Written By John (Jay) A. Winters, Jesse I. Goldman and Douglas Chen
Section 156(2) of the Excise Tax Act allows "qualifying members" of groups of closely related Canadian partnerships or corporations to elect to have taxable supplies between each other deemed to have been made for no consideration. This exempts such qualifying members from collecting and remitting GST/HST for those supplies. Generally, corporations or partnerships having common ownership of 90 percent or more are considered closely related.
Currently, electing parties are required to keep the completed prescribed form with their own files, but are not required to file it with the CRA. However, starting January 1, 2015, electing parties will have to file new elections with the CRA before the first party to the election files its GST/HST return for the period that includes the day on which the election becomes effective. Further, the new legislation deems any pre-2015 elections that were required to be filed under some older provisions never to have been filed at all. Accordingly, any pre-2015 elections that are intended to remain valid (whether it has been previously filed or not), must be filed (or re-filed) before the end of 2015.
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