Canada: Cosely related group elections due 31 December | KPMG | GLOBAL

Canada: Corporate GST “closely related group” elections due 31 December

Canada: Cosely related group elections due 31 December

Businesses that have GST/HST and QST* “closely related group” elections need to make sure that they file all the required forms with the Canada Revenue Agency (CRA) and Revenue Quebec based on new rules introduced in 2014.


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*Goods and services tax / harmonized sales tax and Quebec sales tax


Corporations and partnerships with elections that applied before 1 January 2015 that were still in place on that date but have not yet filed the election forms with the tax authorities have until 31 December 2015, to do so under a transitional measure. Before filing these forms with the CRA or Revenue Quebec, if applicable, businesses need to evaluate whether they still meet all the conditions of the “closely related” elections and that they have properly completed the required forms. Corporations and partnerships that have undertaken reorganization transactions, over the years, such as sales of shares, need to take additional care to determine that they continue to qualify to make the election. 

KPMG observation

While some businesses may qualify to make the election for GST/HST purposes, some corporations and partnerships in their closely related group across Canada may not meet the election conditions for QST purposes. A careful review of the corporations and partnerships in a group will help in determining which entities are eligible to make the “closely related” group election, which inter-company transactions are eligible under the elections, and what steps to take to address potential errors. 


Read a November 2015 report prepared by the KPMG member firm in Canada: Corporate Groups — File GST Closely Related Elections by December 31

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