CRA announces that it will no longer “tolerate” nominees as joint venture operators for HST/GST purposes after December 2014

Nominee corporations for real estate joint ventures frequently have filed the HST/GST returns for the joint venture and remitted the applicable tax.  CRA considers this practice to be improper if (as is normally the case) the nominee does not have "the managerial or operational control" of the joint venture.  However, CRA administratively has refrained from assessing the co-owners for their failure to report the applicable JV transactions on their own returns and remit the tax, provided that the right amount of tax has been reported and remitted under the nominee returns (although Revenu Québec on occasion has been more active on this front).

CRA has now announced that "this administrative tolerance is available [only] for reporting periods ending before January 1, 2015," presumably meaning that those who do not regularize their JV arrangements by then will start getting assessed.

Neal Armstrong.  Summaries of GST/HST Notice 284 "Bare Trusts, Nominee Corporations and Joint Ventures" under ETA – ss. 273(1), 240(3)(a), 169(1), 177(1.1).