Subsection 200(2) - Ceasing Use of Personal Property
Administrative Policy
GST/HST Notice No. 324, Proposed Amendment Addressing Mining Activities in respect of Cryptoassets, February 2023
ITCs where virtual payment instruments are payable in respect of mining activities
Application of change-in-use rules as a result of virtual payment instruments becoming financial instruments on May 18, 2019
Any capital property that the person held as of May 18, 2019, is subject to the change-in-use provisions in the ETA where supplies made after May 17, 2019, of the virtual payment instruments, acquired as a result of this mining activity, were not supplies made in the course of the person’s commercial activities.
Where after May 17, 2019, the person acquires, imports or brings into a participating province property or services that are consumed, used or supplied by the person in the course of validating transactions and adding them to a publicly distributed ledger, the person would not be eligible to claim ITCs in respect of that property or those services where the supply of a virtual payment instrument, acquired as a result of this mining activity, was not a commercial activity.
Example 3
Corporation E is a GST/HST registrant that has been involved in the mining of Bitcoin as a solo miner since January 2017. When Corporation E is successful in validating Bitcoin transactions and adding them to the Bitcoin ledger, Corporation E earns a reward and a transaction fee in the form of Bitcoin. It is Corporation E’s intention to sell the Bitcoins that it earns. Corporation E makes acquisitions of equipment and electricity to conduct its mining activities.
Bitcoin meets the virtual payment instrument definition. Sales of Bitcoin made by Corporation E prior to May 18, 2019, are taxable supplies made in the course of a commercial activity. Accordingly, there may be an ITC entitlement for the equipment and electricity acquired by Corporation E before May 18, 2019, that are consumed, used or supplied by Corporation E in validating the Bitcoin transactions and adding them to the Bitcoin ledger subject to the requirements of section 169 being met
Sales of Bitcoin made by Corporation E after May 17, 2019, are not made in the course of a commercial activity. Accordingly, there is no eligibility for Corporation E to claim ITCs in respect of the equipment and electricity acquired by Corporation E after May 17, 2019, that are consumed, used or supplied by Corporation E in validating the Bitcoin transactions and adding them to the Bitcoin ledger. Corporation E will need to apply the change-in-use provisions in the ETA concerning the equipment that is capital property that Corporation E held on May 18, 2019.
B-109 "Application of the GST/HST to the Practice of Naturopathic Doctors" 31 July 2015
Deemed self supply resulting from naturopathic services becoming exempted after February 10, 2014
If, as a result of naturopathic services becoming exempt from the GST/HST, there is a change in use of the capital personal property by the naturopathic doctor from more than 50% in taxable activities to 50% or less in taxable activities, the naturopathic doctor ceases to use the property primarily in taxable activities. As a result, if the naturopathic doctor is a GST/HST registrant, he or she is deemed by subsection 200(2) to have sold the property immediately before the change in use occurs and, at the time the change in use occurs, is deemed to have collected the GST/HST on the sale of the property equal to the basic tax content of the property at that time.