Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 162930
Dear [Client]:
Subject: GST/HST INTERPRETATION
Requirement to file an information return for reporting institutions
Thank you for your letter of June 9, 2014 and subsequent letter on April 27, 2015, in respect of the requirements under subsection 273.2(3) of the Excise Tax Act to file an information return for reporting institutions.
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand that […][Institution A] Pension Plan (Plan 1) and […][Institution A] Pension Plan (Plan 2) require information regarding each plan’s requirement to file Form GST111, Financial Institution GST/HST Annual Information Return.
Plan 1 was established on [mm/dd/yyyy], and is a trust that is governed by a registered pension plan. Plan 1 has a fiscal year end of December 31 and is currently registered for GST/HST purposes under the Business Number […].
Plan 2 is a trust governed by a registered pension plan. It also has a fiscal year end of December 31 and is currently registered for GST/HST purposes under the Business Number […].
[Institution A] is currently responsible for the administration of both plans.
Both plans file annual GST/HST returns using Form GST34, Goods and Services Tax/Harmonized Sales Tax Return for Registrants. They also claim annual GST/HST pension entity rebates using Form RC4607, GST/HST Pension Entity Rebate Application and Election. Neither plan meets the definition of a selected listed financial institution for GST/HST purposes and therefore neither plan is required to file Form GST494, Goods and Services Tax/Harmonized Sales Tax Final Return for Selected Listed Financial Institutions.
In 2011, both Plan 1 and 2 filed an annual information return (Form GST111) for their 2010 fiscal year. At the time, the plans filed Form GST111 on the basis that each plan:
* was a listed financial institution;
* was a GST/HST registrant during the fiscal year; and
* had income for the purposes of the Income Tax Act exceeding $1 million.
While both plans meet the first two criteria for filing the Form GST111, it is not clear to the plans whether the third criterion related to the income threshold is met.
INTERPRETATION REQUESTED
You would like to know whether Plan 1 and 2 are reporting institutions under subsection 273.2(2) and required to file Form GST111 for each fiscal year. More specifically, the plans would like to know what constitutes “income” for income tax purposes as described in paragraph 273.2(2)(c).
INTERPRETATION GIVEN
Under subsection 273.2(2), a person, other than a prescribed person or a person of a prescribed class, is a reporting institution throughout a fiscal year of the person if
(a) the person is a financial institution at any time in the fiscal year;
(b) the person is a registrant at any time in the fiscal year; and
(c) the total of all amounts each of which is an amount included in computing, for the purposes of the Income Tax Act, the person's income, or, if the person is an individual, the person's income from a business, for the last taxation year of the person that ends in the fiscal year, exceeds the amount determined by the formula
$1,000,000 × A/365
where
A is the number of days in the taxation year.
In accordance with section 6 of the Financial Services and Financial Institutions (GST/HST) Regulations, selected listed financial institutions that are either a segregated fund of an insurer or an investment plan, other than a trust governed by a registered retirement savings plan, a registered retirement income fund or a registered education savings plan, are prescribed for purposes of subsection 273.2(2).
As Plan 1 and Plan 2 are not selected listed financial institutions, they are not prescribed for purposes of subsection 273.2(2).
Based on the information provided, Plan 1 and 2 are investment plans under subsection 149(5) and listed financial institutions under paragraph 149(1)(a) as they are each a trust governed by a registered pension plan. Therefore, Plan 1 and 2 meet the criteria in paragraphs 273.2(2)(a) and (b).
In order to determine whether Plan 1 and 2 meet the criterion in paragraph 273.2(2)(c), you are requesting clarification [from the Income Tax Rulings Directorate] as to what amounts constitute income for purposes of the Income Tax Act. […].
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4394. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Gabrielle Nadeau
Listed Financial Institutions Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
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