Excise Tax Act — E-15 167
Supply of assets of business 167 (1) Where a supplier makes a supply of a business or part of a business that was established or carried on by the supplier or that was established or carried on by another person and acquired by the supplier, and, under the agreement for the supply, the recipient is acquiring ownership, possession or use of all or substantially all of the property that can reasonably be regarded as being necessary for the recipient to be capable of carrying on the business or part as a business, (a) for the purposes of this Part, the supplier shall be deemed to have made a separate supply of each property and service that is supplied under the agreement for consideration equal to that part of the consideration for the supply of the business or part that can reasonably be attributed to that property or service; and (b) except where the supplier is a registrant and the recipient is not a registrant, the supplier and the recipient may make a joint election in prescribed form containing prescribed information to have subsection (1.1) apply to those supplies. Effect of election (1.1) Where a supplier and a recipient make a joint election under subsection (1) in respect of a supply of a business or part of a business and the recipient, if a registrant, files the election with the Minister not later than the day on or before which the return under Division V is required to be filed for the recipient’s first reporting period in which tax would, but for this subsection, have become payable in respect of the supply of any property or service made under the agreement for the supply of the business or part, or on such later day as the Minister may determine on application of the recipient, (a) no tax is payable in respect of a supply of any property or service made under the agreement other than (i) a taxable supply of a service that is to be rendered by the supplier, (ii) a taxable supply of property by way of lease, licence or similar arrangement, and (iii) where the recipient is not a registrant, a taxable supply by way of sale of real property; and (b) for the purposes of this Part, (i) where, but for this subsection, tax would have been payable by the recipient in respect of a supply made under the agreement of property that was capital property of the supplier and that is being acquired by the recipient for use as capital property of the recipient, the recipient shall be deemed to have so acquired the property for use exclusively in the course of commercial activities of the recipient, and (ii) where, notwithstanding this subsection, tax would not have been payable by the recipient in respect of a supply made under the agreement of property that was capital property of the supplier and that is being acquired by the recipient for use as capital property of the recipient, the recipient shall be deemed to have so acquired the property for use exclusively in activities of the recipient that are not commercial activities. Supply of business assets of deceased (2) Where (a) immediately before death, an individual held property for consumption, use or supply in the course of a business carried on immediately before the individual’s death, (b) the estate of the deceased individual makes a supply, in accordance with the individual’s will or the laws relating to the succession of property on death, of the property to another individual who is a beneficiary of the estate and a registrant, (c) the property is received for consumption, use or supply in the course of commercial activities of the other individual, and (d) the estate and the other individual jointly elect under this subsection, no tax is payable in respect of the supply and the other individual shall, for the purposes of this Part, be deemed to have acquired the property for use exclusively in commercial activities of the individual. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] 1990, c. 45, s.