Businesses must remember that they are required to register certain entities for goods and services tax / harmonized sales tax (GST/HST) purposes on or before an acquisition or reorganization.
Similar rules apply for Quebec sales tax (QST) purposes.
Any entity acquiring taxable assets as part of an overall reorganization or acquisition is required to register for GST/HST purposes, on or before the date of the transaction. It is important that the correct entity is registered, particularly in situations involving partnerships or when legal and beneficial ownership is held by different entities.
There is a common perception that any GST/HST incurred before registration can be recovered once the entity is registered; however, that is only true in very limited circumstances.
Concerning this reminder for GST/HST registration, some additional items to note include:
Read an October 2019 report prepared by the KPMG member firm in Canada
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