Distributed investment plans—such as mutual and segregated funds as well as unit trusts—will soon request GST/HST and QST (Canadian indirect tax) information from some of their investors. However, some investors are required to provide GST/HST and QST information to distributed investment plans even if they do not receive a written request from the plans. The type of information that is required to be provided and the related deadlines will depend on the investor. The GST/HST and QST rules provide significant penalties for investors that do not comply with the information sharing requirements.
Generally, "qualifying investors" that hold units in a distributed investment plan are required to provide specific information no later than 15 November 2015 even if they do not receive a written request from the plan. Other investors that receive a written request from a distributed investment plan must respond by the later of 15 November, or 45 days after the day on which the investor receives the request.
These GST/HST information sharing rules help determine that the distributed investment plans have the required information to fulfill their own GST/HST and QST obligations, including the calculations of their provincial attribution percentages. The rules also allow the investment plan managers to have the proper information to calculate the appropriate amount of tax to collect from the distributed investment plans. The information shared may ultimately affect the value of the units of the distributed investment plans.
Similar rules apply for QST purposes. However, some investors may have different QST-related obligations and information to provide than under the GST/HST rules.
Read a September 2015 report prepared by the KPMG member firm in Canada: Investment Plans HST Reporting Requirements – Important 15 November Deadline
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