Canada: Reminder, financial institutions’ annual GST/HST and QST returns due 30 June 2022

Selected listed financial institution entities must file their final returns by 30 June 2022 for their 2021 fiscal year

Reminder, financial institutions’ annual GST/HST and QST returns due 30 June 2022

Financial institutions in Canada are reminded of the 30 June 2022 deadline for filing annual goods and services tax (GST), harmonized sales tax (HST), and Quebec sales tax (QST) returns.

Financial institutions that qualify as "selected listed financial institutions" must file the annual GST/HST and QST final return within six months after their year-end. Selected listed financial institution entities that have a 31 December year-end must file their final returns by 30 June 2022 for their 2021 fiscal year.

In general, a financial institution qualifies as a selected listed financial institution if it has a permanent establishment in an HST province and in another province for GST/HST purposes, or in Quebec and in another province for QST purposes. Selected listed financial institutions must determine which GST/HST rules apply to their specific facts and circumstances to determine whether they have a permanent establishment in a particular province.

KPMG observation

Affected entities—including many financial institutions, pension plans, limited investment partnerships, and entities that are not typical financial institutions—need to consider preparing for filing their annual GST/HST and QST returns and determining they are accurately and timely filed.

Selected listed financial institutions need to carefully review all their allocation methods under the special attribution method. In general, the special attribution method is a complex formula that selected listed financial institutions must use to calculate an adjustment to their net tax that is included in their annual selected listed financial institution GST/HST final return. The special attribution method essentially recalculates the entity's tax costs based on special rules that determine where it operates. These calculations take into account various criteria for different types of entities. Similar rules apply for QST purposes. In some cases, an error in the allocation methods may translate into a tax recovery or an additional amount of tax to pay for current and prior reporting periods.

Financial institutions must also review and confirm that they are fulfilling all their self-assessment obligations. Because the GST/HST and QST self-assessment rules are complex and can vary based on an entity's various operations, affected businesses may benefit by preparing their GST/HST and QST annual returns early and reviewing their self-assessment obligations in detail.

The Canada Revenue Agency (CRA) continues to closely review these returns, including the self-assessment obligations, and are cross-referencing them with details on other reports, such as transfer pricing and other income tax filings.

Read a March 2022 report prepared by the KPMG member firm in Canada

 

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