Global

Details

  • 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




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