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The Holiday Rush – Assessing 2015 GST/HST Compliance

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With the New Year approaching, GST/HST registrants should be aware of a number of GST/HST compliance requirements for 2015, the more notable of which include as follows.

Section 156 Elections

Changes made to the election for closely held corporation and partnerships mean that ALL prior section 156
elections need to be filed (or refiled) in 2015. As the new rules have also substantively changed, taxpayers wishing to take the benefit of the special election in section 156 need to reassess their GST/HST situation and get proper advice on its application, and filing deadlines.

Note: Even if a taxpayer has a valid section 156 election in place, the new rules will require that the election be re-made and filed with CRA in 2015! Furthermore, because of the way the rules work, simply filing in December 2014, to get ahead of the game, for example, will not be good enough! Filing will be required within the 2015 Calendar Year, and the specific deadlines in 2015 will also depend on a taxpayer's particular reporting periods.

As a final note, it is expected that these filing requirements will make taxpayers at risk for CRA desk reviews and audits easier to identify, and it may be in a person's best intereststo re-examine GST/HST compliance before filing these section 156 elections.

Joint Venture Administrative Tolerance

In 2014, CRA announced that its tolerance for joint ventures operated through non-participating GST registered nominee corporations or non-participating GST registered bare trusts was coming to an end. CRA's new position – really an old position, but just recently re-emphasized by CRA – is that effective January 1, 2015, only active "participants" in the joint ventures (not mere non-participating the nominee or bare trusts "operators") must take steps to register for the GST/HST. The CRA has indicated that up and to December 31, 2014, CRA will not assess net tax in situations where non-participating nominee corporation or bare trusts are acting as the operators of the joint venture but participating, but that this administrative tolerance ends December 31, 2014. Accordingly, taxpayers involved in a joint venture that is operating by a non-participating nominee corporation or bare trust need to assess their GST/HST situation by January 1, 2015!

Click here for further information on the CRA's policies in this regard.

Financial Institution Filing Requirements

Lastly, by not least (especially if your business is a financial institution), taxpayers are reminded about a plethora of filing requirements for financial institutions, including pension plans. May financial institutions and pension plans will have December 31st year ends, and that means a June 30, 2015 requirement to file their annual returns, namely Form GST494, GST/HST Final Return For Selected Listed Financial Institutions, and/or Form GST111, Financial Institution GST/HST Annual Information Return.

Determining whether one is a "Selected Listed Financial Institution" or "SLFI" often requires legal advice, and many financial institutions, especially pension plans, have recently been getting a rude awakening to the fact that they are either caught as SLFI's, and required to file the GST 494, or worse, not caught by the SLFI rules but still required to file the GST111.

Lots of work here for GST/HST taxpayers in these areas, and all work that need completion by January 2015!

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