• Service: Tax, Global Indirect Tax, International Tax
  • Type: Regulatory update
  • Date: 2/10/2014

Canada - Temporary GST relief available for joint venture projects 

February 10:  The Canada Revenue Agency (CRA) issued a temporary administrative policy not to assess goods and services tax / harmonized sales tax (GST/HST) in certain circumstances when nominee corporations or bare trusts have been acting as operators of a joint venture, but did not qualify as participants.

In general, the CRA could assess the nominee corporations or bare trusts and thereby deny the input tax credits (ITCs) claimed for GST/HST paid on property and services acquired in the course of the joint venture’s commercial activities. Although other participants in the joint venture may be able to claim these ITCs, this is not always the case.

The CRA’s temporary administrative “tolerance” policy (i.e., the temporary policy) is available for reporting periods ending before 1 January 2015.

KPMG observation

As a result of the CRA’s temporary policy, joint ventures need to review their structures and determine if they meet the GST/HST filing rules before 1 January 2015.

Alternatively, some joint ventures and other structures with nominee corporations that have claimed ITCs may consider other approaches to allow them to claim ITCs.

Read a February 2014 report (PDF 46KB) prepared by the KPMG member firm in Canada: New GST Relief for Joint Venture Projects

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