T-0.1 - Act respecting the Québec sales tax

Section 54.1.1 Disposition versions

2001-12-20

54.1.1. If a person (in this section and sections 54.1.2 to 54.1.5 referred to as the “lessee”) makes a supply by way of sale of corporeal movable property to another person (in this section referred to as the “lessor”), the lessee is not required to collect tax in respect of that supply and the lessor immediately makes a taxable supply of the property by way of lease to the lessee under an agreement (in this section and sections 54.1.2 to 54.1.5 referred to as the “original leaseback agreement”), the value of the consideration for a supply of the property by way of lease that, at a particular time, becomes due or is paid without having become due under a particular agreement that is the original leaseback agreement or a subsequent lease in respect of that agreement, is deemed to be equal to the amount determined by the formula

A − B.

For the purposes of this formula,

(1)  A is the value of the consideration as otherwise determined; and

(2)  B is the amount (in this section referred to as the “purchase credit”) that is equal to the lesser of

(a)  the value of A, and

(b)  the amount determined by the formula

C / D, or

(c)  if there is no unused total purchase credit within the meaning of subparagraph 1 of the third paragraph, zero.

For the purposes of the formula in subparagraph b of subparagraph 2 of the second paragraph,

(1)  C is the amount (in this section and section 54.1.5 referred to as the “unused total purchase credit”) by which the consideration for the supply by way of sale exceeds the total of all amounts each of which is the purchase credit that was determined in calculating the amount deemed under this section to be the value of any consideration that, before the particular time, became due or was paid without having become due under the original leaseback agreement or a subsequent lease in respect of that agreement; and

(2)  D is the specified number of remaining lease payments under the particular agreement at the particular time.

2001, c. 53, s. 284.