Section 136.1 — Excise Tax Act: Lease, etc. of property

For the purposes of this Part, where a supply of property is made by way of lease, licence or similar arrangement to a person for consideration that includes a payment that is attributable to a period (in this subsection referred to as the “lease interval”) that is the whole or a part of the period during which possession or use of the property is provided under the arrangement, the supplier is deemed to have made, and the person is deemed to have received, a separate supply of the property for the lease interval; the supply of the property for the lease interval is deemed to be made on the earliest of the first day of the lease interval, the day on which the payment that is attributable to the lease interval becomes due, and the day on which the payment that is attributable to the lease interval is paid; the payment that is attributable to the lease interval is deemed to be consideration payable in respect of the supply of the property for the lease interval; and if, in the absence of paragraph (a), the supply of the property under the arrangement would be deemed to be made in or outside Canada, all of the supplies of the property that are, because of that paragraph, deemed to be made under the arrangement are deemed to be made in or outside Canada, as the case may be. For the purposes of this Part, if a recipient of a supply by way of lease, licence or similar arrangement of tangible personal property exercises an option to purchase the property that is provided for under the arrangement and the recipient begins to have possession of the property under the agreement of purchase and sale of the property at the same time and place as the recipient ceases to have possession of the property as lessee or licensee under the arrangement, that time and place is, for greater certainty, deemed to be the time and place at which the property is delivered or made available to the recipient in respect of the supply by way of sale of the property to the recipient. For the purposes of this Part, where a supply of a service is made to a person for consideration that includes a payment that is attributable to a period (in this subsection referred to as a “billing period”) that is the whole or a part of the period during which the service is or is to be rendered under the agreement for the supply, the supplier is deemed to have made, and the person is deemed to have received, a separate supply of the service for the billing period; the supply of the service for the billing period is deemed to be made on the earliest of the first day of the billing period, the day on which the payment that is attributable to the billing period becomes due, and the day on which the payment that is attributable to the billing period is made; the payment that is attributable to the billing period is deemed to be consideration payable in respect of the supply of the service for the billing period; and if, in the absence of paragraph (a), the supply of the service under the agreement would be deemed to be made in or outside Canada, all of the supplies of the service that are, because of that paragraph, deemed to be made under the agreement are, except in the case of a telecommunication service, deemed to be made in or outside Canada, as the case may be.