1, 2013, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required to pay, in accordance with subsection (8), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

Rent and royalties due or paid before February 2013

(6) Subject to subsection (7), if an amount of consideration for a taxable supply of property by way of lease, licence or similar arrangement made outside Prince Edward Island to a person that is not a consumer of the property and that is resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador, or to a person that is not a consumer of the property and to which the property is delivered or made available in Prince Edward Island or to which physical possession of the property is transferred in Prince Edward Island, becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and any part of the amount of consideration is a rent, royalty or similar payment attributable to a period on or after April 1, 2013, for the purposes of applying subsection 218.1(1) or 220.08(1) of the Act to the supply, that part of the amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required, despite subsection 218.1(2) and section 220.04 of the Act, to pay, in accordance with subsection (8), the tax under subsection 218.1(1) or 220.08(1) of the Act, as the case may be, payable in respect of the supply, in the absence of section 1 of Part II of Schedule X to the Act, on that part of the amount of consideration.

Exception — subsections (5) and (6)

(7) Subsections (5) and (6) do not apply in respect of a supply of property by way of lease, licence or similar arrangement made to a person if

  • (a) the property is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;
  • (b) the person
    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the property, the total amount of tax under subsection 165(2), 218.1(1) or 220.08(1) of the Act, as the case may be, that would otherwise be payable by the person in respect of the supply, and
    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and
  • (c) the person is neither
    • (i) a registrant that is a selected listed financial institution, nor
    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

Payment oftax — subsections (5) and (6)

(8) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (5) or (6),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes April 1, 2013 is required to be filed on or before a particular day that is before August 1, 2013, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and
  • (b) in any other case, section 219 and subsection 220.09(1) of the Act do not apply in respect of the tax and the person shall, before August 1, 2013, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

Lease or licence period ending before May 1, 2013

(9) Despite subsections (3) and (5), no tax is payable under subsection 165(2) of the Act in respect of a taxable supply of property by way of lease, licence or similar arrangement made in Prince Edward Island if the consideration for the supply is a rent, royalty or similar payment attributable to a period that begins before April 1, 2013 and ends before May 1, 2013.

Lease or licence period ending before May 1, 2013

(10) Despite subsections (4) and (6), no tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of a taxable supply of property by way of lease, licence or similar arrangement made to a person to which the property is delivered or made available, or physical possession of the property is transferred, in Prince Edward Island, if the consideration for the supply is a rent, royalty or similar payment attributable to a period that begins before April 1, 2013 and ends before May 1, 2013.

Exception — subsections (9) and (10)

(11) Subsections (9) and (10) do not apply in respect of consideration for a supply of property that is a rent, royalty or similar payment attributable to a period if the supplier supplies services in respect of that property for the same period and the consideration for the supply of the property and the consideration for the supply of the services is included in a single invoice.

Application

(12) Subsections (1) to (6), (9) and (10) do not apply in respect of an amount of consideration for a supply of intangible personal property if the amount of the consideration is not dependent on the amount of the use of or production from, or the profit from the use of or production from, the property.

Definitions

58.25 (1) In this section, “continuous freight movement”, “freight transportation service” and “shipper” have the same meanings as in subsection 1(1) of Part VII of Schedule VI to the Act.

Services partly performed before April 2013

(2) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a service made in Prince Edward Island to the extent that the consideration relates to any part of the service that is performed before April 1, 2013.

Services partly performed before April 2013

(3) No tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of any consideration for a supply of a service made outside Prince Edward Island to a person resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador to the extent that the consideration relates to any part of the service that is performed before April 1, 2013.

Consideration due or paid after January 2013

(4) If a taxable supply of a service is made in Prince Edward Island and any consideration for the supply becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, to the extent that the consideration relates to any part of the service that is not performed before April 1, 2013, that consideration is deemed, for the purpose of applying subsection 165(2) of the Act to the supply, to have become due on April 1, 2013 and not to have been paid before that day.

Consideration due or paid after January 2013

(5) If a taxable supply of a service is made outside Prince Edward Island to a person resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador, and any consideration for the supply becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, to the extent that the consideration relates to any part of the service that is not performed before April 1, 2013, that consideration is deemed, for the purpose of applying subsection 218.1(1) or 220.08(1) of the Act to the supply, to have become due on April 1, 2013 and not to have been paid before that day.

Consideration due or paid before February 2013

(6) Subject to subsection (8), if an amount of consideration for a taxable supply of a service made in Prince Edward Island by a registrant to a person that is not a consumer of the service becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and any part of the amount of consideration is for a part of the service that is not performed before April 1, 2013, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required to pay, in accordance with subsection (9), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

Consideration due or paid before February 2013

(7) Subject to subsection (8), if an amount of consideration for a taxable supply of a service made outside Prince Edward Island to a person that is not a consumer of the service and that is resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and any part of the amount of consideration is for a part of the service that is not performed before April 1, 2013, for the purposes of applying subsection 218.1(1) or 220.08(1) of the Act to the supply, that part of the amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required, despite subsection 218.1(2) and section 220.04 of the Act, to pay, in accordance with subsection (9), the tax under subsection 218.1(1) or 220.08(1) of the Act, as the case may be, payable in respect of the supply, in the absence of section 1 of Part II of Schedule X to the Act, on that part of the amount of consideration.

Exception — subsections (6) and (7)

(8) Subsections (6) and (7) do not apply in respect of a supply of a service made to a person if

  • (a) the service is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;
  • (b) the person
    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the service, the total amount of tax under subsection 165(2), 218.1(1) or 220.08(1) of the Act, as the case may be, that would otherwise be payable by the person in respect of the supply, and
    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and
  • (c) the person is neither
    • (i) a registrant that is a selected listed financial institution, nor
    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

Payment of tax — subsections (6) and (7)

(9) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (6) or (7),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes April 1, 2013 is required to be filed on or before a particular day that is before August 1, 2013, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and
  • (b) in any other case, section 219 and subsection 220.09(1) of the Act do not apply in respect of the tax and the person shall, before August 1, 2013, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

Services substantially all performed before April 2013

(10) Despite subsections (4) and (6), no tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a service (other than a freight transportation service, a passenger transportation service or a service to which section 58.27 applies) made in Prince Edward Island if all or substantially all of the service is performed before April 1, 2013.

Services substantially all performed before April 2013

(11) Despite subsections (5) and (7), no tax is payable under subsection 218.1(1) or 220.08(1) of the Act in respect of any consideration for a supply of a service (other than a freight transportation service, a passenger transportation service or a service to which section 58.27 applies) to a person resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador if all or substantially all of the service is performed before April 1, 2013.

Passenger transportation services commencing before April 2013

(12) Despite subsections (4) and (6), no tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply made in Prince Edward Island of a passenger transportation service, or of a service of transporting an individual’s baggage in connection with a passenger transportation service, if the passenger transportation service is part of a continuous journey that begins before April 1, 2013.

Freight transportation services commencing before April 2013

(13) Despite subsections (4) and (6), if one or more carriers make a taxable supply in Prince Edward Island of freight transportation services in respect of a continuous freight movement of tangible personal property and, before April 1, 2013, the shipper of the property transfers possession of the property to the first carrier engaged in the continuous freight movement, no tax is payable under subsection 165(2) of the Act in respect of any consideration for the supply.

Application

(14) This section does not apply to a supply to which section 58.28 applies.

Reduction in consideration — subsection 220.08(1) of Act

58.26 If a particular amount of consideration for a taxable supply made in Prince Edward Island to a person resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador becomes due, or is paid without having become due, at a particular time that is on or after February 1, 2013 and, as a consequence of this Part, tax under subsection 165(2) of the Act is only payable in respect of a portion of the particular amount, for the purpose of determining an amount of tax payable by the person under subsection 220.08(1) of the Act, the value of the consideration for the supply that becomes due, or is paid, at the particular time is deemed to be equal to the particular amount less that portion.

Continuous supplies

58.27 (1) If a supply of property or a service that is delivered, performed or made available on a continuous basis by means of a wire, pipeline, satellite, other conduit or other telecommunications facility is made in Prince Edward Island to a person, no tax is payable under subsection 165(2) of the Act in respect of any consideration for the supply to the extent that the consideration is attributable to

  • (a) property that is delivered or made available to the person before April 1, 2013; or
  • (b) any part of the service that is performed or made available before April 1, 2013.

Application

(2) This section does not apply to a supply to which section 58.28 applies.

Budget arrangements

58.28 (1) If a registrant makes a supply of property or a service in Prince Edward Island under a budget payment arrangement relating to a particular period that begins before April 1, 2013 and ends on or after that day, the budget payment arrangement provides for a reconciliation of the payments of consideration for the supply that are made during the particular period and the reconciliation is to take place at or after the end of the period and before April 1, 2014, the registrant shall, at the time the registrant issues an invoice for the reconciliation, calculate the positive or negative amount determined by the formula

A − B

where

A is the tax that would be payable under subsection 165(2) of the Act by the recipient in respect of the property, service or part thereof delivered, performed or made available on or after April 1, 2013 if the consideration for the supply of that property, service or part had become due and had been paid on or after April 1, 2013; and

B is the total tax that was payable under subsection 165(2) of the Act by the recipient in respect of the supply of the property or service delivered, performed or made available during the particular period.

Collection of tax

(2) If the amount calculated by a registrant under subsection (1) is a positive amount,

  • (a) the amount is deemed to be tax payable under subsection 165(2) of the Act by the recipient in respect of the supply; and
  • (b) the registrant is deemed to have collected the amount on the day on which the invoice for the reconciliation is issued.

Refund of excess

(3) If the amount calculated by a registrant under subsection (1) is a negative amount,

  • (a) the registrant shall refund or credit the amount to the recipient;
  • (b) the registrant shall issue a credit note for the amount of the refund or credit; and
  • (c) section 232 of the Act applies as if the credit note were issued under that section.

Definition of “funeral services”

58.29 (1) In this section, “funeral services” has the same meaning as in subsection 344(1) of the Act.

Funeral arrangements — trustee

(2) No tax is payable by a trustee under subsection 165(2) of the Act in respect of a supply made in Prince Edward Island of funeral services under an arrangement to supply funeral services in respect of an individual, or under section 212.1 or subsection 218.1(1), 220.05(1), 220.06(1), 220.07(1) or 220.08(1) of the Act in respect of funeral services supplied under the arrangement for consumption or use in Prince Edward Island, if

  • (a) the arrangement is entered into in writing before April 1, 2013;
  • (b) under the terms of the arrangement, the funds required to pay for the funeral services are held by the trustee and the trustee is responsible for acquiring funeral services in respect of the individual; and
  • (c) at the time the arrangement is entered into, it is reasonable to expect that all or a part of those funds will be advanced to the trustee before the individual’s death.

Funeral arrangements — other

(3) No tax is payable under subsection 165(2) of the Act in respect of a supply made in Prince Edward Island of funeral services under an arrangement to supply funeral services in respect of an individual, or under section 212.1 or subsection 218.1(1), 220.05(1), 220.06(1), 220.07(1) or 220.08(1) of the Act in respect of funeral services supplied under the arrangement for consumption or use in Prince Edward Island, if

  • (a) the arrangement is entered into in writing at any time before April 1, 2013; and
  • (b) at that time, it is reasonable to expect that all or a part of the consideration for the supply of the funeral services will be paid before the individual’s death.

Definition of “interment property”

58.3 (1) In this section, “interment property” means real property that is for the interment, entombment or inurnment of human remains.

Interment property

(2) No tax is payable under subsection 165(2) of the Act in respect of a supply of interment property made by way of lease, licence or similar arrangement in Prince Edward Island under an agreement for the supply of interment property if the agreement is entered into in writing before April 1, 2013.

Memberships and admissions — application

58.31 (1) This section does not apply to a supply of a right to acquire a membership in a club, an organization or an association.

Period of membership or admission before April 2013

(2) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply made in Prince Edward Island of a membership (other than a membership for the lifetime of an individual) in a club, an organization or an association or a taxable supply made in Prince Edward Island of an admission in respect of a place of amusement, a seminar, an activity or an event to the extent that the consideration relates to any part of the period of membership or admission that is before April 1, 2013.

Consideration due or paid after January 2013

(3) If a taxable supply of a membership (other than a membership for the lifetime of an individual) in a club, an organization or an association or an admission in respect of a place of amusement, a seminar, an activity or an event is made in Prince Edward Island and any consideration for the supply becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, to the extent that the consideration relates to any part of the period of membership or admission that is on or after April 1, 2013, that consideration is deemed, for the purpose of applying subsection 165(2) of the Act to the supply, to have become due on April 1, 2013 and not to have been paid before that day.

Consideration due or paid before February 2013

(4) Subject to subsection (5), if an amount of consideration for a taxable supply of a membership (other than a membership for the lifetime of an individual) in a club, an organization or an association or an admission in respect of a place of amusement, a seminar, an activity or an event made in Prince Edward Island by a registrant to a person that is not a consumer of the membership or admission becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and any part of the amount of consideration is for a part of the period of membership or admission that was not before April 1, 2013, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required to pay, in accordance with subsection (6), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

Exception — subsection (4)

(5) Subsection (4) does not apply in respect of a supply of a membership or an admission made to a person if

  • (a) the membership or admission is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;
  • (b) the person
    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the membership or admission, the total amount of tax under subsection 165(2) of the Act that would otherwise be payable by the person in respect of the supply, and
    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and
  • (c) the person is neither
    • (i) a registrant that is a selected listed financial institution, nor
    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

Payment of tax — subsection (4)

(6) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (4),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes April 1, 2013 is required to be filed on or before a particular day that is before August 1, 2013, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and
  • (b) in any other case, the person shall, before August 1, 2013, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

Period of membership or admission substantially all before April 2013

(7) Despite subsections (3) and (4), no tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a membership (other than a membership for the lifetime of an individual) in a club, an organization or an association or an admission in respect of a place of amusement, a seminar, an activity or an event made in Prince Edward Island if all or substantially all of the period of membership or admission was before April 1, 2013.

Lifetime memberships

(8) For the purpose of applying subsection 165(2) of the Act to a taxable supply of a membership for the lifetime of an individual made in Prince Edward Island, if the total of all amounts that were paid after November 8, 2012 and before April 1, 2013 as consideration for the supply exceeds 25% of the total consideration for the supply, the excess amount is deemed to have become due on April 1, 2013 and not to have been paid before April 1, 2013.

Lifetime memberships

(9) For the purpose of applying subsection 218.1(1) or 220.08(1) of the Act to a supply of a membership for the lifetime of an individual made outside Prince Edward Island to a person resident in Prince Edward Island and not resident in Ontario, Nova Scotia, New Brunswick, British Columbia or Newfoundland and Labrador, if the total of all amounts that were paid after November 8, 2012 and before April 1, 2013 as consideration for the supply exceeds 25% of the total consideration for the supply, the excess amount is deemed to have become due on April 1, 2013 and not to have been paid before April 1, 2013.

Definition of “validity period”

58.32 (1) In this section, “validity period” of a passenger transportation pass means

  • (a) the period throughout which the passenger transportation pass entitles an individual to transportation services; or
  • (b) if the period described in paragraph (a) is not ascertainable at the time when the passenger transportation pass is supplied to a person, the period beginning on the day the passenger transportation pass is delivered or made available to the recipient of the supply and ending on the day on which the passenger transportation pass expires or, in the absence of an expiration date, ending on April 1, 2015.

Validity period before April 2013

(2) No tax is payable under subsection 165(2) of the Act in respect of any consideration for a taxable supply of a passenger transportation pass made in Prince Edward Island to the extent that the consideration is attributable to any part of the validity period of the passenger transportation pass that is before April 1, 2013.

Consideration due or paid after January 2013

(3) If a taxable supply of a passenger transportation pass is made in Prince Edward Island and any consideration for the passenger transportation pass becomes due, or is paid without having become due, on or after February 1, 2013 and before April 1, 2013, to the extent that any consideration is attributable to any part of the validity period of the passenger transportation pass that is after March 31, 2013, that consideration is deemed, for the purpose of applying subsection 165(2) of the Act to the supply, to have become due on April 1, 2013 and not to have been paid before April 1, 2013.

Consideration due or paid before February 2013

(4) Subject to subsection (5), if an amount of consideration for a taxable supply of a passenger transportation pass made in Prince Edward Island by a registrant to a person that is not a consumer of the passenger transportation pass becomes due, or is paid without having become due, after November 8, 2012 and before February 1, 2013 and any part of the amount of consideration is attributable to a part of the validity period of the passenger transportation pass that is after March 31, 2013, for the purposes of applying subsection 165(2) of the Act to the supply, that part of the amount of consideration is deemed to have become due on April 1, 2013 and not to have been paid before that day and the person is required to pay, in accordance with subsection (6), the tax under subsection 165(2) of the Act payable in respect of the supply on that part of the amount of consideration.

Exception

(5) Subsection (4) does not apply in respect of a supply of a passenger transportation pass made to a person if

  • (a) the passenger transportation pass is acquired by the person for consumption, use or supply exclusively in commercial activities of the person;
  • (b) the person
    • (i) would be entitled to include, for the purpose of determining an input tax credit of the person in respect of the passenger transportation pass, the total amount of tax under subsection 165(2) of the Act that would be payable by the person in respect of the supply, and
    • (ii) would not have been required to add, in determining its net tax for any reporting period of the person, an amount in respect of an input tax credit referred to in subparagraph (i); and
  • (c) the person is neither
    • (i) a registrant that is a selected listed financial institution, nor
    • (ii) a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST/HST) Regulations.

Payment of tax — subsection (4)

(6) If a person is required to pay tax in accordance with this subsection as a consequence of the application of subsection (4),

  • (a) in the case of a person that is a registrant whose return under section 238 of the Act for the reporting period that includes April 1, 2013 is required to be filed on or before a particular day that is before August 1, 2013, the person shall pay the tax to the Receiver General on or before the particular day and report the tax in that return; and
  • (b) in any other case, the person shall, before August 1, 2013, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

Validity period ending before May 2013

(7) Despite subsections (3) and (4), no tax is payable under subsection 165(2) of the Act in respect of a taxable supply made in Prince Edward Island of a passenger transportation pass in respect of which the validity period begins before April 1, 2013 and ends before May 1, 2013.

Tangible personal property returned after March 2013

58.33 Where a person purchased tangible personal property in Prince Edward Island from a supplier before April 1, 2013 and paid retail sales tax in respect of the tangible personal property and, on or after April 1, 2013 and before August 1, 2013, the person returns the tangible personal property in exchange for other tangible personal property that the supplier supplies to the person in Prince Edward Island,

  • (a) if the consideration for the supply of the other property exceeds the consideration for the returned property, tax under subsection 165(2) of the Act in respect of the other property applies only on the excess amount; and
  • (b) if the consideration for the supply of the other property is less than or equal to the consideration for the returned property, no tax under subsection 165(2) of the Act is payable in respect of the supply of the other property.

Progress payments

58.34 Despite any other provision of this Part, if a taxable supply is made in Prince Edward Island under a contract to construct, renovate, alter or repair real property or a ship or other marine vessel,

  • (a) any consideration for the supply that becomes due, or is paid without having become due, after November 8, 2012 and before April 1, 2013 as a progress payment that is required under the contract, or as a holdback from such a progress payment, is deemed, for the purpose of applying subsection 165(2) of the Act, to have become due on April 1, 2013 and not to have been paid before that day;
  • (b) no tax is payable under subsection 165(2) of the Act in respect of any part of the consideration for the supply that may reasonably be attributed to property delivered and services performed under the contract before April 1, 2013; and
  • (c) where paragraph 168(3)(c) of the Act applies in respect of the supply, tax under subsection 165(2) of the Act is payable in respect of the supply and the construction, renovation, alteration or repair is substantially completed before March 2013, for the purpose of applying subsection 165(2) of the Act, the construction, renovation, alteration or repair is deemed to have been substantially completed on March 1, 2013 and not before that day.

Combined supply

58.35 Where a particular supply that includes a combination of personal property, real property or a service (each of which in this section is referred to as an “element”) is made in Prince Edward Island, the consideration for each element is not separately identified and no tax would, if a particular element that is property the ownership or possession of which is transferred to the recipient before April 1, 2013 were supplied separately, be payable under subsection 165(2) of the Act in respect of that particular element, for the purpose of applying tax under that subsection in respect of the supply, the particular element is deemed to have been supplied separately from all of the other elements.

Adjustments

58.36 (1) If a person pays tax as a consequence of the application of subsection 58.23(5) or (6), 58.24(5) or (6), 58.25(6) or (7), 58.31(4) or 58.32(4) calculated on the whole or part of the consideration for a taxable supply and that whole or part is subsequently reduced, to the extent that the person did not claim, and would not be, in the absence of this section, entitled to claim, an input tax credit or a rebate in respect of the portion of the tax payable under subsection 165(2), 218.1(1) or 220.08(1) of the Act that was calculated on the amount by which the whole or part was reduced, that portion is deemed, for the purpose of determining a rebate under section 261 of the Act, to be an amount that was not payable or remittable by the person.

Application

(2) Subsection (1) does not apply in circumstances in which section 161 of the Act applies.

Definitions

58.37 (1) In this section, “direct seller”, “distributor”, “exclusive product” and “independent sales contractor” have the same meanings as in section 178.1 of the Act.

Exclusive products held on April 1, 2013

(2) If before April 1, 2013, when an approval of the Minister for the application of section 178.3 of the Act to a direct seller is in effect, the direct seller has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect and the independent sales contractor holds, at the beginning of that day, the exclusive product for sale in Prince Edward Island, for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the direct seller is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.3(1) of the Act.

Prepayments for exclusive products not delivered by April 1, 2013

(3) If before April 1, 2013, when an approval of the Minister for the application of section 178.3 of the Act to a direct seller is in effect,

  • (a) the direct seller has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect,
  • (b) consideration for the supply becomes due, or is paid without having become due, after November 8, 2012 and before April 1, 2013,
  • (c) the exclusive product is not delivered to the independent sales contractor before April 1, 2013, and
  • (d) the exclusive product is to be held by the independent sales contractor for sale in Prince Edward Island,

for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the direct seller is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.3(1) of the Act.

Adaptation — subparagraph 178.3(1)(a)(i) of Act

(4) In applying subsection 178.3(1) of the Act in respect of a deemed supply under subsection (2) or (3), subparagraph 178.3(1)(a)(i) is adapted as follows:

  • (i) that becomes due, and is paid, at a particular time that is at the beginning of April 1, 2013, and

Exclusive products held on April 1, 2013

(5) If before April 1, 2013, when an approval of the Minister for the application of section 178.4 of the Act to a distributor of a direct seller is in effect, the distributor has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect and the independent sales contractor holds, at the beginning of that day, the exclusive product for sale in Prince Edward Island, for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the distributor is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.4(1) of the Act.

Prepayments for exclusive products not delivered by April 1, 2013

(6) If before April 1, 2013, when an approval of the Minister for the application of section 178.4 of the Act to a distributor of a direct seller is in effect,

  • (a) the distributor has made a taxable supply by way of sale (other than a zero-rated supply) of an exclusive product of the direct seller to an independent sales contractor of the direct seller that is not a distributor in respect of which an approval granted under subsection 178.2(4) of the Act on application made jointly with the direct seller is in effect,
  • (b) consideration for the supply becomes due, or is paid without having become due, after November 8, 2012 and before April 1, 2013,
  • (c) the exclusive product is not delivered to the independent sales contractor before April 1, 2013, and
  • (d) the exclusive product is to be held by the independent sales contractor for sale in Prince Edward Island,

for the purpose of applying subsection 165(2) or 220.05(1) of the Act, the distributor is deemed to have made, and the independent sales contractor is deemed to have received, on April 1, 2013 a supply by way of sale of the exclusive product in accordance with the rules provided in subsection 178.4(1) of the Act.

Adaptation — subparagraph 178.4(1)(a)(i) of Act

(7) In applying subsection 178.4(1) of the Act in respect of a deemed supply under subsection (5) or (6), subparagraph 178.4(1)(a)(i) of the Act is adapted as follows:

  • (i) that becomes due, and is paid, at a particular time that is at the beginning of April 1, 2013, and

Reciprocal taxation agreements

58.38 Subsections 58.23(3) to (6), 58.24(3) to (6), 58.25(4) to (7), 58.31(3), (4), (8) and (9) and 58.32(3) and (4) do not apply in respect of any consideration for a supply made to a person listed in Schedule A of the reciprocal taxation agreement entered into between the Government of Canada and the Government of Prince Edward Island that is applicable on March 31, 2013.

DIVISION 4

SPECIAL CASES

Employee and shareholder benefits

58.39 (1) In respect of the 2013 taxation year, if

  • (a) a benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing an individual’s income from an office or employment and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in the year in relation to that office or employment is located in Prince Edward Island, or
  • (b) a benefit amount is required under subsection 15(1) of the Income Tax Act to be included in computing an individual’s income and the individual is resident in Prince Edward Island at the end of the year

the portion of subclause (I) of the description of A in clause 173(1)(d)(vi)(B) of the Act after subsubclause 2 is adapted as follows:

  • 10.75%, and

Exception

(2) Subsection (1) does not apply in respect of a supply if section 37 of the New Harmonized Value-added Tax System Regulations, No. 2 applies for the purpose of determining an amount of tax under subparagraph 173(1)(d)(vi) of the Act in respect of an amount that includes the benefit amount referred to in subsection (1) in respect of the supply.

Election for shorter reporting period

58.4 Any person that, immediately before April 1, 2013, is resident in Prince Edward Island and registered under Subdivision d of Division V of Part IX of the Act may, subject to section 250 of the Act,

  • (a) if the reporting period of the person immediately before April 1, 2013 is a fiscal quarter, make an election under section 246 of the Act to have reporting periods that are fiscal months of the person to take effect, despite paragraph 246(1)(a) of the Act, on the first day of any fiscal quarter of the person that begins before April 1, 2014; and
  • (b) if the reporting period of the person immediately before April 1, 2013 is a fiscal year,
    • (i) make an election under section 246 of the Act to have reporting periods that are fiscal months of the person to take effect, despite paragraph 246(1)(a) of the Act, on the first day of any fiscal month of the person that begins before April 1, 2014, or
    • (ii) make an election under section 247 of the Act to have reporting periods that are fiscal quarters of the person to take effect, despite paragraph 247(1)(a) of the Act, on the first day of any fiscal quarter of the person that begins before April 1, 2014.

Revocation of election for streamlined accounting

58.41 (1) If a registrant that has made an election under subsection 227(1) of the Act that is in effect on April 1, 2013 is resident in Prince Edward Island immediately before April 1, 2013 or has made supplies in Prince Edward Island in the one-year period ending immediately before April 1, 2013, the registrant may, despite paragraph 227(4.1)(a) of the Act but subject to paragraph 227(4.1)(b) of the Act, revoke that election under subsection 227(4) of the Act with effect from

  • (a) if the reporting period of the registrant that includes April 1, 2013 is a fiscal year of the registrant, the first day of any fiscal month of the registrant that begins before April 1, 2014; and
  • (b) in any other case, the first day of any reporting period of the registrant that begins before April 1, 2014.

New reporting period if election

(2) If a registrant whose reporting period is a fiscal year revokes an election under subsection 227(4) of the Act in accordance with subsection (1) with effect from the first day of a particular fiscal month in a fiscal year of the registrant and that month is not the first fiscal month in that fiscal year,

  • (a) for the purposes of Part IX of the Act, the period beginning on the first day of that fiscal year and ending immediately before the first day of the particular fiscal month and the period beginning on the first day of the particular fiscal month and ending on the last day of that fiscal year are each deemed to be a separate reporting period of the registrant; and
  • (b) for the purposes of subsections 237(1) and (2) of the Act, each of those separate reporting periods is deemed to be a reporting period determined under subsection 248(3) of the Act.

Adaptation — paragraph 172.1(5)(a) of Act

58.42 If a person is a participating employer of a pension plan that acquires property or a service for the purpose of making a supply of all or part of the property or service to a pension entity of the pension plan but not for the purpose of making a supply of any part of the property or service to a pension entity of the pension plan after March 2013, for the purposes of calculating the amount determined for B in the first formula in paragraph 172.1(5)(c) of the Act for Prince Edward Island in respect of a taxable supply of all or part of the property or service that is deemed to have been made under paragraph 172.1(5)(a) of the Act, the description of F in the third formula in paragraph 172.1(5)(c) of the Act is adapted to be read as “is 0; and”.

Adaptation — paragraphs 172.1(6)(c) and (7)(c) of Act

58.43 In respect of a fiscal year of a person that includes April 1, 2013, for the purposes of calculating the amount determined for B in the first formula in paragraph 172.1(6)(c) of the Act for Prince Edward Island and for the purposes of calculating the amount determined for B in the first formula in paragraph 172.1(7)(c) of the Act for Prince Edward Island, the third formula in paragraph 172.1(6)(c) of the Act and the descriptions in that formula and the third formula in paragraph 172.1(7)(c) of the Act and the descriptions in that formula are adapted as follows:

(E × F) × (G/H)

where

E is the amount determined for C,

F is the provincial factor in respect of the pension plan and Prince Edward Island for the particular fiscal year,

G is the number of days in the particular fiscal year after March 2013, and

H is the number of days in the particular fiscal year; and

Subsection 218.1(1.2) of Act

58.44 The tax payable by a person under subsection 218.1(1.2) of the Act for the specified year (as defined in section 217 of the Act) of the person that includes April 1, 2013 and for Prince Edward Island is equal to the amount determined by the formula

A × (B/C)

where

A is the amount that, in the absence of this section, would be the tax payable by the person under subsection 218.1(1.2) of the Act for the specified year and for Prince Edward Island;

B is the number of days in the specified year after March 2013; and

C is the number of days in the specified year.

Rebate for pension entities

58.45 For the purposes of determining the provincial pension rebate amount for a claim period (as those terms are defined in subsection 261.01(1) of the Act) of a pension entity that includes April 1, 2013, the description of C in the formula in paragraph (a) of the definition “provincial pension rebate amount” in that subsection is adapted as follows if the participating province referred to in that paragraph is Prince Edward Island:

C is the percentage determined by the formula

9% × (C1/C2)

where

C1 is the number of days in the claim period after March 2013, and

C2 is the number of days in the claim period, and

PART 9

ELECTRONIC FILING AND PROVISION OF INFORMATION (GST/HST) REGULATIONS

21. (1) The definition “transitional new housing rebate” in section 1 of the Electronic Filing and Provision of Information (GST/HST) Regulations (see footnote 9) is replaced by the following:

  • “transitional new housing rebate”
    « remboursement transitoire pour habitation neuve  »

  • “transitional new housing rebate” means a rebate under subsection 256.21(1) of the Act, the amount of which is determined under Division 4 of Part 9 or Division 4 of Part 9.1 of the New Harmonized Value-added Tax System Regulations, No. 2.

(2) Paragraph (a) of the definition “qualifying housing supply” in section 1 of the Regulations is replaced by the following:

  • (a) in respect of which no tax is payable under subsection 165(2) of the Act as a consequence of subsection 51(1) or (2), 52(1) or (2), 53(1) or (2), 58.04(1) or (2), 58.05(1) or (2) or 58.06(1) or (2) of the New Harmonized Value-added Tax System Regulations, No. 2; or

22. Subparagraph 2(c)(iii) of the Regulations is replaced by the following:

  • (iii) is deemed for the purposes of the Act to have collected, at any time in the reporting period, tax as a consequence of paragraph 51(1)(e), 52(1)(e), 53(1)(e), 58.04(1)(e), 58.05(1)(e) or 58.06(1)(e) of the New Harmonized Value-added Tax System Regulations, No. 2; or

23. (1) Subsection 5(1) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) the total of all such amounts that are reasonably attributable to property acquired in, or brought into, Prince Edward Island or that relate to a service acquired for consumption or use in Prince Edward Island is a specified amount in respect of a specified return for the reporting period.

(2) Subsection 5(2) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) the total of all such amounts that are reasonably attributable to property acquired in, or brought into, Prince Edward Island or that relate to a service acquired for consumption or use in Prince Edward Island is a specified amount in respect of a specified return for the reporting period.

(3) Subsection 5(3) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) the positive or negative amount determined by the formula
  • A – B
  • where
  • A is the specified amount referred to in paragraph 5(1)(c) in respect of the specified return for the reporting period, and
  • B is the specified amount referred to in paragraph 5(2)(c) in respect of the specified return for the reporting period.

24. Section 6 of the Regulations is replaced by the following:

Transitional tax adjustment

6. If a builder is deemed for the purposes of the Act to have collected, as a consequence of paragraph 51(1)(e), 52(1)(e), 53(1)(e), 58.04(1)(e), 58.05(1)(e) or 58.06(1)(e) of the New Harmonized Value-added Tax System Regulations, No. 2, amounts of tax in a reporting period of the builder, for the purposes of section 284.01 of the Act, the total of those amounts of tax in respect of Ontario, the total of those amounts of tax in respect of British Columbia and the total of those amounts of tax in respect of Prince Edward Island are prescribed amounts in respect of a specified return for the reporting period.

25. Sections 8 and 9 of the Regulations are replaced by the following:

Sales of specified housing — consideration

8. If a builder makes specified housing supplies in respect of which tax under subsection 165(1) of the Act becomes payable at any time in a reporting period of the builder, for the purposes of section 284.01 of the Act, the total of all consideration for those specified housing supplies made in Ontario, the total of all consideration for those specified housing supplies made in Nova Scotia, the total of all consideration for those specified housing supplies made in British Columbia and the total of all consideration for those specified housing supplies made in Prince Edward Island are prescribed amounts in respect of a specified return for the reporting period.

Sales of formerly qualifying housing

9. If a builder is the recipient of supplies of residential complexes that are qualifying housing supplies made in Ontario, British Columbia or Prince Edward Island and the builder makes other subsequent supplies of the residential complexes in Ontario, British Columbia or Prince Edward Island in respect of which tax under subsection 165(2) of the Act becomes payable at any time in a reporting period of the builder, for the purposes of section 284.01 of the Act, the total of all consideration for those qualifying housing supplies made in Ontario, the total of all consideration for those qualifying housing supplies made in British Columbia and the total of all consideration for those qualifying housing supplies made in Prince Edward Island are prescribed amounts in respect of a specified return for the reporting period.

26. Section 12 of the Regulations is replaced by the following:

Number of housing units

12. If a person is required to report an amount determined under any of sections 8 to 10 in respect of residential complexes in a specified return for a reporting period of the person, for the purposes of section 284.01 of the Act, the number (in these Regulations referred to as the “specified number”) of residential complexes that are supplied by the person in the reporting period in each of Ontario, Nova Scotia, British Columbia and Prince Edward Island and in respect of which the amount is determined under any of those sections is prescribed information.

PART 10

NEW HARMONIZED VALUE-ADDED TAX SYSTEM REGULATIONS, NO. 2

27. The New Harmonized Value-added Tax System Regulations, No. 2 (see footnote 10) are amended by adding the following after section 8:

Specified provincial tax — Prince Edward Island

8.1 For the purposes of paragraph (d) of the definition “specified provincial tax” in section 220.01 of the Act, in the case of a vehicle registered in the province of Prince Edward Island, the prescribed tax is the tax imposed under the Retail Sales Tax Act, S.P.E.I. 2012, c. 22, as amended from time to time.

28. (1) The definition “specified province” in section 26 of the Regulations is replaced by the following:

  • “specified province”
    « province déterminée »

  • “specified province” means Ontario, British Columbia or Prince Edward Island.

(2) Paragraph (b) of the definition “recapture period” in section 26 of the Regulations is replaced by the following:

  • (b) occurs between July 1, 2010 and June 30, 2021.

(3) The portion of paragraph (b) of the definition “recapture rate” in section 26 of the Regulations before subparagraph (i) is replaced by the following:

  • (b) in the case of a specified provincial input tax credit that is an Ontario recapture amount,

(4) The definition “recapture rate” in section 26 of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) in the case of a specified provincial input tax credit that is a Prince Edward Island recapture amount,
    • (i) in the case of a time that is on or after April 1, 2013 and before April 1, 2018, 100%,
    • (ii) in the case of a time that is on or after April 1, 2018 and before April 1, 2019, 75%,
    • (iii) in the case of a time that is on or after April 1, 2019 and before April 1, 2020, 50%,
    • (iv) in the case of a time that is on or after April 1, 2020 and before April 1, 2021, 25%, and
    • (v) in the case of a time that is on or after April 1, 2021, 0%.

(5) Section 26 of the Regulations is amended by adding the following in alphabetical order:

  • “Ontario recapture amount”
    « montant de récupération de l’Ontario »

  • “Ontario recapture amount” means a specified provincial input tax credit in respect of
    • (a) the acquisition in Ontario of property;
    • (b) the bringing into Ontario of property; or
    • (c) the acquisition of a service for consumption or use in Ontario.
  • “Prince Edward Island recapture amount”
    « montant de récupération de l’Île-du-Prince-Édouard  »

    “Prince Edward Island recapture amount” means a specified provincial input tax credit in respect of
    • (a) the acquisition in Prince Edward Island of property;
    • (b) the bringing into Prince Edward Island of property; or
    • (c) the acquisition of a service for consumption or use in Prince Edward Island.

29. (1) Paragraph 28(1)(b) of the Regulations is replaced by the following:

  • (b) motive fuel, other than diesel fuel, that is acquired in, or brought into, a specified province for consumption or use in the engine of a qualifying motor vehicle;

(2) Paragraph 28(1)(e) of the Regulations is replaced by the following:

  • (e) specified energy that is acquired in, or brought into, a specified province other than qualifying heating oil, as defined in section 1 of the Deduction for Provincial Rebate (GST/HST) Regulations, acquired in, or brought into Prince Edward Island;

30. Section 30 of the Regulations is renumbered as subsection 30(1) and is amended by adding the following:

Prescribed time — Prince Edward Island

(2) In applying subsection (1) in respect of a specified provincial input tax credit that is a Prince Edward Island recapture amount, the reference to “July 1, 2010” in subparagraph (1)(d)(ii) is to be read as a reference to “April 1, 2013”.

31. (1) Paragraphs (a) and (b) of the description of A in subsection 31(2) of the Regulations are replaced by the following:

  • (a) if the specified property or service is a qualifying motor vehicle in respect of which paragraph 30(1)(a) applies and the person is a large business at the time that would, in the absence of that paragraph, be the time prescribed by section 30 in respect of the specified provincial input tax credit, the specified provincial input tax credit,
  • (b) if the specified property or service is property or a service other than a qualifying motor vehicle in respect of which paragraph 30(1)(a) applies and the person is a large business at the particular time, the specified provincial input tax credit, and

(2) The description of K in paragraph (b) of the description of A in subsection 31(3) of the Regulations is amended by striking out “and” at the end of subparagraph (ii) and by adding the following after that subparagraph:

  • (ii.1) if the specified provincial input tax credit is in respect of specified energy acquired in or brought into Prince Edward Island, the production carried on by the person in Canada during the last fiscal year of the person immediately preceding the reporting period is carried on primarily in Prince Edward Island and the most significant business activity of the person carried on in Canada in that fiscal year is described in the industry classification system under the code
    • (A) 113, 211, 212, 322, 324, 325, 327 or 331, 4%,
    • (B) 311, 312, 313, 314, 321, 326 or 332, 13%, or
    • (C) 315, 316, 323, 333, 334, 335, 336, 337 or 339, 30%, and

(3) The portion of paragraph (b) of the description of A in subsection 31(4) of the Regulations before subparagraph (i) is replaced by the following:

  • (b) if the specified property or service is acquired for consumption or use in Ontario or Prince Edward Island and is provided to the person together with

(4) Paragraph (a) of the description of A in subsection 31(5) of the Regulations is replaced by the following:

  • (a) if the person is a large business at the time that would, in the absence of paragraph 30(1)(b), be the time prescribed by section 30 in respect of the specified provincial input tax credit, 50% of the specified provincial input tax credit, and

(5) Subsection 31(7) of the Regulations is replaced by the following:

Election to use the SRED proxy

(7) For the purposes of subsection (3), a person may, before the first day of a recapture period, elect, for the recapture period, to determine the amount to be added under that subsection in respect of a specified provincial input tax credit (other than a Prince Edward Island recapture amount) of the person in respect of specified energy in accordance with a method described in that subsection.

32. Paragraph (a) of the description of A in subsection 36(1) of the Regulations is replaced by the following:

  • (a) where the first day of that fiscal year is before July 1, 2010 and the specified provincial input tax credit is not a Prince Edward Island recapture amount, the new harmonized value-added tax system had been in effect, with all modifications as the circumstances may require, throughout that fiscal year in respect of each specified province (other than Prince Edward Island) and the harmonization date for the specified province had been the first day of that fiscal year,
  • (a.1) where the first day of that fiscal year is before April 1, 2013 and the specified provincial input tax credit is a Prince Edward Island recapture amount, the new harmonized value-added tax system had been in effect, with all modifications as the circumstances may require, throughout that fiscal year in respect of Prince Edward Island and the harmonization date for Prince Edward Island had been the first day of that fiscal year,

33. Section 42 of the Regulations is amended by striking out “and” at the end of paragraph (c) and by adding the following before paragraph (e):

  • (d.1) a residential complex situated in Prince Edward Island,
    • (i) the references in that subsection to “$472,500” are to be read as references to “$513,000”,
    • (ii) the references in that subsection to “$367,500” are to be read as references to “$399,000”,
    • (iii) the reference in that subsection to “$105,000” is to be read as a reference to “$114,000”,
    • (iv) the reference in paragraph (h) of that subsection to “1.71%” is to be read as a reference to “the lesser of $6,300 and 1.58%”, and
    • (v) the reference in the description of A in the formula in paragraph (i) of that subsection to “1.71%” is to be read as a reference to “1.58%”; and

34. Section 44 of the Regulations is amended by striking out “and” at the end of paragraph (c) and by adding the following before paragraph (e):

  • (d.1) a residential complex situated in Prince Edward Island,
    • (i) the references in that subsection to “$472,500” are to be read as references to “$513,000”,
    • (ii) the references in that subsection to “$367,500” are to be read as references to “$399,000”,
    • (iii) the reference in that subsection to “$105,000” is to be read as a reference to “$114,000”,
    • (iv) the reference in paragraph (g) of that subsection to “1.71%” is to be read as a reference to “the lesser of $6,300 and 1.58%”, and
    • (v) the reference in the description of A in the formula in paragraph (h) of that subsection to “1.71%” is to be read as a reference to “1.58%”; and

35. (1) Paragraphs 49(1)(c) and (d) of the French version of the Regulations are replaced by the following:

  • c) les fournitures d’immeubles effectuées par bail, licence ou accord semblable dans une province déterminée avant le 1er juillet 2010 et dont la totalité de la contrepartie devient due à cette date ou par la suite ou est payée à cette date ou par la suite sans être devenue due, ou est réputée être devenue due ou avoir été payée à cette date ou par la suite et n’est pas réputée être devenue due ou avoir été payée avant cette date;
  • d) les fournitures d’immeubles effectuées par bail, licence ou accord semblable dans une province déterminée avant le 1er juillet 2010 et dont une partie de la contrepartie devient due à cette date ou par la suite ou est payée à cette date ou par la suite sans être devenue due, ou est réputée être devenue due ou avoir été payée à cette date ou par la suite.

(2) Subsection 49(2) of the Regulations is replaced by the following:

Exception

(2) Subject to Division 3, tax under subsection 165(2) of the Act is not payable in respect of any part of the consideration for a supply referred to in paragraph (1)(d) that becomes due or is paid before July 1, 2010 and is not deemed to have become due or to have been paid on or after that day.

36. Paragraph 51(1)(g) of the French version of the Regulations is replaced by the following:

  • g) pour l’application de la section 4, l’immeuble est réputé ne pas être un immeuble d’habitation à logement unique déterminé.

37. Subparagraphs 52(2)(d)(ii) and (iii) of the English version of the Regulations are replaced by the following:

  • (ii) the original vendor of the unit and the person that assigns the agreement deal with each other at arm’s length and are not associated with each other, and
  • (iii) neither the original vendor of the unit nor any person that does not deal at arm’s length with, or that is associated with, the original vendor acquires an interest in the unit.

38. (1) Paragraph 53(3)(e) of the English version of the Regulations is replaced by the following:

  • (e) neither the original vendor of the complex nor any person that does not deal at arm’s length with, or that is associated with, the original vendor acquires an interest in the complex or unit, as the case may be.

(2) Paragraph 53(8)(c) of the English version of the Regulations is replaced by the following:

  • (c) neither the original vendor of the condominium complex in which the unit is situated nor any person that does not deal at arm’s length with, or that is associated with, the original vendor acquires an interest in the unit.

39. Subsection 56(3) of the English version of the Regulations is replaced by the following:

Assignment of rebate

(3) If the circumstances described in subsection (1) are satisfied in respect of a complex and subparagraph (1)(a)(ii) applies in respect of the complex, for the purposes of subsection 256.21(6) of the Act, the rebate under subsection 256.21(1) of the Act in respect of the complex, the amount of which is determined under subsection (4), is a prescribed rebate and that rebate may be assigned to the builder of the complex referred to in paragraph (1)(a).

40. The Regulations are amended by adding the following after section 58:

PART 9.1

PRINCE EDWARD ISLAND REAL PROPERTY TRANSITIONAL RULES
DIVISION 1

INTERPRETATION

Application of subsections 48(2) and (3)

58.01 Subsections 48(2) and (3) apply for the purposes of this Part.

DIVISION 2

APPLICATION

Application

58.02 (1) Subject to subsection (2) and to Division 3 and section 58.24 of the New Harmonized Value-added Tax System Regulations, subsection 165(2) of the Act and the provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to

  • (a) any supply of real property made in Prince Edward Island on or after April 1, 2013;
  • (b) any supply by way of sale of real property made in Prince Edward Island before April 1, 2013 if ownership and possession of that property are transferred to the recipient of the supply on or after April 1, 2013;
  • (c) any supply of real property made in Prince Edward Island before April 1, 2013 by way of lease, licence or similar arrangement if all of the consideration for the supply becomes due or is paid without having become due, or is deemed to have become due or to have been paid, on or after April 1, 2013 and is not deemed to have become due or to have been paid before that day; and
  • (d) any supply of real property made in Prince Edward Island before April 1, 2013 by way of lease, licence or similar arrangement if part of the consideration for the supply becomes due or is paid without having become due, or is deemed to have become due or to have been paid, on or after April 1, 2013.

Exception

(2) Subject to Division 3, tax under subsection 165(2) of the Act is not payable in respect of any part of the consideration for a supply referred to in paragraph (1)(d) that becomes due or is paid before April 1, 2013 and is not deemed to have become due or to have been paid on or after that day.

Agreement not indicating tax

58.03 If

  • (a) a builder of a residential complex makes a taxable supply by way of sale of the complex in Prince Edward Island under an agreement of purchase and sale entered into after November 8, 2012 and before April 1, 2013,
  • (b) tax under subsection 165(2) of the Act becomes payable in respect of the supply,
  • (c) the agreement does not indicate in writing
    • (i) the total tax payable in respect of the supply in a manner that clearly indicates the amount of that total and whether or not that amount takes into account any amount to be paid or credited in accordance with subsection 254(4) of the Act, and
    • (ii) the total of the rates at which tax is payable in respect of the supply, and
  • (d) the builder is required under section 221 of the Act to collect tax in respect of the supply,

the following rules apply:

  • (e) for the purposes of Part IX of the Act the consideration for the supply is deemed to be the amount determined by the formula
  • (100%/A) × B
  • where
  • A is the total of 100% and the rate at which tax under subsection 165(2) of the Act is calculated in respect of the supply, and
  • B is the consideration for the supply as otherwise determined under Part IX of the Act, and
  • (f) for the purposes of Part IX of the Act, the builder is deemed to have collected, and the recipient is deemed to have paid, on the earlier of the day ownership of the complex is transferred to the recipient and the day possession of the complex is transferred to the recipient under the agreement, tax under subsection 165(2) of the Act calculated on the consideration for the supply.
DIVISION 3

TRANSITION

Transfer of single unit residential complex after March 2013

58.04 (1) If

  • (a) a particular taxable supply by way of sale of a single unit residential complex (other than a floating home or a mobile home) is made in Prince Edward Island to an individual under an agreement, evidenced in writing, entered into between the supplier (in this section referred to as the “original vendor”) and the individual on or before November 8, 2012,
  • (b) neither ownership nor possession of the complex is transferred to the individual under the agreement before April 1, 2013, and
  • (c) possession of the complex is transferred to the individual under the agreement at any time on or after April 1, 2013,

the following rules apply:

  • (d) no tax is payable under subsection 165(2) of the Act in respect of the particular supply,
  • (e) for the purposes of Part IX of the Act, if immediately after March 2013, the construction or last substantial renovation of the complex is less than 90% completed, the original vendor is deemed to have made another taxable supply in respect of the complex and to have collected, at the earlier of the time ownership of the complex is transferred to the individual and the time possession of the complex is transferred to the individual under the agreement, tax under Division II of Part IX of the Act in respect of the other supply equal to
    • (i) 4.5% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, less than 10% completed,
    • (ii) 3.38% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 10% or more but less than 25% completed,
    • (iii) 2.25% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 25% or more but less than 50% completed,
    • (iv) 1.13% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 50% or more but less than 75% completed, and
    • (v) 0.45% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 75% or more but less than 90% completed,
  • (f) for the purposes of paragraph (e), if the value of the consideration for the particular supply is less than the amount that would be the fair market value of the complex at the time the agreement is entered into if the construction of the complex or, in the case of a substantial renovation of the complex, the last substantial renovation of the complex, were substantially completed at that time, the consideration is deemed to be equal to that amount, and
  • (g) for the purposes of Division 4, the complex is deemed not to be a specified single unit residential complex.

Assignment of agreement

(2) The rules in paragraphs (1)(d) to (g) apply in respect of an agreement described in paragraph (1)(a) in respect of a single unit residential complex (other than a floating home or a mobile home) if the following circumstances apply:

  • (a) the agreement is assigned to a particular individual;
  • (b) neither ownership nor possession of the complex is transferred to any individual under the agreement before April 1, 2013;
  • (c) possession of the complex is transferred to the particular individual under the agreement at any time on or after April 1, 2013; and
  • (d) the following conditions are met in respect of the assignment of the agreement to the particular individual and in respect of every other assignment of the agreement made prior to the assignment to the particular individual:
    • (i) a novation of the agreement has not occurred,
    • (ii) the original vendor of the complex and the individual who assigns the agreement deal with each other at arm’s length and are not associated with each other, and
    • (iii) neither the original vendor of the complex nor any person that does not deal at arm’s length with, or that is associated with, the original vendor acquires an interest in the complex.

In applying those rules, the reference to the “individual” in paragraph (1)(e) is to be read as a reference to the “particular individual”.

Input tax credit — resale

(3) If an individual makes a particular taxable supply by way of sale of a single unit residential complex (other than a floating home or a mobile home) to a person under an agreement evidenced in writing, the individual is the recipient of a previous supply of the complex in respect of which no tax is payable under subsection 165(2) of the Act pursuant to subsection (1) or (2) and tax under subsection 165(2) of the Act is payable in respect of the particular supply, for the purposes of determining an input tax credit of the individual and for the purposes of section 58.07, the individual is deemed to have received another taxable supply in respect of the complex and to have paid, at the time possession of the complex is transferred to the person, tax in respect of the other supply equal to 4.5% of the consideration for the previous supply made to the individual by the original vendor of the complex.

Self-assessment on acquisition of real property

(4) If a particular individual is the recipient of a taxable supply by way of sale of a single unit residential complex (other than a floating home or a mobile home) from another person, tax under subsection 165(2) of the Act is payable in respect of the supply, no tax would have been payable under subsection 165(2) of the Act in respect of the supply if subsection (2) were read without reference to subparagraph (2)(d)(iii) and the other person would, in the absence of this subsection, be required under section 221 of the Act to collect tax in respect of the supply, the following rules apply:

  • (a) despite section 221 of the Act, the other person is not required to collect tax under subsection 165(2) of the Act in respect of the supply; and
  • (b) the particular individual shall,
    • (i) if the particular individual is a registrant and acquired the complex for use or supply primarily in the course of commercial activities of the particular individual, on or before the day on or before which the particular individual’s return for the reporting period in which the tax became payable is required to be filed, pay the tax payable under subsection 165(2) of the Act in respect of the supply to the Receiver General and report that tax in that return, and
    • (ii) in any other case, on or before the last day of the month following the calendar month in which the tax became payable, pay the tax payable under subsection 165(2) of the Act to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax under subsection 165(2) of the Act in prescribed form containing prescribed information.

Transfer of residential condominium unit after March 2013

58.05(1) If

  • (a) a particular taxable supply by way of sale of a residential condominium unit is made in Prince Edward Island to a person under an agreement, evidenced in writing, entered into between the supplier (in this section referred to as the “original vendor”) and the person on or before November 8, 2012,
  • (b) neither ownership nor possession of the unit is transferred to the person under the agreement before April 1, 2013, and
  • (c) possession of the unit is transferred to the person under the agreement at any time on or after April 1, 2013,

the following rules apply:

  • (d) no tax is payable under subsection 165(2) of the Act in respect of the particular supply,
  • (e) for the purposes of Part IX of the Act, the original vendor is deemed to have made another taxable supply in respect of the unit and to have collected, at the earlier of the time ownership of the unit is transferred to the person and the time possession of the unit is transferred to the person under the agreement, tax under Division II of Part IX of the Act in respect of the other supply equal to 4.5% of the consideration for the particular supply, and
  • (f) for the purposes of paragraph (e) and Division 4, if the value of the consideration for the particular supply is less than the amount that would be the fair market value of the unit at the time the agreement is entered into if the construction of the unit or, in the case of a substantial renovation of the unit, the last substantial renovation of the unit, were substantially completed at that time, the consideration is deemed to be equal to that amount.

Assignment of agreement

(2) The rules in paragraphs (1)(d) to (f) apply in respect of an agreement described in paragraph (1)(a) in respect of a residential condominium unit if the following circumstances apply:

  • (a) the agreement is assigned to a particular person;
  • (b) neither ownership nor possession of the unit is transferred to any person under the agreement before April 1, 2013;
  • (c) possession of the unit is transferred to the particular person under the agreement at any time on or after April 1, 2013; and
  • (d) the following conditions are met in respect of the assignment of the agreement to the particular person and in respect of every other assignment of the agreement made prior to the assignment to the particular person:
    • (i) a novation of the agreement has not occurred,
    • (ii) the original vendor of the unit and the person that assigns the agreement deal with each other at arm’s length and are not associated with each other, and
    • (iii) neither the original vendor of the unit nor any person that does not deal at arm’s length with, or that is associated with, the original vendor acquires an interest in the unit.

In applying those rules, the reference to the “person” in paragraph (1)(e) is to be read as a reference to the “particular person”.

Input tax credit — resale

(3) If a particular person makes a particular taxable supply by way of sale of a residential condominium unit to another person under an agreement evidenced in writing, the particular person is the recipient of a previous supply of the unit in respect of which no tax is payable under subsection 165(2) of the Act pursuant to subsection (1) or (2) and tax under subsection 165(2) of the Act is payable in respect of the particular supply, for the purposes of determining an input tax credit of the particular person and for the purposes of section 58.07, the particular person is deemed to have received another taxable supply in respect of the unit and to have paid, at the time possession of the unit is transferred to the other person, tax in respect of the other supply equal to 4.5% of the consideration for the previous supply made to the particular person by the original vendor of the unit.

Self-assessment on acquisition of real property

(4) If a particular person is the recipient of a taxable supply by way of sale of a residential condominium unit from another person, tax under subsection 165(2) of the Act is payable in respect of the supply, no tax would have been payable under subsection 165(2) of the Act in respect of the supply if subsection (2) were read without reference to subparagraph (2)(d)(iii) and the other person would, in the absence of this subsection, be required under section 221 of the Act to collect tax in respect of the supply, the following rules apply:

  • (a) despite section 221 of the Act, the other person is not required to collect tax under subsection 165(2) of the Act in respect of the supply; and
  • (b) the particular person shall,
    • (i) if the particular person is a registrant and acquired the unit for use or supply primarily in the course of commercial activities of the particular person, on or before the day on or before which the particular person’s return for the reporting period in which the tax became payable is required to be filed, pay the tax payable under subsection 165(2) of the Act in respect of the supply to the Receiver General and report that tax in that return, and
    • (ii) in any other case, on or before the last day of the month following the calendar month in which the tax became payable, pay the tax payable under subsection 165(2) of the Act to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax under subsection 165(2) of the Act in prescribed form containing prescribed information.

Transfer of condominium complex after March 2013

58.06 (1) If

  • (a) a particular taxable supply by way of sale of a condominium complex is made in Prince Edward Island to a person under an agreement, evidenced in writing, entered into between the supplier (in this section referred to as the “original vendor”) and the person on or before November 8, 2012,
  • (b) neither ownership nor possession of the complex is transferred to the person under the agreement before April 1, 2013, and
  • (c) at any time on or after April 1, 2013, ownership of the complex is transferred to the person under the agreement or the complex is registered as a condominium,

the following rules apply:

  • (d) no tax is payable under subsection 165(2) of the Act in respect of the particular supply,
  • (e) for the purposes of Part IX of the Act, the original vendor is deemed to have made another taxable supply in respect of the complex and to have collected, on the earlier of the day ownership of the complex is transferred to the person under the agreement and the day that is sixty days after the day on which the complex is registered as a condominium, tax under Division II of Part IX of the Act in respect of the other supply equal to 4.5% of the consideration for the particular supply, and
  • (f) for the purposes of paragraph (e) and Division 4, if the value of the consideration for the particular supply is less than the amount that would be the fair market value of the complex at the time the agreement is entered into if the construction of the complex or, in the case of a substantial renovation of the complex, the last substantial renovation of the complex, were substantially completed at that time, the consideration is deemed to be equal to that amount.

Assignment of agreement

(2) The rules in paragraphs (1)(d) to (f) apply in respect of an agreement described in paragraph (1)(a) in respect of a condominium complex if the following circumstances apply:

  • (a) the agreement is assigned to a particular person;
  • (b) neither ownership nor possession of the complex is transferred to any person under the agreement before April 1, 2013;
  • (c) at any time on or after April 1, 2013, ownership of the complex is transferred to the particular person or the complex is registered as a condominium; and
  • (d) the following conditions are met in respect of the assignment of the agreement to the particular person and in respect of every other assignment of the agreement made prior to the assignment to the particular person:
    • (i) a novation of the agreement has not occurred,
    • (ii) the original vendor of the complex and the person that assigns the agreement deal with each other at arm’s length and are not associated with each other, and
    • (iii) neither the original vendor of the complex nor any person that does not deal at arm’s length with, or that is associated with, the original vendor acquires an interest in the complex.

In applying those rules, the reference to the “person” in paragraph (1)(e) is to be read as a reference to the “particular person”.

Input tax credit — resale

(3) If a particular person makes a particular taxable supply by way of sale of a condominium complex, or any residential condominium unit located in a condominium complex, to another person under an agreement evidenced in writing, the particular person is the recipient of a previous supply of the complex in respect of which no tax is payable under subsection 165(2) of the Act pursuant to subsection (1) or (2) and tax under subsection 165(2) of the Act is payable in respect of the particular supply, for the purposes of determining an input tax credit of the particular person and for the purposes of section 58.07,

  • (a) if the particular supply is a supply of a condominium complex, the particular person is deemed to have received another taxable supply in respect of the complex and to have paid, at the time possession of the complex is transferred to the other person, tax in respect of the other supply equal to 4.5% of the consideration for the previous supply made to the particular person by the original vendor of the complex; or
  • (b) if the particular supply is a supply of a residential condominium unit located in a condominium complex, the particular person is deemed to have received another taxable supply in respect of the complex and to have paid, at the time possession of the unit is transferred to the other person, tax in respect of the other supply equal to 4.5% of the consideration for the previous supply made to the particular person by the original vendor of the complex multiplied by the percentage of total floor space (as defined in subsection 256.2(1) of the Act) of the unit.

Self-assessment on acquisition of real property

(4) If a particular person is the recipient of a taxable supply by way of sale of a condominium complex or residential condominium unit from another person, tax under subsection 165(2) of the Act is payable in respect of the supply, no tax would have been payable under subsection 165(2) of the Act in respect of the supply if subsection (2) were read without reference to subparagraph (2)(d)(iii) and the other person would, in the absence of this subsection, be required under section 221 of the Act to collect tax in respect of the supply, the following rules apply:

  • (a) despite section 221 of the Act, the other person is not required to collect tax under subsection 165(2) of the Act in respect of the supply; and
  • (b) the particular person shall
    • (i) if the particular person is a registrant and acquired the complex or unit for use or supply primarily in the course of commercial activities of the particular person, on or before the day on or before which the particular person’s return for the reporting period in which the tax became payable is required to be filed, pay the tax payable under subsection 165(2) of the Act in respect of the supply to the Receiver General and report that tax in that return, and
    • (ii) in any other case, on or before the last day of the month following the calendar month in which the tax became payable, pay the tax payable under subsection 165(2) of the Act to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax under subsection 165(2) of the Act in prescribed form containing prescribed information.

Non-registrant rebate

58.07 (1) For the purposes of subsection 256.21(1) of the Act, if a person that is not a registrant is deemed to have paid tax under subsection 58.04(3), 58.05(3) or 58.06(3) in respect of a taxable supply that is in respect of a residential complex, the person is a prescribed person and the amount of the rebate in respect of the complex under subsection 256.21(1) of the Act is equal to the amount of that tax.

Application for rebate

(2) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (1), must be filed within two years after the day on which the tax referred to in that subsection is deemed to have been paid.

DIVISION 4

TRANSITIONAL NEW HOUSING REBATES

Definitions

58.08 (1) The following definitions apply in this Division.

“estimated provincial levy”
« prélèvement provincial estimé »

“estimated provincial levy”, in respect of a rebate in relation to a specified residential complex or a specified single unit residential complex means

  • (a) if, in an application filed for the rebate, the amount applied for is not based on the fair market value of the complex or the consideration for the supply of the complex, the amount determined by the formula

    A × B

    where

    A is

    • (i) if the complex is not a residential condominium unit, the number of square metres of the interior floor space of the complex, and
    • (ii) if the complex is a residential condominium unit, the total of
      • (A) the number of square metres of the interior floor space of the unit, and
      • (B) the amount equal to the total number of square metres of interior floor space of the common areas of the condominium complex in which the unit is situated multiplied by the fraction obtained by dividing the number of square metres of interior floor space of the unit by the total number of square metres of interior floor space of all condominium units in the condominium complex, and
  • B is $60; and
    (b) in any other case, the amount determined by the formula

    A × 4.5%

    where

    A is
    • (i) in the case where a builder of the complex was deemed under section 191 of the Act to have collected, at any time, tax in respect of the complex and the rebate is a rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection 58.09(4) or 58.1(4), that is payable to the builder in respect of the complex, the fair market value of the complex at that time,
    • (ii) in the case where tax was deemed under paragraph 58.05(1)(e) to have been collected in respect of a taxable supply that is in respect of the complex and the rebate is a rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection 58.1(4), that is payable to the builder of the complex, the consideration for the supply,
    • (iii) in the case of a complex that is a residential condominium unit, if tax was deemed under paragraph 58.06(1)(e) to have been collected in respect of a taxable supply that is in respect of the condominium complex in which the unit is situated and the rebate is a rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection 58.1(4), that is payable to the builder of the complex, the portion of the consideration for the supply that is attributable to that unit,
    • (iv) in the case of a rebate under subsection 256.21(1) of the Act, in respect of which subparagraph (i) does not apply and the amount of which is determined under subsection 58.09(4), that is payable to an individual in respect of the complex, the consideration for the supply by way of sale of the complex to the individual, or
    • (v) in the case of a rebate under subsection 256.21(1) of the Act, in respect of which subparagraphs (i) to (iii) do not apply and the amount of which is determined under subsection 58.1(4), that is payable to a builder in respect of the complex, the consideration for the supply by way of sale of the complex by the builder.
  • “specified residential complex”
    « immeuble d’habitation déterminé »
  • “specified residential complex” means
  • (a) a multiple unit residential complex (other than a multiple unit residential complex referred to in the definition “single unit residential complex” in subsection 254(1) of the Act) or an addition to a multiple unit residential complex, if the construction or last substantial renovation of the complex or addition began before April 1, 2013 and subsection 191(3) or (4) of the Act, as the case may be, did not apply, and would not have applied, in the absence of subsections 191(5) to (7) of the Act, after the day on which the construction or last substantial renovation began and before April 1, 2013, to deem a supply of the complex or addition to have been made; or
  • (b) a residential condominium unit in a condominium complex where the construction or last substantial renovation of the condominium complex began before April 1, 2013 and neither subsection 191(1) nor (2) of the Act applied, and would not have applied, in the absence of subsections 191(5) to (7) of the Act, after the construction or last substantial renovation began and before April 1, 2013, to deem a supply of the unit to have been made.
  • “specified single unit residential complex”
    « immeuble d’habitation à logement unique déterminé »
  • “specified single unit residential complex” means a residential complex, other than a floating home or a mobile home,
  • (a) that is a single unit residential complex (within the meaning of subsection 254(1) of the Act);
  • (b) the construction or last substantial renovation of which began before April 1, 2013; and
  • (c) that was not occupied by any individual as a place of residence or lodging after the construction or last substantial renovation began and before April 1, 2013.

Interior floor space

(2) Subject to subsection (3), for the purposes of this Division, the interior floor space of a complex or unit includes the width of its enclosing walls that are not adjacent to any other complex or unit and half of the width of its enclosing walls that are adjacent to another complex or unit.

Interior floor space

(3) The interior floor space of a complex and of the common areas of a condominium complex does not include

  • (a) storage rooms, attics and basements, unless finished to a standard comparable to the living areas of the complex
    • (i) by the builder that supplies the complex to the person entitled to claim a rebate in respect of the complex, the amount of which is determined under this Division, or by any previous builder of the complex, if the complex is a specified single unit residential complex, and
    • (ii) by a builder of the complex, in any other case;
  • (b) parking areas; and
  • (c) areas set aside for the placement of equipment for the heating or cooling of, or the supply of water, gas or electricity to, the complex or the condominium complex.

Rebate for a specified single unit residential complex

58.09 (1) For the purposes of subsection 256.21(1) of the Act, the following circumstances are prescribed circumstances in respect of a specified single unit residential complex:

  • (a) a builder of the complex
    • (i) is deemed under section 191 of the Act to have made a taxable supply of the complex as a consequence of giving possession or use of the complex to a person or of occupying it as a place of residence, or
    • (ii) makes a taxable supply by way of sale of the complex to an individual;
  • (b) the complex is situated in Prince Edward Island;
  • (c) tax under subsection 165(2) of the Act is payable in respect of the supply;
  • (d) if subparagraph (a)(i) applies, first possession or use of the complex as a place of residence, after substantial completion of its construction or last substantial renovation, occurs on or after April 1, 2013 and before April 1, 2017;
  • (e) if subparagraph (a)(ii) applies, possession of the complex is transferred to the individual on or after April 1, 2013 and before April 1, 2017; and
  • (f) that construction or last substantial renovation of the complex is 10% or more completed immediately after March 2013.

Prescribed property and person

(2) If the circumstances described in subsection (1) are satisfied in respect of a complex, for the purposes of subsection 256.21(1) of the Act, the complex is prescribed property and

  • (a) in the case described in subparagraph (1)(a)(i), the builder referred to in paragraph (1)(a) is a prescribed person; and
  • (b) in the case described in subparagraph (1)(a)(ii), the individual referred to in that subparagraph is a prescribed person.

Assignment of rebate

(3) If the circumstances described in subsection (1) are satisfied in respect of a complex and subparagraph (1)(a)(ii) applies in respect of the complex, for the purposes of subsection 256.21(6) of the Act, the rebate under subsection 256.21(1) of the Act in respect of the complex, the amount of which is determined under subsection (4), is a prescribed rebate and that rebate may be assigned to the builder of the complex referred to in paragraph (1)(a).

Amount of rebate

(4) If the circumstances described in subsection (1) are satisfied in respect of a complex, for the purposes of subsection 256.21(1) of the Act, the amount of the rebate in respect of the complex under that subsection is

  • (a) 100% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 90% or more completed;
  • (b) 90% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 75% or more but less than 90% completed;
  • (c) 75% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 50% or more but less than 75% completed;
  • (d) 50% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 25% or more but less than 50% completed; or
  • (e) 25% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 10% or more but less than 25% completed.

Rebate for specified residential complex

58.1 (1) For the purposes of subsection 256.21(1) of the Act, the following circumstances are prescribed circumstances in respect of a specified residential complex:

  • (a) immediately before April 1, 2013, a builder of the specified residential complex situated in Prince Edward Island owns or has possession of the complex;
  • (b) the builder referred to in paragraph (a) had not, before April 1, 2013, transferred ownership or possession of the complex under an agreement of purchase and sale to any person who is not a builder of the complex;
  • (c) if the specified residential complex is not a residential condominium unit, the construction of the complex or, in the case of a substantial renovation, the last substantial renovation of the complex, is, immediately after March 2013, 10% or more completed;
  • (d) if the specified residential complex is a residential condominium unit that is being substantially renovated and the condominium complex in which the residential condominium unit is situated is not being substantially renovated, the last substantial renovation of the specified residential complex, is, immediately after March 2013, 10% or more completed; and
  • (e) if the specified residential complex is a residential condominium unit and the condominium complex in which the unit is situated is being constructed or substantially renovated, the construction of the condominium complex or, in the case of a substantial renovation, the last substantial renovation of the condominium complex, is, immediately after March 2013, 10% or more completed.

Prescribed property and person

(2) If the circumstances described in subsection (1) are satisfied in respect of a specified residential complex, for the purposes of subsection 256.21(1) of the Act, the complex is prescribed property and the builder of the complex is a prescribed person.

Exception — prescribed person

(3) If subsections 191(1) to (4) of the Act do not apply to a builder of a specified residential complex as a consequence of the application of any of subsections 191(5) to (7) of the Act, the builder is deemed never to have been a prescribed person under subsection (2) in respect of the complex for the purposes of subsection 256.21(1) of the Act.

Amount of rebate

(4) If the circumstances described in subsection (1) are satisfied in respect of a specified residential complex, for the purposes of subsection 256.21(1) of the Act, the amount of the rebate under that subsection is

  • (a) if the specified residential complex is not a residential condominium unit,
    • (i) 100% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the specified residential complex is, immediately after March 2013, 90% or more completed,
    • (ii) 90% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the specified residential complex is, immediately after March 2013, 75% or more but less than 90% completed,
    • (iii) 75% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the specified residential complex is, immediately after March 2013, 50% or more but less than 75% completed,
    • (iv) 50% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the specified residential complex is, immediately after March 2013, 25% or more but less than 50% completed, or
    • (v) 25% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the specified residential complex is, immediately after March 2013, 10% or more but less than 25% completed;
  • (b) if the specified residential complex is a residential condominium unit that is being substantially renovated and the condominium complex in which the residential condominium unit is situated is not being substantially renovated,
    • (i) 100% of the estimated provincial levy for the specified residential complex if the substantial renovation of the specified residential complex is, immediately after March 2013, 90% or more completed,
    • (ii) 90% of the estimated provincial levy for the specified residential complex if the substantial renovation of the specified residential complex is, immediately after March 2013, 75% or more but less than 90% completed,
    • (iii) 75% of the estimated provincial levy for the specified residential complex if the substantial renovation of the specified residential complex is, immediately after March 2013, 50% or more but less than 75% completed,
    • (iv) 50% of the estimated provincial levy for the specified residential complex if the substantial renovation of the specified residential complex is, immediately after March 2013, 25% or more but less than 50% completed, or
    • (v) 25% of the estimated provincial levy for the specified residential complex if the substantial renovation of the specified residential complex is, immediately after March 2013, 10% or more but less than 25% completed; or
  • (c) if the specified residential complex is a residential condominium unit and the condominium complex in which the unit is situated is being constructed or substantially renovated,
    • (i) 100% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the condominium complex in which the unit is situated is, immediately after March 2013, 90% or more completed,
    • (ii) 90% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the condominium complex in which the unit is situated is, immediately after March 2013, 75% or more but less than 90% completed,
    • (iii) 75% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the condominium complex in which the unit is situated is, immediately after March 2013, 50% or more but less than 75% completed,
    • (iv) 50% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the condominium complex in which the unit is situated is, immediately after March 2013, 25% or more but less than 50% completed, or
    • (v) 25% of the estimated provincial levy for the specified residential complex if the construction or last substantial renovation of the condominium complex in which the unit is situated is, immediately after March 2013, 10% or more but less than 25% completed.

Application for rebate

58.11 (1) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under this Division, must be filed before April 1, 2017.

Restriction

(2) If a person is the builder of a complex, the Minister shall pay a rebate in respect of the complex to the person under subsection 256.21(1) of the Act, the amount of which is determined under subsection 58.09(4) or 58.1(4), only if the Minister is satisfied, by a certificate, statement or other documentary evidence as the Minister may require, that the person is in good standing with respect to the payment of all taxes, and fees relating to the construction activities of the builder, imposed under an Act of the legislature of the province in which the residential complex is situated.

Rebate based on floor space

(3) In determining under subsection 58.1(4) the amount of a rebate payable to a person in respect of a residential complex, the estimated provincial levy for the complex must be determined based on the interior floor space of the complex if the person applies for the rebate before the day on which tax under Part IX of the Act becomes payable in respect of a supply of the complex by the person.

PART 11

APPLICATION

41. (1) Subsection 1(1) applies to the 2013 calendar year.

(2) Subsection 1(2) applies to the 2014 and subsequent calendar years.

42. Sections 2, 9, 10, 12, 13, 16, 27 and 30 of these Regulations and sections 58.07 to 58.11 of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by section 40, come into force, or are deemed to have come into force, on April 1, 2013.

43. Sections 3 and 4 apply for the purpose of determining a rebate, under section 259 of the Excise Tax Act, of a person for any claim period ending after March 31, 2013, except that the rebate is to be determined as if subsection 4(2) had not come into force for the purpose of determining a rebate of a person for the claim period of the person that includes April 1, 2013 in respect of

  • (a) an amount of tax that became payable by the person before April 1, 2013;
  • (b) an amount that is deemed to have been paid or collected by the person before April 1, 2013; or
  • (c) an amount that is required to be added in determining the person’s net tax as a result of
    • (i) a branch or division of the person becoming a small supplier division before April 1, 2013, or
    • (ii) the person ceasing to be a registrant before April 1, 2013.

44. Sections 5 to 7 apply for the purpose of determining the net tax of a registrant for reporting periods ending after March 2013, except that

  • (a) the registrant’s quick-method rate for the registrant’s reporting period that includes April 1, 2013 and that applies in respect of a supply is, in respect of consideration for the supply that is paid or becomes due before that day, the registrant’s quick-method rate for that period that would apply if section 5 did not come into force; and
  • (b) the registrant’s special quick-method rate for the registrant’s reporting period that includes April 1, 2013 and that applies in respect of a supply is, in respect of consideration for the supply that is paid or becomes due before that day, the registrant’s special quick-method rate for that period that would apply if section 7 did not come into force.

45. Section 8 applies to amounts that are required to be included in computing an individual’s income for the purposes of the Income Tax Act for the 2013 and subsequent taxation years, except that

  • (a) in respect of the 2013 taxation year, the reference in paragraph 2(c.1) of the Automobile Operating Expense Benefit (GST/HST) Regulations, as enacted by section 8, to “10%” is to be read as a reference
    • (i) to “8.25%” if the registrant is not a large business (as defined in subsection 236.01(1) of the Excise Tax Act) on December 31, 2013, and
    • (ii) to “5.63%” if the registrant is a large business (as defined in subsection 236.01(1) of the Excise Tax Act) on December 31, 2013;
  • (b) in respect of the 2014 to 2017 taxation years, the reference in paragraph 2(c.1) of those Regulations, as enacted by section 8, to “10%” is to be read as a reference to “6.5%” if the registrant is a large business (as defined in subsection 236.01(1) of the Excise Tax Act) on December 31 of the taxation year;
  • (c) in respect of the 2018 taxation year, the reference in paragraph 2(c.1) of those Regulations, as enacted by section 8, to “10%” is to be read as a reference to “7.2%” if the registrant is a large business (as defined in subsection 236.01(1) of the Excise Tax Act) on December 31, 2018;
  • (d) in respect of the 2019 taxation year, the reference in paragraph 2(c.1) of those Regulations, as enacted by section 8, to “10%” is to be read as a reference to “7.9%” if the registrant is a large business (as defined in subsection 236.01(1) of the Excise Tax Act) on December 31, 2019;
  • (e) in respect of the 2020 taxation year, the reference in paragraph 2(c.1) of those Regulations, as enacted by section 8, to “10%” is to be read as a reference to “8.6%” if the registrant is a large business (as defined in subsection 236.01(1) of the Excise Tax Act) on December 31, 2020; and
  • (f) in respect of the 2021 taxation year, the reference in paragraph 2(c.1) of those Regulations, as enacted by section 8, to “10%” is to be read as a reference to “9.3%” if the registrant is a large business (as defined in subsection 236.01(1) of the Excise Tax Act) on December 31, 2021.

46. Section 11 is deemed to have come into force on September 1, 2011.

47. Sections 14 and 15 apply to any supply made

  • (a) on or after February 1, 2013; and
  • (b) after November 8, 2012 and before February 1, 2013 unless any part of the consideration for the supply becomes due or is paid before February 1, 2013.

48. Section 20 is deemed to have come into force on November 9, 2012.

49. Sections 21 to 26, 28, 29, 31 and 32 apply in respect of any reporting period of a person that ends on or after April 1, 2013, except that no person is liable to a penalty the amount of which is determined under the Electronic Filing and Provision of Information (GST/HST) Regulations in respect of amounts prescribed under those Regulations in respect of Prince Edward Island and to be reported in a specified return that is filed before the day that is the later of April 1, 2013 and the day on which these Regulations are first published in the Canada Gazette

50. (1) Subparagraphs 42(d.1)(i) to (iii) of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by section 33, apply for the purpose of determining a rebate in respect of a supply, to a particular individual referred to in subsection 254.1(2) of the Excise Tax Act, of a building or part of it in which a residential unit forming part of a residential complex is situated if the supply of the complex referred to in paragraph 254.1(2)(d) of that Act is deemed under section 191 of that Act to have been made on or after April 1, 2013, unless no tax is payable under subsection 165(2) of that Act in respect of the supply referred to in that paragraph.

(2) Subparagraphs 42(d.1)(iv) and (v) of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by section 33, apply for the purpose of determining a rebate in respect of a supply, to a particular individual referred to in subsection 254.1(2) of the Excise Tax Act, of a building or part of it in which a residential unit forming part of a residential complex is situated if the supply of the complex referred to in paragraph 254.1(2)(d) of that Act is deemed under section 191 of that Act to have been made on or after the later of April 1, 2013 and the day on which these Regulations are first published in the Canada Gazette, unless no tax is payable under subsection 165(2) of that Act in respect of the supply referred to in that paragraph.

51. (1) Subparagraphs 44(d.1)(i) to (iii) of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by section 34, apply for the purpose of determining a rebate in respect of a supply, by a cooperative housing corporation to a particular individual, of a share of the capital stock of the corporation if the rebate application is filed on or after April 1, 2013, unless the corporation paid no tax under subsection 165(2) of the Excise Tax Act in respect of the supply referred to in paragraph 255(2)(a) of that Act of the complex to the corporation.

(2) Subparagraphs 44(d.1)(iv) and (v) of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by section 34, apply for the purpose of determining a rebate in respect of a supply, by a cooperative housing corporation to a particular individual, of a share of the capital stock of the corporation if the rebate application is filed on or after the later of April 1, 2013 and the day on which these Regulations are first published in the Canada Gazette, unless the corporation paid no tax under subsection 165(2) of the Excise Tax Act in respect of the supply referred to in paragraph 255(2)(a) of that Act of the complex to the corporation.

52. Sections 37 and 38 are deemed to have come into force on June 18, 2009.

53. Sections 58.01 to 58.06 of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by section 40, are deemed to have come into force on November 8, 2012.

SCHEDULE
(Section 10)

SCHEDULE 4.1
(Section 1)

PRINCE EDWARD ISLAND ITEMS
  1. A printed book or an update of a printed book
  2. An audio recording all or substantially all of which is a spoken reading of a printed book
  3. A bound or unbound printed version of scripture of any religion
  4. A composite property
  5. Children’s clothing
  6. Children’s footwear
  7. Qualifying heating oil

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

On April 18, 2012, the Government of Prince Edward Island (PEI) announced its intention to adopt the Harmonized Sales Tax (HST) at a rate of 14%, to be composed of a 5% federal component and a 9% provincial component, with an effective date of April 1, 2013. This was confirmed when, on November 26, 2012, a Comprehensive Integrated Tax Coordination Agreement (Canada-PEI CITCA) was signed between the Government of Canada and the Government of PEI providing the necessary framework for the implementation of the HST in PEI.

In order to facilitate the transition to the HST, PEI released proposed transitional rules and input tax credit recapture rules on November 8, 2012. These rules generally specify the tax rate that should be applied for transactions that straddle the April 1, 2013, implementation date. Additional parameters related to PEI’s adoption of the HST were also released by PEI, such as point-of-sale rebates and public service body rebates on November 27, 2012. With the passage of the Provincial Choice Tax Framework Act on December 15, 2009, Parliament approved mechanisms to facilitate the application of the harmonized value-added tax system by way of regulations. Amendments to existing goods and services tax (GST)/HST regulations are therefore required in order to implement PEI’s decision to adopt the HST. Proposed amendments to the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations announced on November 8, 2012, by the Government of PEI are anticipated to be submitted in the near future.

Objectives

The Regulations Amending Various GST/HST Regulations (Prince Edward Island) [the Regulations] amend existing GST/HST regulations made under the Excise Tax Act (the Act) to formalize and give legal effect to PEI’s decision to adopt the HST. Housekeeping amendments to existing GST/HST regulations are also included.

Description

The Regulations contain rules relating to the harmonized value-added tax system. Specifically, the Regulations include amendments to the following regulations:

  • —Games of Chance (GST/HST) Regulations;
  • —Taxes, Duties and Fees (GST/HST) Regulations;
  • —Public Service Body Rebate (GST/HST) Regulations;
  • —Streamlined Accounting (GST/HST) Regulations;
  • —Automobile Operating Expense Benefit (GST/HST) Regulations;
  • —Deduction for Provincial Rebate (GST/HST) Regulations;
  • —Returnable Beverage Container (GST/HST) Regulations;
  • —New Harmonized Value-added Tax System Regulations;
  • —Electronic Filing and Provision of Information (GST/HST) Regulations;and
  • —New Harmonized Value-added Tax System Regulations, No. 2.
Games of Chance (GST/HST) Regulations

These Regulations set out special rules under which provincial gaming authorities (e.g. provincial lottery and casino corporations) calculate their GST/HST remittances. These calculations are based upon the 5% federal component and the various respective provincial components of the HST.

These Regulations are amended so that the GST/HST remittances of provincial gaming authorities take into account the change in the automobile operating expense benefit rates related to PEI’s adoption of the HST [see description of amendments to the Automobile Operating Expense Benefit (GST/HST) Regulations below] and reflect the 9% provincial component of the HST in PEI for 2014 and subsequent calendar years. The amendments also provide for a transitional rate for the 2013 calendar year since PEI is only adopting the HST as of April 1, 2013.

Taxes, Duties and Fees (GST/HST) Regulations

These Regulations exclude certain provincial taxes from the GST/HST base. The main exclusions are provincial land transfer taxes, general provincial sales taxes and any specific ad valorem provincial tax that is imposed on a property or service in lieu of a general provincial sales tax.

These Regulations are amended to remove the general provincial sales tax in PEI from the list of general provincial sales taxes that are excluded from the GST/HST base consequential to elimination of the general provincial sales tax in PEI and the implementation of the HST in PEI, effective April 1, 2013.

Public Service Body Rebate (GST/HST) Regulations

Under the GST/HST, public service bodies (PSBs) such as hospitals, schools, universities, public colleges, municipalities, charities and substantially government-funded non-profit organizations are entitled to claim full or partial rebates of the GST/HST paid on their purchases of property and services for use in non-commercial activities. The GST/HST legislation sets out the rules relating to these rebates and provides the authority to prescribe the rebate rates applicable to the provincial component of the HST for each class of PSB, the property and services in respect of which rebates are disallowed and rules for calculating the rebates. These Regulations contain these prescribed rates and rules.

Under the HST framework, participating provinces have the flexibility to determine the PSB sectors to which rebates are to be provided and the respective provincial rebates rates. Consequential to the different PSB rebates rates, these Regulations also provide rules for determining the appropriate PSB rebates of the provincial component of the HST for a PSB that carries on more than one PSB activity or that is resident in, and carries on activities in, more than one province.

These Regulations are amended to implement PSB rebates of the provincial component of the HST in PEI that were announced by PEI on November 27, 2012, and that are set out in the Canada-PEI CITCA. In particular, a rebate at a rate of 35% of the provincial component of the HST is generally available to charities and qualifying non-profit organizations. A housekeeping amendment is also made to remove an obsolete reference.

Streamlined Accounting (GST/HST) Regulations

These Regulations provide small businesses and eligible PSBs optional simplified methods (i.e. a Quick or Special Quick Method) of calculating their GST/HST remittances. These methods allow the business or PSB to remit an amount of tax that is a percentage (the “remittance rate”) of its eligible GST/HST-included sales. This allows the entity to avoid having to keep track of the GST/HST paid on purchases and collected on sales separately. Certain transactions are excluded from these rules (e.g. the sale or purchase of real property). In such cases, the tax must be accounted for separately under the normal GST/HST rules.

These Regulations are amended to provide for new remittance rates under the streamlined accounting methods, consequential to the implementation of the HST in PEI.

Automobile Operating Expense Benefit (GST/HST) Regulations

These Regulations prescribe the rates of GST/HST applicable to the value of an automobile operating expense benefit, which is the personal portion of automobile operating expenses paid by employers or corporations and reported as income for income tax purposes by an employee or shareholder. The GST/HST is applicable to the benefit and the employer or corporation must account for and remit the GST/HST at a prescribed rate. In general, technical amendments to these Regulations are necessary as a consequence of the rate flexibility for the provincial component of the HST afforded to participating provinces under the harmonized value-added tax system.

These Regulations are amended, consequential to the implementation of the HST in PEI, to account for the 14% HST rate applicable in PEI. The prescribed rate applicable to automobile operating expense benefits is lower than the 14% HST rate in PEI to reflect the fact that a portion of the total automobile operating expense benefit reported for income tax purposes relates to GST/HST exempt expenses such as insurance. Special prescribed rates also apply to the automobile operating expense benefit of an employee or shareholder in PEI where the employer or corporation, as a large business, is required to recapture input tax credits in respect of fuel expenses.

Deduction for Provincial Rebate (GST/HST) Regulations

Participating provinces have the flexibility of designating a limited number of point-of-sale rebates of the provincial component of the HST. These Regulations facilitate the crediting, at the point of sale, of a rebate of the provincial component of the HST on items that the participating provinces provide to purchasers of those items.

These Regulations are amended to put into effect the decisions of PEI to provide point-of-sale rebates of the provincial component of the HST on certain designated items that are to be prescribed under provincial regulations. These rebates were announced by PEI on November 27, 2012, and encompass books, children’s clothing and footwear, and heating oil. Federal regulations are required to facilitate exercise of these rebates at the point of sale (e.g. to allow the vendor to refund the purchaser directly at the point of sale). The Regulations add new items that are eligible for a point-of-sale rebate of the provincial component of the HST in PEI.

Returnable Beverage Container (GST/HST) Regulations

To simplify compliance for businesses, deposits on beverage containers that are refundable to the consumer are excluded from the GST/HST base under the Act. Non-refundable levies or handling charges are subject to tax on the same basis as the beverage. In some provinces, under provincially legislated “half-back” systems, only a portion of the deposit on certain beverage containers is refundable and the deposits are treated as tax-included amounts. The Act provides special rules in the case where a deposit is charged under a prescribed act of a province when a taxable beverage is sold in those provinces with a “half-back” system. In these provinces, to avoid the complexity of all retailers having to determine the amount of tax for the non-refundable portion of the deposit to calculate their GST/HST remittances and input tax credits, the special rules require only the first supplier in the distribution chain who imposes the deposit to account for and remit tax on the taxable non-refundable portion of the deposit. These Regulations prescribe the applicable provincial acts.

These Regulations are amended to prescribe the relevant provincial act for PEI, consequential to the implementation of the HST in PEI, effective April 1, 2013. These Regulations are also amended to make a housekeeping amendment to update an outdated reference.

New Harmonized Value-added Tax System Regulations

These Regulations contain various rules that relate to the harmonized value-added tax system under the Act. These Regulations are amended to prescribe PEI to be an HST participating province with a tax rate for the provincial component of the HST at 9% (in addition to the 5% federal component) and to set out the general transitional rules for the introduction of the HST in PEI by specifying whether, and to what extent, the provincial component of the HST applies to supplies of property and services that straddle the April 1, 2013, implementation date.

The amendments to these Regulations implement general transitional rules, released by PEI on November 8, 2012, to facilitate the transition from PEI’s existing retail sales tax to the HST by specifying when the provincial component of the HST applies to these straddling transactions. The transitional rules vary depending on the type of property or service supplied. For example, as of February 1, 2013, businesses are generally required to charge and collect the HST at a rate of 14% in PEI in respect of consideration for a service, leased property or a membership that relates to the portion of the service that is to be performed, or the portion of the lease or membership period that is to occur, on or after April 1, 2013. For supplies of goods by way of sale, businesses are generally required to charge and collect the HST at a rate of 14% in PEI on goods that are delivered on or after April 1, 2013. For goods that are delivered before April 1, 2013, the 9% provincial component of the HST does not apply.

These Regulations are also amended to implement housekeeping amendments, such as ensuring consistency between both official versions of these Regulations.

Electronic Filing and Provision of Information (GST/HST) Regulations

These Regulations generally provide for mandatory filing of GST/HST returns under the Act by electronic transmission for certain registrants and penalties for failing to file by electronic transmission or failing to report certain amounts specified by way of regulations. The specified amounts include amounts relating to recaptured input tax credits on the provincial component of the HST and information related to certain provincial transitional housing measures. These Regulations also provide rules and enforcement mechanisms to ensure that sufficient and accurate information is provided by the GST/HST registrants to enable the government to administer the GST/HST and to allocate revenues between the federal government and the participating provinces under the HST.

These Regulations are amended to reflect the decision by PEI to join the harmonized value-added tax system, effective April 1, 2013. These amendments were previously announced by PEI and provide for rules similar to those in respect of the adoption of the HST by other provinces. In particular, the rules setting out which persons are required to file GST/HST returns by electronic transmission are amended to include builders that are affected by transitional housing measures announced by PEI on November 8, 2012 (see New Harmonized Value-added Tax System Regulations, No. 2 below). In addition, these Regulations are amended to ensure that in general, all GST/HST registrants that are required to recapture input tax credits for the provincial portion of the HST on certain inputs in PEI are also required under these Regulations to file electronically. Additionally, the rules related to which amounts are required to be reported are amended to include amounts relating to recaptured input tax credits on the provincial component of the HST in PEI and information related to the transitional housing measures in PEI.

New Harmonized Value-added Tax System Regulations, No. 2

These Regulations contain various rules with respect to the harmonized value-added tax system under the Act including transitional real property rules, input tax credit recapture rules and HST self-assessment and rebate rules as well as other rules to ensure that the provincial component of the HST applies properly as a consequence of provincial flexibility allowed in establishing the rate of that component.

These Regulations are amended to reflect the decision by PEI to join the harmonized value-added tax system, effective April 1, 2013. In particular, these Regulations are amended, as announced by PEI on November 8, 2012, to specify when the provincial component of the HST applies to real property transactions that straddle the implementation date of April 1, 2013.

The amendments generally provide that sales of newly constructed or substantially renovated homes are not subject to the provincial component of the HST where written agreements are entered into on or before November 8, 2012 (i.e. “grandparented” agreements). Since the provincial component of the HST does not apply, builders of grandparented homes generally are required to remit a transitional tax adjustment that approximates the amount of provincial sales tax (PST) that would have been embedded in the price of the home, on average, under the PST.

The amendments also provide for a transitional housing rebate for the PST embedded in the price of new housing. The rebate is allowed in order to provide relief where a new home subject to the HST also had PST embedded in the price. For example, this would be the case for homes to which HST applies where the PST had been charged on building materials used in the construction of the home prior to the implementation of the HST in PEI. Under these Regulations, the transitional housing rebate can be paid to the builder of the home in cases where the builder pays or credits this rebate to the purchaser and the purchaser agrees to assign this rebate to the builder. This simplification measure allows homebuyers to receive the benefit of the rebate at the time of their home purchase rather than having to file a rebate application with the Canada Revenue Agency.

In addition, these Regulations are amended to implement the input tax credit recapture rules announced by PEI on November 8, 2012. The Canada-PEI CITCA provides for PEI temporarily requiring large businesses (generally those making annual taxable supplies in Canada worth more than $10 million and certain financial institutions) to repay or “recapture” input tax credits otherwise available to them in respect of the provincial component of the HST payable on certain property and services acquired by those businesses. PEI has announced that, between April 1, 2013, and March 31, 2021, large businesses will be required to recapture all or a portion of the provincial portion of input tax credits attributable to the acquisition in, or the bringing into, PEI of the following property and services:

  • road vehicles that weigh less than 3 000 kg and motive fuel (other than diesel fuel) for use in those vehicles;
  • energy (e.g. electricity and natural gas), other than energy used directly in the production of goods;
  • telecommunication services; and
  • meals and entertainment.

After the first five years, during which time these input tax credits would be fully recaptured, the proportion of input tax credits that must be recaptured will be decreased over the following three years, after which the input tax credits could be fully claimed without a requirement to repay (except for meals and entertainment, where only 50% will continue to be claimable as input tax credits).

Finally, these Regulations are amended by adding a reference to PEI’s provincial tax on private sales of vehicles to the list of “specified provincial taxes” prescribed under these Regulations, which is used to establish the value of a vehicle for the purposes of applying the PEI component of the HST when a vehicle is brought into PEI from outside the province. These Regulations are also amended to implement housekeeping amendments, such as ensuring consistency between both official versions of these Regulations.

“One-for-One” Rule

The Regulations address tax or tax administration and are carved out from the “One-for-One” Rule.

Small business lens

The small business lens does not apply to the Regulations as no disproportionate impact on small businesses is expected.

Consultation

The Regulations were developed in consultation with the Government of PEI. The Regulations are designed to reflect previous announcements, including HST announcements of proposed rules by PEI on November 8, 2012, and November 27, 2012.

Rationale

The Regulations are required as a result of the adoption of the HST in PEI, effective April 1, 2013. The Regulations formalize and give legal effect to previously announced amendments.

Contacts

  • Yuki Bourdeau
    Sales Tax Division
    Department of Finance
    140 O’Connor Street
    Ottawa, Ontario
    K1A 0G5
    Telephone: 613-996-4222

  • Marcel Boivin
    Excise and GST/HST Rulings Directorate
    Canada Revenue Agency
    320 Queen Street
    Ottawa, Ontario
    K1A 0L5
    Telephone: 613-954-7959