Games of Chance (GST/HST) Regulations

Link to law: http://laws-lois.justice.gc.ca/eng/regulations/SOR-91-28/FullText.html

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Games of Chance (GST/HST) Regulations

SOR/91-28EXCISE TAX ACT
Registration 1990-12-18
Games of Chance (GST/HST) Regulations
P.C. 1990-2737 1990-12-18His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 277(1)Footnote * of the Excise Tax Act, is pleased hereby to make the annexed Regulations prescribing games of chance and prescribing registrants making supplies of a right to participate in games of chance.
Return to footnote *S.C. 1990, c. 45, s. 121 [Repealed, SOR/2011-56, s. 8]
Previous Version

Interpretation

Definition of Act
2 In these Regulations, Act means the Excise Tax Act.
SOR/2011-56, s. 9.
Previous Version

PART 1 Prescribed Registrants

[SOR/98-440, s. 3]
3 The following persons are prescribed registrants for the purposes of subsection 188(5) of the Act:

(a) the Atlantic Lottery Corporation;
(b) the British Columbia Lottery Corporation;
(c) the Manitoba Liquor and Lotteries Corporation;
(d) the Ontario Lottery and Gaming Corporation;
(e) la Société des loteries et courses du Québec;
(f) the Western Canada Lottery Corporation;
(g) the Interprovincial Lottery Corporation;
(h) the Alberta Gaming and Liquor Commission;
(i) the Saskatchewan Liquor and Gaming Authority;
(j) the Saskatchewan Gaming Corporation;
(k) the New Brunswick Lotteries and Gaming Corporation;
(l) the Nova Scotia Gaming Corporation; and
(m) a corporation that is a wholly-owned subsidiary of a registrant referred to in any paragraph of this section (other than paragraph (g) and this paragraph) and that is referred to in section 15.

SOR/98-440, s. 4;
SOR/2011-56, s. 10;
SOR/2014-248, s. 5.

Previous Version

PART 2 Prescribed Games of Chance

Marginal note:Prescribed games of chance

4 A game of chance that is conducted by a person referred to in section 3 is a prescribed game of chance for the purposes of paragraph 1(i) of Part V.1 of Schedule V to the Act and section 5.1 of Part VI of that Schedule.
SOR/98-440, s. 5.

PART 3 Net Tax of Prescribed Registrants

Interpretation

Marginal note:Definitions

5 (1) The definitions in this subsection apply in this Part.

casino operating service
service d’exploitation de casino

casino operating service means a service of managing, administering and carrying on the day-to-day operations of a provincial gaming authority’s gaming activities that are connected with a casino of the authority. (service d’exploitation de casino)

charitable proceeds from Superstar Bingo
produit du bingo Superstar

charitable proceeds from Superstar Bingo means payments made by the Ontario Lottery Corporation to the Provincial Bingo Charitable Activities Association where the payments are equal to a percentage of the proceeds from the operation of the bingo game known as Superstar Bingo conducted by the Corporation and the Association receives the payments as agent for other non-profit organizations or charities. (produit du bingo Superstar)

consideration
contrepartie

consideration, in respect of a supply of a service (other than a service referred to in subsection (2)) made to a provincial gaming authority by a distributor of the authority, does not include a reimbursement. (contrepartie)

distributor
distributeur

distributor has the meaning assigned by subsection 188.1(1) of the Act. (distributeur)

face value
valeur nominale

face value of a right to play or participate in a game of chance that is evidenced by a ticket, card or other printed device, or of such a device, means the amount shown on the device as its price inclusive of tax under Part IX of the Act. (valeur nominale)

gaming activity
activité de jeu

gaming activity of a provincial gaming authority means a commercial activity of the authority except to the extent to which the activity involves the making of non-gaming supplies by the authority and includes anything done by the authority in connection with the acquisition, establishment, disposition or termination of the commercial activity. (activité de jeu)

imputed input tax credit
crédit de taxe sur les intrants imputé

imputed input tax credit, in respect of property or a service for a reporting period of a provincial gaming authority, means the amount that would be the input tax credit in respect of the property or service for the period if the amount in respect of the property or service that the authority is required under any of subparagraphs (d)(i) to (iii) of the description of A1 in subsection 7(7) to include in determining the imputed tax payable by the authority for the period were tax that became payable by the authority during the period in respect of that property or service. (crédit de taxe sur les intrants imputé)

instant win game
loterie instantanée

instant win game means a game of chance the right to play or participate in which is evidenced by a ticket, card or other printed device that contains sufficient information to ascertain, without reference to any other information, whether a holder of the device is entitled to receive a prize or winnings. (loterie instantanée)

instant win ticket
billet de loterie instantanée

instant win ticket means a ticket, card or other printed device that is or is evidence of a right to play or participate in an instant win game. (billet de loterie instantanée)

lease interval
période de location

lease interval, in respect of a supply by way of lease of property, means a period to which a payment forming part of the consideration for the supply is attributable and that is all or part of the period during which possession or use of the property is provided under the agreement for the supply. (période de location)

manufacturing
fabrication

manufacturing, in respect of property, includes the production, processing or packaging of the property. (fabrication)

non-gaming activity
activité non liée au jeu

non-gaming activity of a provincial gaming authority means a commercial activity of the authority except to the extent to which the activity is a gaming activity of the authority. (activité non liée au jeu)

non-gaming reimbursement
montant de remboursement non lié au jeu

non-gaming reimbursement means a reimbursement paid or payable by a provincial gaming authority that is in respect of an expense incurred by a distributor of the authority and that is part of the cost to the authority of making non-gaming supplies. (montant de remboursement non lié au jeu)

non-gaming supply
fourniture non liée au jeu

non-gaming supply means a supply other than

(a) a supply of a service of accepting a bet on a game of chance, race or other event or occurrence;
(b) a supply of a right to play or participate in a game of chance, or a ticket, card or other printed device that is evidence of such a right, made to a distributor of a provincial gaming authority;
(c) a supply referred to in paragraph 188.1(4)(b) of the Act that, but for that paragraph, would be a supply by a provincial gaming authority to a distributor of the authority;
(d) a supply of a prize in kind; and
(e) a promotional supply. (fourniture non liée au jeu)

non-taxable reimbursement
montant de remboursement non taxable

non-taxable reimbursement means a reimbursement paid or payable to a distributor of a provincial gaming authority in respect of an expense incurred by the distributor in connection with supplying a casino operating service to the authority, where the expense is

(a) consideration (other than interest) for a supply made to the distributor (other than a supply that would be deemed under subsection 188.1(4) of the Act not to be a supply if it were made to the authority instead of to the distributor) that is

(i) an exempt supply of personal property or a service,
(ii) a zero-rated supply, or
(iii) a taxable supply all or part of the consideration for which is, due to the application of section 166 of the Act, not included in calculating the tax payable in respect of the supply; or

(b) property tax payable by the distributor. (montant de remboursement non taxable)

period cost
coût imputable

period cost for a particular period, in respect of a supply to a provincial gaming authority of tangible personal property or real property made by way of lease, means the total of

(a) the total of all amounts each of which is the portion of the capital cost of the property to the supplier that is reasonably allocated to a lease interval for which a payment forming part of the consideration for the supply becomes due in the particular period or is paid in the particular period without having become due;
(b) the total of all amounts each of which is an amount not included in paragraph (a) that is a cost to the supplier that is reasonably attributable to the making of the supply for a lease interval referred to in that paragraph other than, in the case of a supply to which section 16 applies, the portion, if any, of that cost that is deducted from the value of the consideration for the supply in determining under that section the amount deemed to be the tax payable in respect of the supply;
(c) any capital loss on the disposition of the property by the supplier that is recovered from the authority during the particular period; and
(d) an amount that, at any time in the particular period, the supplier recognizes in the supplier’s books of account as an unrecoverable loss, being the amount by which the unamortized capital cost of the property exceeds its fair market value at that time. (coût imputable)

prize in kind
prix en nature

prize in kind means property or a service that is given as a prize or winnings in a game of chance. (prix en nature)

promotional supply
fourniture de promotion

promotional supply, by a provincial gaming authority, means

(a) a supply of property (other than a supply by way of sale of capital property of the authority) made by the authority for no consideration or for nominal consideration; or

(b) a supply by way of sale of

(i) a service, or intangible personal property, that was purchased by the authority, or
(ii) tangible personal property (other than capital property of the authority),

made by the authority for consideration that is less than the basic cost to the authority of the property or service. (fourniture de promotion)

property tax
impôt foncier

property tax means a tax imposed by a municipality or other local authority on real property or in respect of the ownership, occupation or use of real property. (impôt foncier)

provincial gaming authority
administration provinciale de jeux et paris

provincial gaming authority means a registrant that is prescribed by section 3, other than paragraph 3(g) or (m). (administration provinciale de jeux et paris)

reimbursement
montant de remboursement

reimbursement means an amount of consideration (as defined in subsection 123(1) of the Act) that

(a) is paid or payable by a provincial gaming authority to a distributor of the authority as an allowance or reimbursement in respect of an expense incurred or to be incurred by the distributor otherwise than as an agent of the authority; and
(b) is invoiced or charged to the authority separately from amounts that are not in respect of specific expenses incurred or to be incurred by the distributor. (montant de remboursement)

right
droit

right of a provincial gaming authority has the meaning assigned by subsection 188.1(1) of the Act. (droit)

Marginal note:Basic cost

(2) For the purposes of this Part, the basic cost to a provincial gaming authority of personal property or a service is equal to

(a) in the case of food or a beverage prepared by the authority, the total of all consideration paid or payable by the authority to purchase the food or beverage and the ingredients used in its preparation, to the extent that the consideration is a cost to the authority of the prepared food or beverage;

(b) in the case of particular tangible personal property (other than food or a beverage) manufactured in whole or in part by or for the authority, the total of all consideration paid or payable by the authority to purchase the following property and services to the extent that the consideration is a cost to the authority of the particular property:

(i) tangible personal property incorporated into or forming a constituent or component part of the particular property,
(ii) tangible personal property consumed or expended directly in the process of manufacturing the particular property, and
(iii) services of manufacturing the particular property in whole or in part;

(c) in the case of tangible personal property that is purchased by the authority and is not further manufactured by or for the authority, the consideration paid or payable by the authority to purchase the property; and
(d) in the case of intangible personal property or a service, the consideration paid or payable by the authority to purchase the property or service.

Exclusion from promotional supply
(2.1) Despite the definition promotional supply in subsection (1), a supply of a particular property or service made by a provincial gaming authority is not included in that definition if the authority would, in the absence of this subsection, be entitled to include, in determining a total for A2 in subsection 7(7), or a total for B in section 8, all or a portion of an input tax credit in respect of

(a) the particular property or service;
(b) a service of manufacturing the particular property; or
(c) other tangible personal property acquired, imported or brought into a participating province by the authority for use as an ingredient in preparing the particular property or for the purpose of being incorporated into, forming a constituent or component part of, or being consumed or expended directly in the process of manufacturing, the particular property.

Marginal note:Reduction in consideration

(2.2) For the purpose of the definition promotional supply in subsection (1), if, in making a supply of property or a service, a provincial gaming authority

(a) accepts from the recipient of the supply a coupon, a voucher, a receipt, a ticket, a device that, without regard to section 181.2 of the Act, is a gift certificate or any other device that may be exchanged for the property or service or that entitles the recipient to a reduction of, or a discount on, the price of the property or service (the amount of the reduction or discount is in this subsection referred to as the “coupon value”), or
(b) applies, as a discount on, or credit against, the price of the property or service, an amount (in this subsection referred to as the “credit value”) that has been credited in favour of the recipient by the authority,

the consideration for the supply is deemed to be equal to the amount that would, without regard to section 181 of the Act, be the consideration for the supply less the coupon value or credit value, as the case may be.

Marginal note:Exception

(2.3) Subsection (2.2) does not apply in respect of a supply of property or a service by a provincial gaming authority if

(a) subsection 181(2) of the Act applies in respect of the supply;
(b) the consideration for the supply is reduced in circumstances in which subsection 232(2) of the Act applies; or
(c) the property or service is given in exchange, or the reduction, discount or credit is provided, in lieu of refunding or reducing all or part of the consideration for a non-gaming supply by the authority of another property or service.

Marginal note:Accepting and making a bet

(3) For the purposes of this Part, the sale of a right to play or participate in a game of chance conducted by a provincial gaming authority to a person other than a distributor of the authority is deemed to be a supply of a service of accepting a bet on the game in an amount equal to the selling price of the right, and the purchase of the right is deemed to be the betting of that amount on the game.

SOR/98-440, s. 6;
SOR/2011-56, s. 11.

Previous Version

Net Tax of Provincial Gaming Authority

Marginal note:Total net tax

6 The net tax of a provincial gaming authority for a reporting period of the authority is the positive or negative amount determined by the formula

A + B
where


is the authority’s net tax for the period attributable to gaming activities determined in accordance with section 7; and


is the authority’s positive or negative net tax for the period attributable to non-gaming activities determined in accordance with section 8.

SOR/98-440, s. 6.

Marginal note:Net tax attributable to gaming activities

7 (1) A provincial gaming authority’s net tax attributable to gaming activities for a reporting period of the authority is the amount determined by the formula

A - B
where


is the total of all amounts that the authority is required under subsection (2) or (3) to add in determining its net tax for the period; and


is the total of all credits of the authority for the period in respect of prizes or winnings determined under subsection (4) or (5) and the authority’s additional credit in respect of gaming activities for the period determined under subsection (6).

Marginal note:Bet received

(2) Where a person bets an amount with a provincial gaming authority (other than by purchasing an instant win ticket from a distributor of the authority), the authority shall, in determining its net tax attributable to gaming activities for the reporting period in which it becomes ascertainable whether an amount is payable as a prize or winnings in respect of the bet, add the amount determined by the formula

(A/B) × (C - D)
where


is
(a) if the person placed the bet in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and
(b) in any other case, the rate set out in subsection 165(1) of the Act;


is the total of 100% and the percentage determined for A;


is the total amount that is given by the person in respect of the bet, including any amounts payable by the person in respect of the bet as or on account of tax under Part IX of the Act or under an Act of the legislature of a province; and


is the amount of any tax payable under an Act of the legislature of a province by the person in respect of the bet.

Marginal note:Supply of instant win ticket

(3) Where a provincial gaming authority has delivered or agreed to deliver an instant win ticket to a distributor of the authority and, during a reporting period of the authority, the distributor pays or becomes liable to pay an amount in respect of the ticket to the authority, the authority shall, in determining its net tax attributable to gaming activities for the period, add the amount determined by the formula

(A/B) × (C - D)
where


is
(a) if the instant win ticket was or is to be delivered to the distributor in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and
(b) in any other case, the rate set out in subsection 165(1) of the Act;


is the total of 100% and the percentage determined for A;


is the face value of the ticket, including any amounts payable by the distributor in respect of the ticket as or on account of tax under an Act of the legislature of a province; and


is the amount of any tax payable under an Act of the legislature of a province by the distributor in respect of the ticket.

Marginal note:Prizes and winnings

(4) A credit of a provincial gaming authority for a reporting period of the authority in respect of an amount of money that the authority becomes liable, during the period, to pay as a prize or winnings in a game of chance conducted by the authority (other than a prize or winnings in respect of a bet made by purchasing an instant win ticket from a distributor of the authority) is the amount determined by the formula

(A/B) × C
where


is
(a) if the bet in respect of which the prize or winnings becomes payable was placed in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and
(b) in any other case, the rate set out in subsection 165(1) of the Act;


is the total of 100% and the percentage determined for A; and


is the amount payable as a prize or winnings.

Marginal note:Prize on instant win ticket

(5) A credit of a provincial gaming authority for a reporting period of the authority in respect of a prize or winnings in respect of an instant win ticket of a particular kind that the authority has delivered or agreed to deliver to a distributor of the authority and in respect of which the distributor pays or becomes liable to pay, during the period, an amount to the authority is the amount determined by the formula

(A/B) × C
where


is
(a) if the instant win ticket was or is to be delivered to the distributor in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and
(b) in any other case, the rate set out in subsection 165(1) of the Act;


is the total of 100% and the percentage determined for A; and


is the expected value, determined on the basis of mathematical probability, of the prize or winnings in respect of each instant win ticket of that kind supplied by the authority.

Marginal note:Additional credit

(6) A provincial gaming authority’s additional credit in respect of gaming activities for a reporting period of the authority is the amount determined by the formula

A - B - C
where


is the total of all amounts each of which is an amount that the authority is required, under subsection (2) or (3), to add in determining its net tax for the period;


is the total of all amounts each of which is a credit of the authority in respect of a prize or winnings for the period determined under subsection (4) or (5); and


is the imputed tax payable by the authority on gaming expenses for the period determined under subsection (7).

Marginal note:Imputed tax on gaming expenses

(7) The imputed tax payable by a provincial gaming authority on gaming expenses for a particular reporting period of the authority is the amount determined by the formula

A + B + C + D + E
where


is the amount determined by the formula
A1 - A2
where

A1 
is the total of all amounts each of which is
(a) an amount of tax (other than tax that is deemed under subsection 206(2) or (3) of the Act to have been paid or that is calculated on a reimbursement) that became payable during the particular period, or that was paid during the particular period without having become payable, by the authority in respect of property or a service (other than a casino operating service or a prize in kind) that was acquired or imported by the authority, (a.1) twice the amount determined under section 13 for the particular period as the imputed tax payable by the authority in respect of expenses incurred by the Interprovincial Lottery Corporation,
(b) an amount of tax that the authority is deemed to have collected during the period under subsection 206(5) of the Act,
(b.1) an amount (other than an amount described in subparagraph (d)(ii)) of tax in respect of a supply deemed under subsection 143(1) of the Act to have been made outside Canada (other than a supply described in subsection 178.8(2) of the Act) that would have become payable by the authority during the particular period if the supply had been made in Canada by a registrant,

(c) the total of all amounts each of which is determined by the formula

A3 × A4
where

A3 
is a reimbursement (other than a non-gaming reimbursement) that became payable during the particular period, or that was paid during the particular period without having become payable, by the authority to a distributor of the authority, other than
(i) a non-taxable reimbursement,
(ii) a reimbursement of the cost to the distributor of a right to play or participate in a game of chance given away free of charge by the distributor,
(iii) a reimbursement of salaries, wages or other remuneration paid or payable by the distributor to an employee of the distributor to the extent that that remuneration is a cost to the distributor of supplying a casino operating service to the authority, or
(iv) a reimbursement of an expense incurred by the distributor in the course of supplying a service referred to in subparagraph 188.1(4)(a)(iii) of the Act, and

A4 
is
(i) if the reimbursement is in respect of a supply made by the distributor to the authority in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and
(ii) in any other case, the rate set out in subsection 165(1) of the Act, and

(d) twice the value of all amounts each of which is

(i) an amount that, but for subsection 156(2) or 167(1.1) of the Act, would have become payable by the authority during the particular period as tax under Division II of Part IX of the Act in respect of a supply made to the authority,
(ii) an amount that would have become payable by the authority during the particular period as tax under Division IV or IV.1 of Part IX of the Act if the authority’s gaming activities were not commercial activities,

(iii) the amount by which
(A) the total of all amounts each of which is tax that would have become payable by the authority during the particular period under Division II of Part IX of the Act in respect of a supply (other than a supply referred to in subparagraph (iv) or (v)) made to the authority that is a taxable supply of property or a service for consideration less than fair market value, or an exempt supply by way of lease of tangible personal property or real property, if the supply had been a taxable supply made for consideration equal to fair market value,
exceeds
(B) the total amount of tax under that Division that became payable by the authority during the particular period in respect of supplies included in clause (A),

(iv) the amount of tax that would have become payable by the authority during the particular period under Division II of Part IX of the Act in respect of an exempt supply of real property made to the authority by way of lease by a wholly-owned subsidiary of the authority that had acquired the property for consideration equal to fair market value if the supply had been a taxable supply and if the amount of consideration for the supply that had become due in the period or was paid in the period without having become due were equal to the greater of the period cost of the supply for the period and the total of any amounts of consideration for the supply, as otherwise determined for the purposes of Part IX of the Act, that became due in the period or were paid in the period without having become due, or

(v) the amount, if any, by which
(A) the amount of tax that would have become payable by the authority during the particular period under Division II of Part IX of the Act in respect of a taxable supply of property made to the authority by way of lease by a wholly-owned subsidiary of the authority that had acquired the property for consideration equal to fair market value if consideration for the supply, equal to the period cost of the supply for the period, became due in the period and if that were the only consideration for the supply that became due in the period or was paid in the period without having become due,
exceeds
(B) the total amount of tax under that Division that became payable by the authority during the particular period in respect of the supply, and

A2 
is the total of all amounts each of which is determined by the formula
A5 × A6
where

A5 
is
(a) an input tax credit of the authority for the particular period that is in respect of an amount included under paragraph (a), or
(b) twice the value of an imputed input tax credit of the authority for the particular period that is in respect of an amount included under any of subparagraphs (d)(i) to (iii), of the description of A1 in determining the total for A1 for the particular period, and

A6 
is the extent (expressed as a percentage) to which the authority is, subject to section 9, entitled to include the input tax credit or imputed input tax credit, as the case may be, in determining this total for the particular period;


is the total of all amounts each of which is an amount of tax that would have become payable by the authority during the particular period in respect of consideration for a supply of a casino operating service made to the authority by a distributor of the authority if subsection 188.1(4) of the Act did not apply to the supply and the consideration for the supply were equal to the amount determined by the formula
B1 - (B2 + B3)
where

B1 
is the consideration for the casino operating service determined under Part IX of the Act without reference to that subsection,

B2 
is the total of all amounts each of which is determined by the formula
B4 × B5
where

B4 
is a particular amount of salaries, wages or other remuneration (other than an amount described in the description of B6) paid or payable by the distributor, or by a person (in this description and in the description of B6 referred to as the “distributor’s subsidiary”) that is a wholly-owned subsidiary of the distributor, to an employee of the distributor or of the distributor’s subsidiary, and

B5 
is the extent (expressed as a percentage) to which the particular amount is
(i) a cost to the distributor of supplying the casino operating service to the authority, or
(ii) a cost to the authority of the management, administration and carrying on of the day-to-day operations of the authority’s gaming activities that are connected with a casino of the authority, and

B3 
is the total of all amounts each of which is determined by the formula
B6 × B7
where

B6 
is a particular amount that is paid by, or is in respect of a supply of property or a service made by, the distributor or the distributor’s subsidiary to an employee of the distributor or of the distributor’s subsidiary or to a person related to such an employee, and that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for a taxation year of the employee, and

B7 
is the extent (expressed as a percentage) to which the particular amount is
(i) a cost to the distributor of supplying the casino operating service to the authority, or
(ii) a cost to the authority of the management, administration and carrying on of the day-to-day operations of the authority’s gaming activities that are connected with a casino of the authority;


is the total of all amounts each of which is an amount determined by the formula
C1 × C2
where

C1 
is the total of all amounts each of which is an amount that, in the absence of subsection 188.1(4) of the Act, would be consideration (other than charitable proceeds from Superstar Bingo) for a supply (other than a supply of a casino operating service) by a distributor of the authority to the authority or would be a reimbursement paid or payable by the authority to a distributor of the authority (other than a reimbursement that is a non-gaming reimbursement, a non-taxable reimbursement, a reimbursement of the cost to the distributor of a right to play or participate in a game of chance given away free of charge by the distributor or a reimbursement of salaries, wages or other remuneration paid or payable by the distributor to an employee of the distributor to the extent that that remuneration is a cost to the distributor of supplying a casino operating service to the authority), where
(a) if the amount represents a commission in respect of the sale, by the distributor on behalf of the authority, of a right to play or participate in a game of chance (other than an instant win game), it became ascertainable in the particular period whether a prize or winnings were payable in respect of the right, and
(b) in any other case, the amount became due to the distributor during the particular period or was paid to the distributor during the particular period without having become due, and

C2 
is
(a) if the particular supply by the distributor to the authority relates to the making of supplies of rights of the authority in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and
(b) in any other case, the rate set out in subsection 165(1) of the Act;


is the total of all amounts each of which is a positive or negative amount determined, in respect of each distributor of the authority, by the formula
(D1 - D2) × D3
where

D1 
is the amount by which
(a) the total face value of all rights of the authority evidenced by tickets, cards or other printed devices that were acquired by the distributor from the authority for the purpose of supply on the distributor’s own behalf otherwise than as prizes in kind and

(i) in the case of instant win tickets, the consideration for the supplies of which by the authority to the distributor became due during the particular period or was paid during the particular period without having become due, or
(ii) in any other case, in respect of which it became ascertainable in the particular period whether amounts were payable as prizes or winnings

exceeds
(b) the total amount paid or payable for the supplies referred to in paragraph (a) made by the authority to the distributor,

D2 
is the amount by which(a) the total face value of all rights of the authority evidenced by tickets, cards or other printed devices that were supplied to the distributor by the authority, the face value of which is included in determining the value for D1 for the particular period or a preceding reporting period of the authority and that are returned by the distributor to the authority during the particular period
exceeds
(b) the total amount paid or payable for the supplies referred to in paragraph (a) made by the authority to the distributor, and

D3 
is
(a) if the distributor acquired the devices for the purpose of supplying them in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and
(b) in any other case, the rate set out in subsection 165(1) of the Act; and


is

(a) if the particular period includes the last day of February in a calendar year, the total of all amounts, if any, each of which is determined by the formula

E1 × (100% - E2) × E3
where

E1 
is an amount (in this paragraph referred to as the “benefit amount”)

(i) that

(A) was paid by the authority, or
(B) is in respect of a supply of property or a service (other than property or a service in respect of which the authority was not entitled to claim an input tax credit because of subsection 170(1) of the Act) made by the authority to an individual who was an employee of the authority during the previous calendar year or to a person related to the individual, and

(ii) that the individual is required under section 6 of the Income Tax Act to include in computing the individual’s income for that previous calendar year,

E2 
is the extent (expressed as a percentage) to which the benefit amount is a cost to the authority of making non-gaming supplies other than the supply referred to in clause (i)(B) of the description of E1, and

E3 
is

(i) where the benefit amount is required under paragraph 6(1)(k) or (l) of the Income Tax Act to be included in computing the individual’s income,

(A) if the last establishment of the authority at which the individual ordinarily worked or to which the individual ordinarily reported in the previous calendar year in relation to the individual’s office or employment with the authority is located in

(I) Ontario, New Brunswick or Newfoundland and Labrador, the percentage referred to in paragraph 2(a) of the Automobile Operating Expense Benefit (GST/HST) Regulations,
(II) Nova Scotia, the percentage referred to in paragraph 2(b) of the Automobile Operating Expense Benefit (GST/HST) Regulations, or
(III) [Repealed, SOR/2012-191, s. 3]
(IV) Prince Edward Island, the percentage referred to in paragraph 2(c.1) of the Automobile Operating Expense Benefit (GST/HST) Regulations, and

(B) in any other case, 3%, and

(ii) in any other case, the amount determined by the formula

E4/E5
where

E4 
is
(A) if the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act and the last establishment at which the individual ordinarily worked or to which the individual ordinarily reported in the previous calendar year in relation to the individual’s office or employment with the authority is located in a participating province, the total of 4% and the tax rate for the participating province, and
(A.1) [Repealed, SOR/2012-191, s. 3]
(B) in any other case, 4%, and

E5 
is the total of 100% and the percentage determined for E4, and

(b) in any other case, zero.

SOR/98-440, s. 6;
SOR/2011-56, s. 12;
SOR/2012-191, s. 3;
SOR/2013-44, s. 1.

Previous Version

Marginal note:Net tax attributable to non-gaming activities

8 A provincial gaming authority’s net tax attributable to non-gaming activities for a particular reporting period of the authority is the positive or negative amount determined by the formula

A - B
where


is the total of all amounts each of which is
(a) an amount that became collectible by the authority during the particular period, or that was collected by the authority during the particular period without having become collectible, as or on account of tax under Division II of Part IX of the Act in respect of a non-gaming supply made by the authority,
(b) an amount that is required under any of sections 231 to 236 of the Act to be added in determining the authority’s net tax for the particular period, or
(c) an amount that is required under section 236.01 of the Act to be added in determining the authority’s net tax for the particular period, but only to the extent that the authority would not be restricted from including the amount under the description of B as a consequence of subsection 9(1); and


is the total of

(a) all amounts each of which is

(i) an input tax credit (other than an input tax credit referred to in paragraph(b)) for the particular period or a preceding reporting period of the authority,
(ii) an amount in respect of a non-gaming supply that may be deducted under any of sections 231, 232 and 234 of the Act in determining the authority’s net tax for the particular period, or
(iii) an amount that may be deducted under section 236.01 of the Act in determining the authority’s net tax for the particular period,

claimed in the return filed under Division V of Part IX of the Act by the authority for the particular period,

(b) twice the value of all amounts each of which is

(i) an input tax credit of the authority for the particular period or a preceding reporting period of the authority in respect of tax deemed under subsection 206(2) or (3) of the Act to have been paid by the authority, or
(ii) an input tax credit of the authority for the particular period or a preceding reporting period of the authority determined under subsection 193(1) of the Act,

claimed in the return filed under Division V of Part IX of the Act by the authority for the particular period, and

(c) all amounts each of which is determined by the formula

B1 × (100% - B2)
where

B1 
is an amount of
(i) a reduction, refund or credit of tax for which a credit note is received, or a debit note is issued, in the particular period by the authority in circumstances in which subsection 232(3) of the Act applies, or
(ii) a rebate received in the particular period by the authority on account of tax in the circumstances described in section 181.1 of the Act, and

B2 
is the extent (expressed as a percentage) to which the authority was entitled to claim an input tax credit in respect of that tax in determining the authority’s net tax for any reporting period.

 SOR/98-440, s. 6;
SOR/2012-191, s. 4.

Previous Version

Marginal note:Restriction on input tax credits, etc.

9 (1) An input tax credit (other than an input tax credit determined under subsection 193(1) of the Act), or an imputed input tax credit, in respect of property or a service shall not be included in determining a total for A2 in subsection 7(7), or a total for B in section 8, to the extent that the property or service

(a) was acquired or imported, or brought into a participating province, by the authority for consumption or use in gaming activities of the authority, in improving capital property used in gaming activities of the authority, in making promotional supplies or in making supplies of financial services that relate to gaming activities of the authority;
(b) was acquired or imported, or brought into a participating province, by the authority for the purpose of making a supply of the property or service that is a promotional supply;
(c) is tangible personal property that was acquired or imported, or brought into a participating province, by the authority for use as an ingredient in preparing food or beverages the supply of which by the authority is a promotional supply;
(d) is tangible personal property that was acquired or imported, or brought into a participating province, by the authority for the purpose of being incorporated into or forming a constituent or component part of, or being consumed or expended directly in the process of manufacturing, particular tangible personal property (other than food or beverages) that the authority manufactures or engages another person to manufacture for the purpose of making a supply of the particular property that is a promotional supply; or
(e) is a service that is the manufacturing for the authority of tangible personal property (other than food or beverages) and that the authority acquires for the purpose of making a supply of the property that is a promotional supply.

Marginal note:Use of capital property

(2) For the purposes of applying section 193 of the Act and the provisions of Subdivision d of Division II of Part IX of the Act in determining the net tax of a provincial gaming authority, the following rules apply:

(a) subsections 141(1) to (4), 193(2), 199(2) to (4) and 200(2) and (3) of the Act do not apply to the authority;
(b) subsection 193(1) of the Act applies, with such modifications as the circumstances require, to all property (other than a passenger vehicle) acquired or imported by the authority for use as capital property of the authority as if the authority were not a public sector body and, in the case of personal property, the property acquired or imported by the authority for that use were real property;
(c) subsections 206(2) to (5) of the Act apply, with such modifications as the circumstances require, to personal property acquired or imported by the authority for use as capital property of the authority, and to improvements to personal property that is capital property of the authority, as if the personal property were real property and the references in those subsections to “acquired” were references to “acquired or imported”;
(d) where the authority acquires or imports property for use as capital property of the authority in commercial activities of the authority, the authority is deemed to have acquired or imported the property for use in the authority’s commercial activities only to the extent to which the property was acquired or imported for use in the authority’s non-gaming activities; and
(e) where the authority uses property as capital property of the authority in commercial activities of the authority, that use is deemed to be use in the authority’s commercial activities only to the extent to which the property is used in the authority’s non-gaming activities.

Marginal note:Double counting

(3) An amount shall not be included in determining a total for A in subsection 7(1) or section 8 for a reporting period of a provincial gaming authority to the extent that that amount was included in that total for a preceding reporting period of the authority.

Marginal note:Restriction

(4) An amount shall not be included in determining a total for B in section 8 for a particular reporting period of a provincial gaming authority to the extent that that amount was claimed or included in that total in determining the net tax for a preceding reporting period of the authority unless

(a) the authority was not entitled to claim the amount in determining the net tax for that preceding period only because the authority did not satisfy the requirements of subsection 169(4) of the Act in respect of the amount before the return for that preceding period was filed; and

(b) where the authority is claiming the amount in a return for the particular reporting period and the Minister has not disallowed the amount as an input tax credit in assessing the net tax of the authority for that preceding reporting period,

(i) the authority reports in writing to the Minister, at or before the time the return for the particular reporting period is filed, that the authority made an error in claiming that amount in determining the net tax of the authority for that preceding period, and
(ii) where the authority does not report the error to the Minister at least three months before the end of the period after which an assessment of the net tax of the authority for that preceding period cannot, because of subsection 298(1) of the Act, be made, the authority pays, at or before the time the return for the particular reporting period is filed, the amount and any applicable penalty and interest to the Receiver General.

Marginal note:Amounts refunded or remitted

(5) An amount shall not be included in determining a total for B in section 8 for a reporting period of a provincial gaming authority to the extent that, before the end of the period, the amount was rebated, refunded or remitted to the authority under any Act of Parliament.

Marginal note:Application

(6) Sections 231 to 236.01 of the Act do not apply for the purpose of determining the net tax of a provincial gaming authority except as otherwise provided in this Part.

Marginal note:Method of determining extent of use, etc.

(7) The methods used by a person in a fiscal year to determine

(a) the extent to which properties or services are acquired or imported or brought into a participating province by the person for consumption or use in particular activities or for a particular purpose, and
(b) the extent to which the consumption or use by the person of properties or services is in particular activities or for a particular purpose,

shall be fair and reasonable and shall be used consistently by the person throughout the year.

SOR/98-440, s. 6;
SOR/2011-56, s. 13;
SOR/2012-191, s. 5.

Previous Version

Interprovincial Lottery Corporation and its Members

Marginal note:Net tax of Interprovincial Lottery Corporation

10 The net tax for a reporting period of the Interprovincial Lottery Corporation is the amount that would be its net tax for the period determined under section 225 of the Act if the amount collectible by it as or on account of tax under Division II of Part IX of the Act in respect of each supply made by it to a provincial gaming authority were the amount determined in accordance with section 11.
SOR/98-440, s. 6.

Marginal note:Presumption concerning tax on supply

11 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of the Interprovincial Lottery Corporation, if the Corporation makes a supply of property or a service to a provincial gaming authority, the tax payable in respect of the supply is deemed to be the tax that would be payable in respect of the supply if the value of the consideration for the supply were the amount determined by the formula

A - B
where


is the value of the consideration for the supply determined without reference to this section; and


is the total of all amounts each of which is determined by the formula
B1 × B2
where

B1 
is a particular amount that is
(a) salary, wages or other remuneration paid or payable to an employee of the Corporation, other than an amount that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for the purposes of that Act,
(b) consideration paid or payable by the Corporation for an exempt supply of a service or a zero-rated supply, or
(c) a tax, duty or fee prescribed for the purposes of section 154 of the Act, and

B2 
is the extent (expressed as a percentage) to which the particular amount is a cost to the Corporation of supplying the property or service.

 SOR/98-440, s. 6;
SOR/2011-56, s. 14(E).

Previous Version

Marginal note:Presumption concerning rights and distributions

12 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of the Interprovincial Lottery Corporation and of any provincial gaming authority, where any proceeds from a game of chance conducted by the Corporation are distributed to one or more provincial gaming authorities, the following rules apply:

(a) the particular rights to play or participate in that game to which each authority’s share of the proceeds is attributable are deemed to be rights of that authority and not of the Corporation; and

(b) in relation to the particular rights,

(i) the game is deemed to be conducted by,
(ii) the related bets are deemed to be made with and accepted by, and
(iii) the liability for the payment of any related prizes or winnings is deemed to be that of,

that authority and not the Corporation.

SOR/98-440, s. 6.

Marginal note:Expenses incurred by Interprovincial Lottery Corporation

13 Where the Interprovincial Lottery Corporation incurs expenses in conducting a game of chance and those expenses are not charged to a provincial gaming authority as consideration for a taxable supply but are charged at any time to the authority otherwise than as consideration for a supply or are taken into account in determining the amount of proceeds from the game that are paid, at any time, to the authority, for the purpose of paragraph (a.1) of the description of A1 in subsection 7(7), the imputed tax payable by the authority in respect of those expenses for the reporting period of the authority that includes that time is the amount determined by the formula

A × (B - C)
where


is the rate set out in subsection 165(1) of the Act,


is the amount of those expenses, and


is the total of all amounts each of which is determined by the formula
C1 × C2
where

C1 
is a particular amount that is
(a) salary, wages or other remuneration paid or payable to an employee of the Corporation, other than an amount that the employee is required under section 6 of the Income Tax Act to include in computing the employee’s income for the purposes of that Act,
(b) consideration paid or payable by the Corporation for an exempt supply of a service or a zero-rated supply, or
(c) a tax, duty or fee prescribed for the purposes of section 154 of the Act, and

C2 
is the extent (expressed as a percentage) to which the particular amount is a cost to the Corporation of conducting the game and is included in the expenses referred to in the description of B.

 SOR/98-440, s. 6;
SOR/2011-56, s. 15.

Previous Version

Marginal note:Presumption concerning status as financial institution

14 For all purposes relevant to the determination of the net tax of the Interprovincial Lottery Corporation, the Corporation is deemed not to be a financial institution.
SOR/98-440, s. 6.

Provincial Gaming Authority as Distributor

Marginal note:Special rule

14.1 If a provincial gaming authority, other than the Interprovincial Lottery Corporation, (in this section referred to as the “reporting authority”) is a distributor of another provincial gaming authority in relation to a game of chance conducted by or on behalf of the other authority,

(a) in applying subsection 7(7) and sections 8 and 9 of these Regulations and Part IX of the Act in determining the imputed tax payable on gaming expenses and the input tax credits of the reporting authority and of the other authority, any amount paid or payable by the reporting authority on behalf of the other authority in respect of the acquisition or importation, or bringing into a participating province, of property or a service for consumption, use or supply in relation to the conduct of the game is to be taken into account as if

(i) the game were conducted by the reporting authority as part of the gaming activities of the reporting authority and not of the other authority,
(ii) the property or service were acquired or imported, or brought into the participating province, and the amount were paid or payable, by the reporting authority on its own account and not by the other authority,
(iii) the rights to play or participate in the game were rights of the reporting authority and not of the other authority, and
(iv) persons, other than the reporting authority, acting as distributors of the other authority in relation to the game were distributors of the reporting authority, and not of the other authority, in relation to the game;

(b) no amount that would, but for subsection 188.1(4) of the Act, be consideration for a supply by the reporting authority to the other authority in relation to the game is to be included in the total for C1 in subsection 7(7); and
(c) no amount of a reimbursement paid or payable by the other authority to the reporting authority in respect of an expense incurred or to be incurred by the reporting authority that is attributable to the game is to be included in the amount determined for A3 or C1 in subsection 7(7).

SOR/2011-56, s. 16.

Wholly-owned Subsidiary Holding Real Property

Marginal note:Net tax of wholly-owned subsidiary holding real property

15 The net tax for a reporting period of a corporation that is a wholly-owned subsidiary of a provincial gaming authority and that supplies to the authority, by way of lease, licence or similar arrangement, real property acquired by the authority for use as the authority’s head office is the amount that would be the corporation’s net tax for the period determined under section 225 of the Act if the amount collectible by it as or on account of tax under Division II of Part IX of the Act in respect of each such supply of that real property to the authority were the amount determined in accordance with section 16.
SOR/98-440, s. 6.

Marginal note:Presumption concerning tax on supply of real property

16 For the purposes of this Part and for the purposes of applying Part IX of the Act in determining the net tax of a wholly-owned subsidiary of a provincial gaming authority, where the subsidiary makes a supply to the authority (other than a supply to which section 156 of the Act applies), by way of lease, license or similar arrangement, of real property that the authority acquires for use as the authority’s head office, the tax payable in respect of the supply is deemed to be the tax that would be payable in respect of the supply if the value of the consideration for the supply were the amount determined by the formula

A - B
where


is the value of the consideration for the supply determined without reference to this section; and


is the total of all amounts each of which is determined by the formula
B1 × B2 × B3
where

B1 
is a particular amount that is property tax payable by the subsidiary in respect of the property or consideration paid or payable by the subsidiary for a zero-rated supply, or an exempt supply of personal property or a service, other than a supply that would be deemed under subsection 188.1(4) of the Act not to be a supply if it were made to the authority instead of the subsidiary,

B2 
is the extent (expressed as a percentage) to which the particular amount is a cost to the subsidiary of making the supply of the real property to the authority, and

B3 
is the extent (expressed as a percentage) to which the authority acquires the real property for use as the authority’s head office.

 SOR/98-440, s. 6.