Canada: Investors to share data with investment plans for GST/HST compliance
Canada: Investors to share data with investment plans
Distributed investment plans—including investment limited partnerships—need to obtain specific details from investors in order to comply with the GST/HST and QST* obligations.
*GST/HST and QST = goods and services tax / harmonized sales tax and Quebec sales tax
The investment plans need to obtain certain information from investors, and thus need to be preparing to request in writing specific details from many of their investors by 15 October 2020 to meet the GST/HST and QST requirements. Also, certain investors need to start the process of providing specific information to their investment plans—even if they do not receive any formal request.
Complying with the GST/HST and QST information sharing rules means that distributed investment plans have the proper information to update their systems and to calculate certain amounts that must be included in their GST/HST and QST returns. Plans that do not collect the proper data within specific deadlines may see their tax costs increase, while investors may face penalties if they do not share the data within specific timelines as required under the GST/HST and QST information sharing rules.
The GST/HST information sharing rules can vary, based on investor type. Some common questions for distributed investment plans and investors are as follows:
- Which investment plans must request information from investors?
- Many distributed investment plans that are “selected listed financial institutions” (SLFIs) under the GST/HST and QST rules must request information from their investors.
- Distributed investment plans include mutual fund trusts, mutual fund corporations, investment corporations, mortgage investment corporations, unit trusts, certain pension entities, segregated funds and investment limited partnerships.
- Which investors must provide information to distributed investment plans upon receiving a request?
- Most investors, other than individuals, are required to provide information if they receive a written request from distributed investment plans (e.g., distributed investment plans that invest in other distributed investment plans, corporations, partnerships and pension plans).
- Some of the required information may differ based on investor type.
- Which investors must provide information to distributed investment plans without receiving a request?
- Some investors, known as "qualifying investors", must provide specific information to distributed investment plans annually—even if they do not receive a written request from the plans.
Read an August 2020 report prepared by the KPMG member firm in Canada
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