Excise Tax Act — E-15 203
Sale of passenger vehicle 203 (1) If a registrant (other than a municipality), at a particular time in a reporting period of the registrant, makes a taxable supply by way of sale of a passenger vehicle (other than a vehicle that is designated municipal property of a person designated at the particular time to be a municipality for the purposes of section 259) that, immediately before the particular time, was used as capital property in commercial activities of the registrant, the registrant may, despite section 170, paragraph 199(2)(a) and subsections 199(4) and 202(1), claim an input tax credit for that period equal to the amount determined by the formula A × (B - C)/B where A is the basic tax content of the vehicle at the particular time; B is the total of (a) the tax that was payable by the registrant in respect of the last acquisition or importation of the vehicle by the registrant, (b) where the registrant brought the vehicle into a participating province after it was last acquired or imported by the registrant, the tax that was payable by the registrant in respect of bringing it into that province, and (c) the tax that was payable by the registrant in respect of improvements to the vehicle acquired, imported or brought into a participating province by the registrant after the property was last acquired or imported; and C is the total of all input tax credits that the registrant was entitled to claim in respect of any tax included in the total for B. Ceasing to use passenger vehicle, etc. (2) For the purposes of this Part, where a registrant who is an individual or a partnership acquired or imported a passenger vehicle or an aircraft for use as capital property exclusively in commercial activities of the registrant and the registrant begins, at any time, to use the vehicle or aircraft otherwise than exclusively in commercial activities of the registrant, the registrant shall be deemed to have (a) made, immediately before that time, a taxable supply by way of sale of the vehicle or aircraft; and (b) collected, at that time, tax in respect of the supply equal to the basic tax content of the vehicle or aircraft immediately before that time. Sale of passenger vehicle, etc. (3) Despite paragraph 141.1(1)(a), for the purposes of this Part, a supply shall be deemed not to be a taxable supply if (a) an individual or a partnership (other than a municipality) who is a registrant makes, at a particular time, the supply by way of sale of a passenger vehicle or an aircraft (other than a vehicle or an aircraft that is designated municipal property of a person designated at the particular time to be a municipality for the purposes of section 259) that is capital property of the registrant; and (b) at any time after the individual or partnership became a registrant and before the particular time, the registrant did not use the vehicle or aircraft exclusively in commercial activities of the registrant. Sale of passenger vehicle by a municipality (4) If a registrant (other than an individual or a partnership) that is a municipality or a person designated to be a municipality for the purposes of section 259, at a particular time in a reporting period of the registrant, makes a taxable supply by way of sale of a passenger vehicle (other than a vehicle of a person designated to be a municipality for the purposes of section 259 that is not designated municipal property of the person) that, immediately before the particular time, was capital property of the registrant, the registrant may, despite section 170, paragraph 199(2)(a) and subsections 199(4) and 202(1), claim an input tax credit for that period equal to the lesser of (a) the amount determined by the formula A × (B – C)/B where A is the basic tax content of the vehicle at the particular time, B is the total of (i) the tax that was payable by the registrant in respect of the last acquisition or importation of the vehicle by the registrant, (ii) if the registrant brought the vehicle into