Subsection 141(1) - Use in Commercial Activities
Administrative Policy
Guide for Providers of Financial Services under "Input Tax Credits" - "Calculation Rules"
Substantially all is interpreted to mean 90% or more.
Subsection 141(3) - Use in Other Activities
See Also
FP Newspapers Inc. v. The Queen, 2013 TCC 44 (Informal Procedure)
The registrant, which was the corporate successor to an income fund, acquired, as essentially its only asset, a 49% limited partnership interest in a partnership that carried on a newspaper business. It appealed the denial of $5,039.77 in ITCs which it had claimed in its return for its three-month reporting period ending on March 31, 2011 in connection with various of its costs including fees paid in connection with the income fund conversion and in connection with news releases regarding its dividends.
Pizzitelli J. found, before turning to s. 272.1., that all of the the registrant's consumption or use of services was deemed by s. 141(3) to be not in the course of commercial activities, given that it received substantial partnership drawings ($3,865,500 for a six-month period) for distribution it to shareholders, and its only identified commercial activity in that period was providing advice to the partnership for fees of $1,212.75), and stated (at para. 19) that:
the case law is clear...that "substantially all" means at least 90% and in the case at hand we are almost at 100%.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service | partnership draws represented financial services | 90 |
| Tax Topics - Excise Tax Act - Section 272.1 - Subsection 272.1(2) | s. 272.1 did not apply to limited partner | 260 |
Articles
J. Spencer, "Backdating Registration: Can It Be Done?", Sales and Use Tax, Vol. III, No. 2, 1997, p. 146.
Subsection 141(4)
Administrative Policy
22 March 2022 GST/HST Interpretation 238955 - Whether a bunkhouse located on […][a farm] and used to provide housing to temporary foreign workers is a place of residence for GST/HST purposes and eligibility for input tax credits in respect of its construction
A farmer constructed a 600 square-feet bunkhouse (with 2 bedrooms, a kitchen and bathroom) to provide accommodation to two temporary foreign workers for each annual 10-week harvest period. CRA found that self-supply rule in s. 191(3) did not apply since the bunkhouse was first occupied as a place of lodging, rather than as a “place of residence” as required by s. 191(3)(b)(i).
The supplies to the workers of the accommodation would be exempted under Sched. V, Pt. V, s. 6. There also was relatively “minimal” use of the bunkhouse in commercial activities while the temporary workers were not there. Accordingly, having regard to the rule in s. 141(4) - that if substantially all (90% or more) of the intended consumption or use of property or service is for activities that are not commercial activities, then the consumption or use is deemed to be in those activities that are not commercial activities - it appeared likely that the farmer could not claim any input tax credits for the construction costs.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 191 - Subsection 191(3) | s. 191(3) did not apply where a MURC was used as a place of "lodging” rather than a "place of residence" | 271 |
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Residential Complex | a bunkhouse was a residential complex even though it was used for lodging rather than as a place of residence | 93 |