November 30, 2015, No. 2015-36. Many employers that offer registered pension plans to their employees must prepare to meet their upcoming December 31, 2015 obligations under the GST/HST and QST pension plan rules. The tax authorities continue to look closely to see whether employers have fulfilled their pension plan tax obligations and are examining rebate claims filed by pension entities of registered pension plans (“pension entities”). It’s essential that employers and pension entities carefully review how these rules apply since potential changes in their organization structures could affect their 2015 calculations. This summary can help you review your 2015 pension plan tax compliance obligations and the pension entity rebates as well as help you mitigate unrecoverable tax costs.
Employers and pension plans must remember that, generally, employers have a four-year assessment period, while pension entities of registered pension plans have only two years to claim a rebate. As such, it is particularly important that employers and pension entities minimize errors related to the pension plan rules for past and current obligations which could affect eligible rebate calculations.
The GST/HST and QST pension plan rules are particularly complex for certain pension plan structures. The types of investments that pension entities hold, such as units in a master or unit trust, can also add another level of intricacy. In addition, some entities in pension plan structures may not qualify for pension entity rebates, which will generally increase the tax costs.
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Information is current to November 26, 2015. The information contained in this TaxNewsFlash-Canada is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour 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 upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG’s National Tax Centre at 416.777.8500.