Excise Tax Act — E-15 183
sale of the property immediately before the particular time, and (d) except if that supply is a zero-rated supply, to have paid, immediately before the particular time, all tax payable in respect of that supply, which is deemed to be equal to (i) if (A) the property was seized or repossessed in a participating province by the creditor before the day that is three years after the harmonization date for that province and the particular supply is either made outside Canada or is a zero-rated supply, or (B) either the property was seized or repossessed in a non-participating province or the particular supply is a supply (other than a zero-rated supply) made in a non-participating province, tax under subsection 165(1) calculated on the fair market value of the property at the time it was seized or repossessed, and (ii) in any other case, the total of (A) tax under subsection 165(1) calculated on that fair market value, and (B) tax under subsection 165(2) calculated on that fair market value at the lesser of the tax rate for the participating province in which the particular supply is made and the tax rate for the participating province in which the property was seized or repossessed. Voluntary transfer (9) For the purposes of this section, where property is at any time voluntarily transferred by a particular person to another person for the purpose of satisfying in whole or in part a debt or obligation in respect of which the particular person is in default, the other person shall be deemed to have seized or repossessed the property from the particular person at that time in circumstances in which subsection (1) applies. Debt security, etc. (10) For the purposes of this Part, where (a) for the purposes of satisfying in whole or in part a debt or obligation owing by a person, a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of property, (b) subsection (3) does not apply to the supply, and (c) a receiver (within the meaning assigned by subsection 266(1)) does not have authority in respect of the property, the creditor shall be deemed to have seized the property immediately before that supply and that supply shall be deemed to have been made by the creditor and not by the person. Redemption of property (10.1) For the purposes of this Part, where (a) for the purposes of satisfying in whole or in part a debt or obligation owing by a person (in this subsection referred to as the “debtor”), a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of property (in this subsection referred to as the “first supply”), (b) the recipient of the first supply has paid an amount (in this subsection referred to as the “tax amount”) as or on account of tax with respect to that supply, and (c) under the Act or the agreement, the debtor has a right to redeem the property and the debtor exercises that right, the following rules apply: (d) the redemption of the property is deemed to be a supply of the property made by way of sale by the recipient of the first supply to the debtor for no consideration, and (e) where the property was redeemed from the recipient of the first supply and an amount has been reimbursed by the debtor to the creditor or that recipient on account of the tax amount, (i) except for the purposes of this section, the debtor is deemed not to have supplied the property to the creditor under subsection (1) or to have received a supply of the property at the time of the redemption, (ii) the debtor is deemed, for the purposes of section 261, to have paid tax in error at the time of the redemption equal to the amount so reimbursed, (iii) where the tax amount has been included in determining a rebate or an input tax credit claimed by that recipient in an application or return, the amount of the rebate or the input tax credit shall be added in de