Excise Tax Act — E-15 184
Supply to insurer on settlement of claim 184 (1) For the purposes of this Part, where at any time after 1990 property of a person is transferred to an insurer in the course of settling an insurance claim, the following rules apply: (a) for the purposes of this Part, the person shall be deemed to have made, and the insurer shall be deemed to have received, at that time, a supply by way of sale of the property; (b) for the purposes of this Part (other than sections 193 and 257), that supply shall be deemed to have been made for no consideration; (c) in the case of a taxable supply of real property, for the purposes of sections 193 and 257, the tax payable in respect of the supply shall be deemed to be equal to tax calculated on the fair market value of the property at that time; and (d) in the case of a supply of real property included in section 9 of Part I of Schedule V, in section 1 of Part V.1 of that Schedule or in section 25 of Part VI of that Schedule, for the purposes of sections 193 and 257, the supply is deemed to be a taxable supply and the tax payable in respect of the supply is deemed to be equal to tax calculated on the fair market value of the property at that time. Supply in commercial activity (2) Where at any time an insurer makes a particular supply (other than an exempt supply) of property transferred to the insurer in circumstances in which subsection (1) applies, except where any of subsections (3) to (5) applied at an earlier time in respect of the use of the property by the insurer, the insurer shall be deemed, for the purposes of this Part, to have made the particular supply in the course of a commercial activity of the insurer and anything done by the insurer in the course of, or in connection with, the making of the supply and not in connection with the transfer of the property shall be deemed to have been done in the course of the commercial activity. Use of real property (3) For the purposes of this Part, where at any time an insurer to whom real property has been transferred, in circumstances in which subsection (1) applies, begins to use the property otherwise than in the making of a supply of the property, the insurer shall be deemed to have made a supply of the property at that time and, except where the supply is an exempt supply, (a) to have collected, at that time, tax in respect of the supply equal to the amount determined by the formula (A/B) × C where A is (i) if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and (ii) in any other case, the rate set out in subsection 165(1), B is the total of 100% and the percentage determined for A, and C is the fair market value of the property at that time; and (b) to have acquired the property and paid that tax at that time. Use of personal property transferred before 1994 (4) For the purposes of this Part, where an insurer to whom personal property has been transferred from a person before 1994, in circumstances in which subsection (1) applies, begins at a particular time to use the property otherwise than in the making of a supply of the property, the following rules apply: (a) the insurer is deemed to have received, immediately after the particular time, a particular supply by way of sale of the property; and (b) where tax would have been payable had the property been purchased in Canada from the person for consideration at the time it was transferred, the insurer shall be deemed (i) to have made, at the particular time, a taxable supply of the property and to have collected, at the particular time, tax in respect of that supply equal to the amount determined by the formula (A/B) × C where A is (A) if the property is situated in a participating province at the particular time, the total of the rate set out in subsection 165(1) and the tax rate for that province, and (B) in any other case, the rate set out in subsection 165(1), B is the total of 100% and the percen