Friday April 4, 2014

Important Notice: Get Ready to File GST/HST Closely Related Elections

Authored by: Ted R. Sawa Posted in: Legal Updates

Many groups of related corporations and/or partnerships rely on the election for closely related persons under section 156 of the Excise Tax Act (Canada) to allow the group to treat related party transactions as having been made for nil consideration.  Based on this election, GST/HST does not have to be collected and remitted.

Since 1992, the prescribed form for this election, GST 25, had to be completed by the electing parties but did not have to be filed with the Canada Revenue Agency.   This was intended to simplify compliance with the Excise Tax Act.

As a result of the 2014 federal budget, these elections must now be filed with the Canada Revenue Agency.  If the election is in effect now, or comes into effect before 2015, the election must be filed after January 1, 2015 and before January 1, 2016.  It cannot be filed before 2015.

If an election takes effect on or after January 1, 2015, the filing deadline is the earliest of the GST/HST filing deadlines of the parties making the election. 

This is an important change and signals that the Canada Revenue Agency will take a closer look at transactions within corporate groups.  Therefore, we recommend that companies prepare for 2015 by:

  1. Reviewing transactions within groups of related corporations and/or partnerships to determine if the election under section 156 of the Excise Tax Act is available; and
  2. Preparing to file elections in 2015: both elections that are currently in force and those that will be made in the future.

For further information about GST/HST and other corporate tax planning issues, please contact a member of our Tax Law team.

Share This Post:

Recent Blog Posts

News | Wednesday April 10, 2019

Make A Will Week

Posted in:

April 7 to 13, 2019 is “Make a Will Week” in British Columbia, which encourages the public to make a Will or bring an existing Will up-to-date.

Read full article
News | Wednesday March 27, 2019

BOYNECLARKE LLP Announces Dartmouth General Hospital Foundation as their Scotiabank Charity Challenge Recipient

Posted in:

BOYNECLARKE LLP has announced their participation in the Scotiabank Charity Challenge in conjunction with the Scotiabank Blue Nose Marathon, directing all their fundraising efforts to the Dartmouth General Hospital Foundation.

Read full article
News | Wednesday February 20, 2019

Kathryn A. Raymond, Q.C. Appointed to Expert Panel on Modern Federal Labour Standards

Posted in:

BOYNECLARKE LLP is pleased to announce that our partner, Kathryn A. Raymond Q.C., Arb., Med., has been appointed to the Expert Panel by the federal Minister.

Read full article
News | Monday February 4, 2019

Debi I. Conrad Appointed as Queen's Counsel

Posted in:

BOYNECLARKE LLP is proud to announce the appointment of Debi I. Conrad as Queen’s Counsel.

Read full article