Canada: Pensions, financial entities reminded to file GST/HST and QST returns by 30 June 2020

Canada: Pensions, financial entities

Many pension entities and master trusts must file goods and services tax (GST) / harmonized sales tax (HST) and Quebec sales tax (QST) returns by 30 June 2020.

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  • 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.
  • The filing deadline of 30 June 2020 may also apply to similar entities that are not SLFIs but are registered for GST/HST and QST purposes. 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

Recent filing extensions for certain income tax returns (extensions allows in response to the coronavirus pandemic) 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

Pension entities of registered pension plans offered to employees and master pension entities may qualify as SLFIs and be subject to GST/HST and QST compliance obligations and thus required to file returns no later than 30 June 2020. Similar entities that are not SLFIs but that are registered for GST/HST and QST purposes may also have tax obligations and returns due by 30 June 2020.

Some pension entities within the same pension plan structure may have different GST/HST and QST obligations because of their SLFI status, or may be considered SLFIs for GST/HST purposes, but not for QST purposes (or vice versa). GST/HST and QST compliance obligations must be determined for pension entities with a differing SLFI status for GST/HST and QST purposes.

What qualifies as an SLFI?

In general, a pension entity or a master pension entity may qualify as an 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 returns for SLFIs

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

  • Has the 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 are GST/HST-registered may also have a 30 June 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 30 June 2020.

Some entities face both deadlines

Affected entities must carefully determine their tax status under the GST/HST and QST rules because they may qualify as an SLFI under the GST/HST rules but not under the QST rules (or vice versa). In such situations, 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 30 June 2020.


Read a June 2020 report prepared by the KPMG member firm in Canada

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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