• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 4/25/2013

Canada - GST/HST pension plan relief 

April 25: Employers and registered pension plans may want to take advantage of some changes to the “GST/HST pension plan rules” announced in Canada’s recent federal budget.

Under the GST/HST pension plan rules, many employers with registered pension plans are deemed to make taxable supplies to pension entities of their pension plans on the last day of their fiscal year and must remit an amount of GST/HST related to those supplies. The deemed supplies can include external costs, such as actuarial costs, as well as internal costs—such as salaries of employees responsible to collect and remit pension contributions

The 2013 federal budget proposes two measures that could reduce some employers’ compliance requirements:

  • An election to allow qualifying employers not to account for GST/HST on actual taxable supplies made to pension entities
  • A relief measure for some employers with limited amounts of deemed taxable supplies

Employers may want to consider their situations because they may actually benefit more if they make a new election for their 2014 fiscal year—instead of 2013.

Read an April 2013 report prepared by the KPMG member firm in Canada: Employers—New GST/HST Relief Available Under Pension Plan Rules

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