CRA confirms that the employer GST or HST liability for provision of administrative services to a pension plan potentially can be avoided through using a third-party servicer

CRA considers that an employer is required to self-assess itself for GST or HST under s. 172.1 on the "fair market value" of  administrative services it provides to a pension plan for its employees, even if those services all are quite minor (e.g., handling contributions out of payroll), without giving guidance as to how such fair market value is to be determined.  On the other hand, there generally will be no GST/HST liability under s. 172.1 where the employer receives a single supply of payroll processing services from a third party notwithstanding that the provision of administrative services to the pension plan is included.

Neal Armstrong  Summaries of 19 October 2011 Interpretation 133414 and 19 October 2011 Interpretation 130384 under ETA, .s 172.1(1) - pension activity and summary of 19 October 2011 Interpretation 130384 under ETA, s. 172.1(5).