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Canada: Distributed investment plans, investor information collection by October 2019

Canada: Distributed investment plans

Distributed investment plans—including investment limited partnerships—need to begin considering their collection of certain ownership details from their investors before 15 October 2019.

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Distributed investment plans must collect this information to help them comply with their upcoming goods and services tax / harmonized sales tax (GST/HST) and Quebec sales tax (QST) obligations. Investors that hold units in distributed investment plans are required to respond to these requests and share specific details as per the GST/HST and QST information-sharing rules. In addition, some investors will need to prepare to provide details to distributed investment plans in which they hold units—even if not specifically requested by the plans.

The distributed investment plans will need these details from their investors to prepare their calculations and update their systems so they can fulfill their 2020 GST/HST and QST obligations. The GST/HST information-sharing rules help determine that distributed investment plans that are “selected listed financial institutions” (SLFIs) have the data needed to satisfy their GST/HST obligations for the coming year. The investor information is used in calculating the plans' provincial attribution percentages. Plans that do not collect the data by 31 December and that have not requested the required information from their investors by 15 October may have their provincial attribution percentages affected due to specific calculations under the SLFI rules.

The specific details that must be requested and/or provided under the GST/HST and QST information-sharing rules, as well as the specific deadlines, depend on the type of investor (e.g., a “selected investor” or “qualifying investor” or other type of investor).

The failure to provide information as required under the GST/HST and QST information-sharing rules by the relevant deadlines can cause a penalty for each failure to provide information (the lesser of $10,000* or 0.01% of the total value of the units held by the investor in the distributed investment plan).


Read a July 2019 report prepared by the KPMG member firm in Canada

 

* = Canadian dollar

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