Games of Chance (GST/HST) Regulations — 7
f the authority in respect of a prize or winnings in respect of an instant win ticket of a particular kind that the authority has delivered or agreed to deliver to a distributor of the authority and in respect of which the distributor pays or becomes liable to pay, during the period, an amount to the authority is the amount determined by the formula (A/B) × C where A is (a) if the instant win ticket was or is to be delivered to the distributor in a participating province, the total of the rate set out in subsection 165(1) of the Act and the tax rate for that province, and (b) in any other case, the rate set out in subsection 165(1) of the Act; B is the total of 100% and the percentage determined for A; and C is the expected value, determined on the basis of mathematical probability, of the prize or winnings in respect of each instant win ticket of that kind supplied by the authority. Additional credit (6) A provincial gaming authority’s additional credit in respect of gaming activities for a reporting period of the authority is the amount determined by the formula A - B - C where A is the total of all amounts each of which is an amount that the authority is required, under subsection (2) or (3), to add in determining its net tax for the period; B is the total of all amounts each of which is a credit of the authority in respect of a prize or winnings for the period determined under subsection (4) or (5); and C is the imputed tax payable by the authority on gaming expenses for the period determined under subsection (7). Imputed tax on gaming expenses (7) The imputed tax payable by a provincial gaming authority on gaming expenses for a particular reporting period of the authority is the amount determined by the formula A + B + C + D + E where A is the amount determined by the formula A 1 - A 2 where A 1 is the total of all amounts each of which is (a) an amount of tax (other than tax that is deemed under subsection 206(2) or (3) of the Act to have been paid or that is calculated on a reimbursement) that became payable during the particular period, or that was paid during the particular period without having become payable, by the authority in respect of property or a service (other than a casino operating service or a prize in kind) that was acquired or imported by the authority, (a.1) twice the amount determined under section 13 for the particular period as the imputed tax payable by the authority in respect of expenses incurred by the Interprovincial Lottery Corporation, (b) an amount of tax that the authority is deemed to have collected during the period under subsection 206(5) of the Act, (b.1) an amount (other than an amount described in subparagraph (d)(ii)) of tax in respect of a supply deemed under subsection 143(1) of the Act to have been made outside Canada (other than a supply described in subsection 178.8(2) of the Act) that would have become payable by the authority during the particular period if the supply had been made in Canada by a registrant, (c) the total of all amounts each of which is determined by the formula A 3 × A 4 where A 3 is a reimbursement (other than a non-gaming reimbursement) that became payable during the particular period, or that was paid during the particular period without having become payable, by the authority to a distributor of the authority, other than (i) a non-taxable reimbursement, (ii) a reimbursement of the cost to the distributor of a right to play or participate in a game of chance given away free of charge by the distributor, (iii) a reimbursement of salaries, wages or other remuneration paid or payable by the distributor to an employee of the distributor to the extent that that remuneration is a cost to the distributor of supplying a casino operating service to the authority, or (iv) a reimbursement of an expense incurred by the distributor in the course of supplying a service referred to in subparagraph 188.1(4)(a)(iii) of the Act, and A 4 is (i) if the reimbursement is in res