CRA was prepared to accept that a nominee could be a valid GST registrant

CRA quoted with approval the criteria stated in Westcan Malting as to what is a joint venture at law before accepting that a co-ownership arrangement before it likely was a joint venture (so that a joint venture election under ETA s. 273 under which one of the co-owners was appointed as operator was valid).

The co-owned land was held through a nominee, which was registered. CRA stated that its comments were “based on the understanding that the Nominee is engaged in commercial activities as a result of its agency activities on behalf of ACo and BCo and therefore is correctly registered for the GST/HST.”

Quite at odds with the joint venture election, the Nominee was appointed as the co-owners’ agent and was authorized and directed to claim input tax credits on its return on their behalf. Without finding it necessary to discuss the clash between this approach and the GST/HST joint venture election, CRA simply noted that it was contrary to basic tenets of agency law for the agent to treat its purchases as being incurred on its own account, so that the ITCs were only claimable pro rata by the co-owners rather than by the nominee.

Neal Armstrong. Summaries of 14 October 2016 Interpretation 170549 under ETA s. 273(1), s. 240(3)(a), s. 169(1) and General Concepts – Agency.