New Harmonized Value-added Tax System Regulations, No. 2 — 31
e formula P/Q where P is (i) in the case of specified energy acquired in or brought into Ontario, the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in Ontario to the extent that it can reasonably be considered that those specified salary and wages are not attributable to the direct engagement by the employee in activities that are eligible scientific research and experimental development activities for the purposes of the Taxation Act, 2007 , S.O. 2007, c. 11, Sch. A, or (ii) in the case of specified energy acquired in or brought into British Columbia, the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in British Columbia to the extent that it can reasonably be considered that those specified salary and wages are not attributable to the direct engagement by the employee in activities that are eligible scientific research and experimental development activities for the purposes of the Income Tax Act , R.S.B.C. 1996, c. 215, and Q is the total of the specified salary and wages of each employee of the person that are paid by the person in the second last taxation year of the person immediately preceding the reporting period for anything done by the employee in the course of, or in relation to, the office or employment of the employee in the specified province where the specified energy was acquired or brought into, and (d) in any other case, the amount that would be the specified provincial input tax credit in respect of the specified energy if the specified energy did not include specified production energy and specified research energy; and B is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit. Telecommunications (4) If, at any time during a reporting period of a person, the person is a large business, the particular time prescribed by section 30 in respect of a specified provincial input tax credit of the person in respect of a specified property or service described in paragraph 28 (1)(f) or (g) is in the reporting period and the person is a large business at the particular time, for the purposes of subsection 236.01(2) of the Act, the amount to be added to the net tax of the person for the reporting period in respect of the specified provincial input tax credit is determined by the formula A × B where A is 100% of the specified provincial input tax credit, except that the person may, if the specified property or service is provided to the person together with other property or services that are not a specified property or service (each of which is in this subsection referred to as an “element”) and the consideration for the specified property or service and each element is not separately identified, apply the following percentage (a) if the specified property or service is acquired for consumption or use in British Columbia, 95%, and (b) if the specified property or service is acquired for consumption or use in Ontario or Prince Edward Island and is provided to the person together with (i) an element that is a service, 96%, (ii) an element that is property, 89%, and (iii) an element described in subparagraph (i) and an element described in subparagraph (ii), 86%; and B is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit. Food, beverages and entertainment (5) If, at any time during a reporting period of a person, the person is a large business and the time prescribed by section 30 in respect of a specified prov