Canada: Investment limited partnerships’ annual GST/HST and QST returns due 30 June 2022

Investment limited partnerships that indirectly invest in real property and qualify as “selected listed financial institutions” (SLFIs)

Annual GST/HST and QST returns due 30 June 2022

Investment limited partnerships that indirectly invest in real property and qualify as “selected listed financial institutions” (SLFIs) for goods and services tax / harmonized sales tax (GST/HST) purposes must file a GST/HST final return by 30 June 2022.

This requirement may affect investment limited partnerships in “stacked” partnerships in investment structures. Structures investing in real property need to carefully review their entities in order to identify all SLFI investment limited partnerships, as well as other entities that may also qualify as SLFIs, and meet all their GST/HST filing obligations.

As part of completing and filing their annual SLFI GST/HST final return, SLFI investment limited partnerships are required to calculate a complex adjustment to their net tax that may result in a tax refund or additional tax liability in some situations.

Similar rules apply for Quebec sales tax (QST) purposes. 

KPMG observation

Taxpayers need to identify which limited partnerships in their structure qualify as investment limited partnerships and determine how the SLFI rules apply to these SLFI investment limited partnerships. These rules include additional compliance requirements for SLFI investment limited partnerships, under which they must determine the residency and investor percentages of their investors, and use these details to determine their ultimate GST/HST and QST tax liability (or refund) in their completed SLFI returns due 30 June.

Failing to identify SLFI investment limited partnerships could lead to compliance issues and penalties for failure to file the proper GST/HST and QST returns, as well as additional tax liabilities or missed refunds.

Read an April 2022 report prepared by the KPMG member firm in Canada

 

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