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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 130205
Business Number: [...]
October 21, 2011
Dear [Client]:
Subject:
GST/HST RULING
Deemed supply by employer to pension entity
Thank you for your letter of November 10, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to expenses relating to a pension plan.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. 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.
Statement of Facts
Based on your submissions we understand the following:
[...] ([the Society]) is a registered charity within the meaning of subsection 248(1) of the Income Tax Act. [The Society] provides day program support services that enable individuals with disabilities to become active members of their own community.
[The Society's] services are exempt as determined in a GST/HST ruling issued [mm/dd/yyyy].
As a non registrant, [the Society's] claims a rebate of the non creditable tax paid with respect to goods and services acquired in the course of providing its exempt activities.
As of [mm/dd/yyyy], in order to provide retirement benefits to its employees, [the Society] has been contributing to the [...] (the "Plan"), a statutory pension plan of [...] [Participating Province X] established under the [...] Act.
Ruling Requested
You would like to know if [the Society] is subject to the deeming rules applicable to pension supplies deemed to be made by an employer to a pension entity pursuant to section 172.1.
Ruling Given
Based on the facts set out above, we rule that as a non registrant employer of the Plan, [the Society] is not subject to the deeming rules under section 172.1.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
Under section 172.1, an employer that is a GST/HST registrant and a participating employer of a pension plan may be deemed to have made a taxable supply where, at any time in a fiscal year of the employer, the employer:
• acquires a particular property or a service (a specified resource that is not excluded resource) for the purpose of re-supplying some or all of that property or service to a pension entity for consumption, use or supply in the course of pension activities of the pension plan;
• consumes or uses an employer resource that is not an excluded resource for the purpose of making a supply of property or a service to a pension entity for consumption, use or supply in the course of pension activities in respect of the pension plan; and
• consumes or uses an employer resource that is not an excluded resource in the course of pension activities and the consumption or use is not for the purpose of making a supply of property or a service to the relevant pension entity.
Based on the above, as [the Society] is not a GST/HST registrant, [the Society] is not subject to these provisions.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-1512. 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,
Constantin Constant
Specialty Tax Unit
Financial Institution & Real Property Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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