New Harmonized Value-added Tax System Regulations, No. 2 — 36
Effect of election 36 (1) For the purposes of paragraph 236.01(4)(a) of the Act and despite sections 31 and 32, if an election made under subsection 35(1) by a person is in effect during an instalment period, the amount to be added to the net tax of the person for each particular reporting period of the person during which the person is a large business that ends at a time in the instalment period when the election is in effect is the total of all amounts each of which is determined, for a specified provincial input tax credit, by the formula (A/B) × C × D where A is all or part of the specified provincial input tax credit that would have been required to be added under subsection 236.01(2) of the Act for each reporting period of the person ending in the last fiscal year of the person that ends before the first day of the instalment period if (a) where the first day of that fiscal year is before July 1, 2010 and the specified provincial input tax credit is not a Prince Edward Island recapture amount, the new harmonized value-added tax system had been in effect, with all modifications as the circumstances may require, throughout that fiscal year in respect of each specified province (other than Prince Edward Island) and the harmonization date for the specified province had been the first day of that fiscal year, (a.1) where the first day of that fiscal year is before April 1, 2013 and the specified provincial input tax credit is a Prince Edward Island recapture amount, the new harmonized value-added tax system had been in effect, with all modifications as the circumstances may require, throughout that fiscal year in respect of Prince Edward Island and the harmonization date for Prince Edward Island had been the first day of that fiscal year, (b) no election under subsection 35 (1) had been in effect, and (c) the recapture rate applicable at all times throughout that fiscal year had been 100%; B is the number of fiscal months in the last fiscal year of the person that ends before the first day of the instalment period; C is (a) if the particular reporting period is a fiscal year, 12, (b) if the particular reporting period is a fiscal month, 1, or (c) if the particular reporting period is a fiscal quarter, 3; and D is the recapture rate applicable on the last day of the particular reporting period in respect of the specified provincial input tax credit. Reconciliation (2) For the purposes of paragraph 236.01(4)(a) of the Act, if an election made under subsection 35 (1) by a person is in effect during a fiscal year of the person, the person shall, in determining the net tax of the person for a reporting period of the person that includes the last day of that fiscal year or for a reporting period of the person that begins after that fiscal year and ends on or before the last day of the third fiscal month following the last day of that fiscal year, add the positive amount or deduct the negative amount determined by the formula A - B where A is the total of all amounts that, in the absence of subsection (1), would have been required under subsection 236.01(2) of the Act to be added to the net tax of the person as a consequence of section 31 or 32 for each reporting period of the person ending in the fiscal year; and B is the total of all amounts each of which is added to the net tax of the person as a consequence of subsection (1) or section 31 or 32 for each reporting period of the person ending in the fiscal year. Reconciliation on cessation (3) Despite subsection (2), for the purposes of paragraph 236.01(4)(a) of the Act, if an election made under subsection 35 (1) by a person is in effect during a particular fiscal year of the person and the person ceases to be a registrant at any time in the particular fiscal year, the person shall, in determining the net tax of the person for the particular reporting period in which the person ceases to be a registrant, add the positive amount or deduct the negative amount determined by the for