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Pension plans — June 30 GST/HST deadline coming soon

Pension plans — June 30 GST/HST deadline coming soon

Many pension entities and master trusts must file GST/HST and QST returns by June 30, 2020

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As reminder, many pension plans and master pension entities must prepare to file their annual GST/HST and QST returns by June 30, 2020. Specifically, affected entities that qualify as selected listed financial institutions (SLFIs) must file annual GST/HST and QST final returns for SLFIs within six months after their year-end, whether or not they are registered for GST/HST and QST purposes. Conversely, the June 30 filing deadline may also apply to similar entities that are not SLFIs but are registered for GST/HST and QST. Such entities may have to file annual GST/HST and QST information returns for financial institutions, due within six month after the entity's year-end (for full reminder, see TaxNewsNow, "Financial Institutions — Prepare now for GST/HST annual returns").

Notably, the recent filing extensions for certain income tax returns, announced by the CRA in late May 2020, do not apply to annual GST/HST and QST final returns for SLFIs, or the annual GST/HST and QST information returns for financial institutions.

Background

Many pension entities of registered pension plans offered to employees and master pension entities may qualify as SLFIs. As such, they may be subject to extensive GST/HST and QST compliance obligations and face return deadlines of no later than June 30, 2020. Similar entities that are not SLFIs but are registered for GST/HST and QST purposes, may also have tax obligations and returns due by June 30, 2020. (See TaxNewsFlash-Canada 2019-41 "Employers and Pension Plans – Meet GST/HST Obligations".)

It should be noted that some pension entities within the same pension plan structure may have different GST/HST and QST SLFI statuses, or may be considered SLFIs for GST/HST purposes, but not for QST purposes (or vice versa). Where a pension entity has a differing SLFI status for GST/HST and QST purposes, the entity must carefully determine all of its GST/HST and QST compliance obligations.

Who qualifies are a SLFI?

In general, a pension entity or a master pension entity may qualify as a SLFI if it has a permanent establishment in an HST province and a permanent establishment in another province. Similar rules apply for QST purposes. Specifically, a pension entity is considered to have a permanent establishment in a particular province if it has members residing in an HST province and members residing in another province, in which case it will generally qualify as a GST/HST SLFI. It will also be considered a QST SLFI if it has plan members residing in Quebec and in another province.

The rules are different for master pension entities, which are considered to have a permanent establishment in a particular province if they qualify, under the laws of Canada or a province, to sell or distribute units in a particular province or if a person holding one or more units resides in the particular province. As such, many master pension entities are GST/HST SLFIs as well as QST SLFIs.

SLFI pension entities

Annual GST/HST and QST final returns for SLFIs

Ahead of their filing deadlines, pension entities and master pension entities that qualify as SLFIs should review the following questions to help them assess whether their obligations or calculations will change this year:

  • Has its GST/HST and QST tax status changed this year?
  • Was the pension entity a qualifying small investment plan (QSIP) last year?
  • Did members of the pension entity relocate during the year?
  • Did the pension entities or master pension entities import any taxable services this year?

Non-SLFI pension entities

Annual GST/HST or QST information returns for financial institutions

Pension entities and master pension entities that do not qualify as SLFIs but who are GST/HST registered may also have a June 30 filing deadline under the GST/HST or QST rules. Such entities may have to file GST/HST or QST annual information returns for financial institutions by June 30, 2020 (see TaxNewsNow, "Financial Institutions — Prepare now for GST/HST annual returns").

Some entities face both deadlines

Affected entities must carefully determine their tax status under the GST/HST and QST rules, as they may qualify as a SLFI under GST/HST rules but not under the QST rules (or vice-versa). In such cases, entities may have to file an annual GST/HST and QST final return for SLFIs as well as an annual GST/HST and QST information return for financial institutions by June 30, 2020 (see TaxNewsNow, "Financial Institutions — Prepare now for GST/HST annual returns").

We can help

KPMG can help you determine how the SLFI rules apply to your entities and may affect your business. We can also assist you with your indirect tax compliance obligations, including the GST/HST and/or QST returns. In addition, we can help identify areas where you may be able to manage certain tax costs and any elections that should be considered.

For more information, please contact your KPMG adviser or one of the following Indirect Tax professionals:

Annette Beshwaty
T: 514-840-2349
E: abeshwaty@kpmg.ca

Luc Lucato
T: 416-777-3921
E: llucato@kpmg.ca

Seema Agnihotri
T: 416-777-3923
E: sagnihotri@kpmg.ca

Jennifer Muirhead
T: 403-691-8291
E: jennifermuirhead@kpmg.ca

Information is current to June 2, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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