Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
XXXXX
Case Number: 107933
January 16, 2009
Dear XXXXX
Subject:
GST/HST INTERPRETATION
Eligibility for A Corporation to Claim an Input Tax Credit (ITC) on Pension Fees
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your client's pension plan arrangement.
HST applies at the rate of 13% in the participating provinces of Nova Scotia, New Brunswick and Newfoundland and Labrador. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand from your letter and from our conversation of XXXXX, that your client offers a pension plan to its employees with both employer and employee contributions to the plan. There are two types of plans, defined benefit and defined contribution. Also, in our phone call you stated that the trust involved in the plan is not a registrant and that the invoices received include all of the following services included in one amount on the invoice in some circumstances and sometimes the amounts are separated.
Monthly invoices are issued to the corporation and addressed only to the corporation by an actuarial consulting firm for pension administration, investment consulting, and actuarial and pension consulting services rendered in respect to the registered pension plan. The corporation instructs payment to the actuarial firm to be made through the pension plan funds.
Interpretation Requested
You would like to know if a corporation involved in commercial activity is eligible to claim an ITC on consulting services if they are invoiced directly and only to the corporation and where payment is made through the pension plan funds. Specifically you are asking about pension administration, investment consulting, and actuarial and pension consulting services.
Interpretation Given
The CRA has published listings of "employer expenses" and "plan trust expenses" as outlined in GST/HST Technical Information Bulletin B-032R. This document outlines our administrative position on registered pension plans. (copy attached).
A final issue must be considered in your circumstance. As per our conversation it is sometimes the case that your client is invoiced one monthly amount which includes a number of different services that may include employer and trust expenses. To decide if there are any employer expenses included in this amount you will have to consider the GST/HST Policy Statement P-077R2 Single and Multiple Supplies. Invoices which include some element of employer expenses may not be classifiable as employer expenses if there is a single supply and the overriding element is classified as a trust expense. To understand whether or not there are single or multiple supplies and what the supply should be classified as, if there is a single supply, an analysis using the policy statement P-077R2 (copy attached) should be undertaken.
Lastly, the TIB's application is limited to single employer plans and does not apply to multiple employer or related employer plans. Although we discussed that your client is likely a single employer plan this should be confirmed.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613 952 9220. 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,
Lawrence Springstead
Specialty Tax Unit
Financial Institutions and Real Property Unit Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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