• Service: Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 3/13/2014

Canada - Review GST/HST “closely related group” elections  

March 13: Canada’s 2014 federal budget proposed a significant makeover to one of the most popular GST/HST* relief elections used by many businesses across Canada.

*Goods and services tax / harmonized sales tax

In light of the upcoming proposed changes, corporations that have elected to use the “closely related group” election to treat qualifying taxable supplies as being made for nil consideration soon need to review those elections to determine that all the related conditions are satisified.

Businesses will be required to file the election forms with the Canada Revenue Agency (CRA) for all closely related elections in 2015 (the actual date will vary depending on the circumstances). Any current elections not filed with the CRA within the timeline could expose the parties to potential tax liabilities.

Businesses may want to take this opportunity to review all their intercompany transactions and all current elections to take steps to address any requirements and potential issues.

Quebec is also proposing similar changes for QST purposes.

Read a March 2014 report prepared by the KPMG member firm in Canada: GST/HST Closely Related Relief Election Gets a Makeover

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now