P-138R "The Effect of Making a Joint Venture Election on a Participant's Ability to Register and Claim Input Tax Credits"

Subject to the exception provided for in subsection 141.01(7)..., where a joint venture operator and another participant (called a co-venturer) make an election pursuant to section 273, purchases and supplies made by the operator on behalf of the co-venturer in the course of the joint venture are deemed under subsection 273(1) to be made by the operator, not the co-venturer.

S. 141.01(7) permits ITCs to be claimed notwithstanding s. 273 JV election

Where an election has been made pursuant to section 273, it would initially appear that section 141.01 would preclude a co-venturer from claiming an input tax credit for any tax paid on property or services consumed or used, or to be consumped or used, in relation to joint venture activities, because subsection 273(1) deems any taxable supplies made by the operator on behalf of the co-venturer to have been made by the operator, not the co-venturer, and therefore the co-venturer could not have acquired the property or service for the purpose of making those supplies.

Nevertheless, according to subsection 141.01(7), among other things, where a supply is deemed under another provision of Part IX of the Excise Tax Act not to have been made by a person, that deeming shall not apply for the purpose of subsections 141.01(1) through (4). Therefore, although subsection 273(1) deems supplies made by the operator on behalf of the co-venturer not to have been made by the co-venturer, for the purpose of subsections 141.01(1) through (4), this deeming does not apply. As a result, the co-venturer is still considered to have made these supplies.