Hyperlawhypertext legal database Select Luxury Items Tax Regulations current to 2026-03-31

SOR-2026-3175 Select Luxury Items Tax Regulations

Current to 2026-03-31 · last amended 2026-03-26

Contents

Definition

s. 1 — Definition of Act

In these Regulations, Act means the Select Luxury Items Tax Act.

Prescribed Aircraft and Vessels

s. 2 — Exclusion from subject aircraft – agreements before 2022

For the purposes of paragraph (g) of the definition subject aircraft in subsection 2(1) of the Act, an aircraft is a prescribed aircraft if ownership of the aircraft is transferred to a purchaser from a vendor by way of sale under an agreement in writing (in this section referred to as the “sale agreement”) and

s. 2(a)

it is the case that

s. 2(a)(i)

the purchaser entered into the sale agreement before 2022, or

s. 2(a)(ii)

the purchaser

s. 2(a)(ii)(A)

entered into the sale agreement after 2021, and

s. 2(a)(ii)(B)

entered into another agreement in writing before 2022 with the vendor in respect of the aircraft, under which the purchaser

s. 2(a)(ii)(B)(I)

paid a deposit in respect of the aircraft to the vendor before 2022,

s. 2(a)(ii)(B)(II)

agrees to enter into the sale agreement, and

s. 2(a)(ii)(B)(III)

agrees to forfeit the deposit if the purchaser fails to enter into the sale agreement;

s. 2(b)

the sale agreement was entered into between the purchaser and the vendor in the course of the vendor’s business of offering aircraft for sale;

s. 2(c)

the aircraft is delivered or made available in Canada in relation to the sale agreement;

s. 2(d)

possession of the aircraft is transferred to the purchaser under the sale agreement at a particular time;

s. 2(e)

the vendor is a registered vendor in respect of subject aircraft at the particular time; and

s. 2(f)

the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at, or at any time before, the particular time.

s. 3 — Exclusion from subject vessel – agreements before 2022

For the purposes of paragraph (h) of the definition subject vessel in subsection 2(1) of the Act, a vessel is a prescribed vessel if ownership of the vessel is transferred to a purchaser from a vendor by way of sale under an agreement in writing (in this section referred to as the “sale agreement”) and

s. 3(a)

it is the case that

s. 3(a)(i)

the purchaser entered into the sale agreement before 2022, or

s. 3(a)(ii)

the purchaser

s. 3(a)(ii)(A)

entered into the sale agreement after 2021, and

s. 3(a)(ii)(B)

entered into another agreement in writing before 2022 with the vendor in respect of the vessel, under which the purchaser

s. 3(a)(ii)(B)(I)

paid a deposit in respect of the vessel to the vendor before 2022,

s. 3(a)(ii)(B)(II)

agrees to enter into the sale agreement, and

s. 3(a)(ii)(B)(III)

agrees to forfeit the deposit if the purchaser fails to enter into the sale agreement;

s. 3(b)

the sale agreement was entered into between the purchaser and the vendor in the course of the vendor’s business of offering vessels for sale;

s. 3(c)

the vessel is delivered or made available in Canada in relation to the sale agreement;

s. 3(d)

possession of the vessel is transferred to the purchaser under the sale agreement at a particular time;

s. 3(e)

the vendor is a registered vendor in respect of subject vessels at the particular time; and

s. 3(f)

the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject vessels under Division 5 of Part 1 of the Act at, or at any time before, the particular time.

s. 4 — Partial ownership

For the purposes of sections 2 and 3, a particular person transfers ownership of an aircraft or vessel to another person even if, at the time ownership is transferred to the other person, the particular person retains partial ownership or transfers partial ownership to any third person.

Sale of Partial Ownership

s. 5 — Prescribed circumstances – taxable amount
s. 5(1)

For the purposes of subsection 18(7) of the Act, the circumstances set out in this section are prescribed circumstances.

s. 5(2) — Taxable amount – sale of partial ownership

Subject to subsection (3), for the purposes of section 18 of the Act and for the purposes of determining under section 34 of the Act the amount of tax payable under section 18 of the Act, if a vendor sells only partial ownership of a subject item to a purchaser, the taxable amount of the subject item is the amount determined by the formula A + B where A is the greater of the value of the consideration for the sale of the subject item and the retail value of the subject item at the time at which the sale is completed; and B is the total of all amounts, each of which is the greater of the value of the consideration for, and the fair market value of, an improvement in respect of the subject item that is provided by the vendor, or a person that does not deal at arm’s length with the vendor, in connection with the sale of the subject item, but only to the extent that the amount is not included in the determination of A.

s. 5(3) — Multiple sales of partial ownership

For the purposes of section 18 of the Act and for the purposes of determining under section 34 of the Act the amount of tax payable under section 18 of the Act, if a particular sale of only partial ownership of a subject item between a vendor and a purchaser is completed at a particular time and if another sale of only partial ownership of the subject item between the vendor and a purchaser is completed at or after the particular time, the taxable amount of the subject item in respect of the other sale is equal to zero if

s. 5(3)(a)

the taxable amount of the subject item in respect of the particular sale is determined under subsection (2); and

s. 5(3)(b)

before the particular time, the vendor entered into an agreement in writing for the particular sale and an agreement in writing for the other sale.

Exportation

s. 6 — Prescribed circumstances – aircraft
s. 6(1)

For the purposes of section 33 of the Act, the circumstances set out in this section are prescribed circumstances.

s. 6(2) — Tax not payable – aircraft

The tax under section 18 of the Act in respect of a sale of a subject aircraft by a vendor to a purchaser is not payable if

s. 6(2)(a)

the vendor is a registered vendor in respect of subject aircraft at the particular time at which the sale is completed;

s. 6(2)(b)

the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at the particular time;

s. 6(2)(c)

an exemption certificate does not apply in respect of the sale in accordance with section 36 of the Act;

s. 6(2)(d)

the subject aircraft

s. 6(2)(d)(i)

is to be exported as soon after the particular time as is reasonable having regard to the circumstances surrounding the exportation, the sale and, if applicable, the normal business practice of the purchaser and vendor,

s. 6(2)(d)(ii)

is not to be used in Canada at any time before the exportation except to the extent reasonably necessary or incidental to its manufacture, offering for sale, transportation or exportation, and

s. 6(2)(d)(iii)

is not to be registered with the Government of Canada or a province before the exportation except if the registration is done solely for a purpose incidental to its manufacture, offering for sale, transportation or exportation; and

s. 6(2)(e)

the vendor maintains evidence satisfactory to the Minister of the exportation of the subject aircraft.

s. 7 — Prescribed circumstances – aircraft
s. 7(1)

For the purposes of subsection 36(3) of the Act, the circumstances set out in this section are prescribed circumstances.

s. 7(2) — Exemption certificate – aircraft

Subject to subsection (3), an exemption certificate applies in respect of a sale of a subject aircraft by a vendor to a purchaser if

s. 7(2)(a)

the vendor is a registered vendor in respect of subject aircraft at the particular time at which the sale is completed;

s. 7(2)(b)

the certificate is made in prescribed form containing prescribed information;

s. 7(2)(c)

the certificate includes

s. 7(2)(c)(i)

the identification number of the subject aircraft,

s. 7(2)(c)(ii)

a declaration by the purchaser that

s. 7(2)(c)(ii)(A)

the subject aircraft is to be exported as soon after the particular time as is reasonable having regard to the circumstances surrounding the exportation, the sale and, if applicable, the normal business practice of the purchaser and vendor,

s. 7(2)(c)(ii)(B)

the subject aircraft is not to be used in Canada at any time before the exportation except to the extent reasonably necessary or incidental to its manufacture, offering for sale, transportation or exportation,

s. 7(2)(c)(ii)(C)

the subject aircraft is not to be registered with the Government of Canada or a province before the exportation except if the registration is done solely for a purpose incidental to its manufacture, offering for sale, transportation or exportation, and

s. 7(2)(c)(ii)(D)

the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at the particular time, and

s. 7(2)(c)(iii)

an acknowledgement by the purchaser that the purchaser is assuming liability to pay any amount of tax in respect of the subject aircraft that is or may become payable by the purchaser under the Act;

s. 7(2)(d)

the purchaser provides to the vendor, in a manner satisfactory to the Minister, the certificate in respect of the sale; and

s. 7(2)(e)

the vendor retains the certificate.

s. 7(3) — Exemption certificate – multiple purchasers

If a subject aircraft is sold by a vendor to more than one purchaser, an exemption certificate applies in respect of the sale of the subject aircraft only if, in the absence of this subsection, an exemption certificate would apply in respect of each purchaser in accordance with subsection (2).

Miscellaneous

s. 8 — Information return – prescribed person

For the purposes of subsection 59(1) of the Act, a person is a prescribed person for a reporting period of the person if the person

s. 8(a)

is a registered vendor in respect of subject vehicles throughout the reporting period; and

s. 8(b)

is not otherwise registered, or required to be registered, under Division 5 of Part 1 of the Act at any time during the reporting period.

s. 9 — General penalty – prescribed provision

For the purposes of paragraph 119(a) of the Act, subsection 71(2) of the Act is a prescribed provision.

Agreements Before 2022

s. 10 — Prescribed circumstances
s. 10(1)

For the purposes of section 33 of the Act, the circumstances set out in this section are prescribed circumstances.

s. 10(2) — Tax not payable on sale

Neither the tax under section 18 of the Act nor the tax under section 29 of the Act in respect of a subject item that is sold by a vendor to a purchaser is payable if the purchaser entered into an agreement in writing before 2022 with the vendor for the sale of the subject item in the course of the vendor’s business of offering for sale that type of subject item.

s. 10(3) — Tax not payable on import

The tax under section 20 of the Act in respect of a subject item that is imported is not payable if

s. 10(3)(a)

the importer entered into an agreement in writing before 2022 with a vendor for the transfer of ownership of the subject item to the importer by way of sale; and

s. 10(3)(b)

the agreement was entered into in the course of the vendor’s business of offering for sale that type of subject item.

s. 10(4) — Tax not payable on use

The tax under section 26 of the Act in respect of a subject item that is used in Canada at a particular time is not payable if

s. 10(4)(a)

a person entered into an agreement in writing before 2022 with a vendor for the transfer of ownership of the subject item to the person by way of sale;

s. 10(4)(b)

the agreement was entered into in the course of the vendor’s business of offering for sale that type of subject item; and

s. 10(4)(c)

the person is an owner of the subject item at the particular time.