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Tax Alert No. 61, 15 December 2020
Participating employers with a monthly Goods and Services Tax/Harmonized Sales Tax/Quebec Sales Tax (GST/HST/QST) filing frequency must remit the GST/HST/QST liability on the deemed supplies made to certain pension entities and master pension entities by 31 January 2021. As such, it is important that employers obtain the relevant information required to report the tax in a timely manner. The respective pension entities will be ineligible to claim rebates to the extent that such amounts are not remitted on time.
Section 172.1 of the Excise Tax Act (the ETA) and sections 289.5, 289.6 and 289.7 of An Act respecting the Quebec Sales Tax (the QST Act) deem participating employers to have collected GST/HST/QST on certain supplies made to pension entities and to master pension entities (collectively referred to as Pension Entities), on the last day of a fiscal year. As a result, employers that are required to remit GST/HST/QST on a monthly basis and that have a 31 December year-end must remit the GST/HST/QST amounts that are due with respect to the deemed supplies made to Pension Entities by 31 January 2021. Accordingly, a participating employer that is registered for GST/HST/QST purposes, with a monthly filing frequency, should include the tax in its GST/HST/QST return for the 1 December 2020 to 31 December 2020 reporting period.
A pension entity will not be able to claim its respective GST/HST/QST rebates on 33% of the tax paid to the extent that the participating employers either remit the GST/HST/QST collected in a subsequent return, or do not report and remit the GST/HST/QST collected as part of the December 2020 GST/HST/QST return.
In order to calculate the potential GST/HST/QST liability, employers must obtain the following data:
It should be noted that some relief measures are available to employers that make a relatively small amount of deemed supplies to Pension Entities.
For more information, contact your EY or EY Law tax advisor, or one of the following professionals.
Jean-Hugues Chabot
+1 514 874 4345 | jean-hugues.chabot@ca.ey.com
Jadys Bourdelais
+1 514 879 6380| jadys.bourdelais@ca.ey.com
David D. Robertson
+1 403 206 5474 | david.d.robertson@ca.ey.com
Jan Pedder
+1 416 943 3509 | jan.s.pedder@ca.ey.com
Sania Ilahi
+1 416 941 1832 | sania.ilahi@ca.ey.com
Tariq Nasir
+1 416 932 6143 | tariq.nasir@ca.ey.com
Budget information: For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.