CRA indicates that registration based on prospective commercial activity must be based on a demonstrable clear intention to do so
A charity may wish to make an ETA s. 211 election in order that rentals made by it of its real estate are deemed to be taxable supplies (thereby generating input tax credits to it). CRA accepted the proposition that where a charity would not qualify as being engaged in making taxable supplies until it made a s. 211 election, it nonetheless potentially could register for GST/HST purposes in advance of the effective date of the s. 211 election on the basis of the s. 141.1(3)(a) rule, which effectively assimilates start-up activities to commercial activity – provided that the charity was in a position “to demonstrate a clear intention to engage in a commercial activity.”
However, CRA effectively cautioned that doing so could potentially be fraught since s. 211(2) deems there to be a deemed taxable supply of the elected-upon real property on the day before the effective date of the election if the electing charity (or other public service body) did not acquire the property on the day of the election or become a registrant on the effective day of the election. Although it thus would be safest to become a registrant and have the effective date of the s. 211 election occur on the same day, CRA indicated that this self-supply rule also would not apply if the real property was acquired on the day before the effective day of the election.
CRA also indicated that election applies on a property-by-property basis, i.e., “the election applies to the entire legal description and not just to a portion of the real property.”