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.
DATE December 20, 2011
TO [Client]
FROM Kathryn Sigetich
Rulings Officer
Specialty Tax Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
FILE 133520
SUBJECT:
GST/HST INTERPRETATION
Single-asset receivers and paragraphs 266(2)(g) and (h)
This memorandum is in response to your [...] [enquiry] dated March 7, 2011 in which you request our views on the manner in which paragraphs 266(2)(g) and 266(2)(h) of the Excise Tax Act (ETA) apply to receivers who manage only one or a few assets of a person's business (referred to in this memorandum as "single asset receivers") as opposed to managing a person's entire business.
Question:
How should paragraphs 266(2)(g) and 266(2)(h) be applied when dealing with receivers who are managing the business of the person versus those instances where the receiver is only managing one or a few of the assets? That is, would we expect one asset receivers to only file a return as it relates to the assets they are managing (as suggested in paragraph 266(2)(f)) or would we expect that they would have to file any return which the person hasn't filed for the period involved (on or before the particular day) and the period immediately before the fiscal year that included the particular day?
Comments:
It is our view that paragraphs 266(2)(g) and (h) require a receiver that manages one or a few, but not all, of an insolvent's properties, businesses, affairs or assets (a "single asset receiver") to file outstanding returns on behalf of an insolvent only in respect of the "relevant assets" of that receiver.
Paragraph 266(2)(g) generally imposes a requirement that the receiver must file outstanding returns for certain reporting periods that fall prior to the receiver's appointment date. Such an outstanding return, "that relates to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person during the reporting period", must be filed by the receiver unless the Minister waives this requirement.
Paragraph 266(2)(h) generally requires the receiver to file outstanding returns for in respect of certain supplies of real property. It is phrased in a similar manner to paragraph (g) and states that the receiver must file outstanding returns for certain reporting periods that fall prior to the receiver's appointment date "that can reasonably be considered to relate to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person during that reporting period". Again, the Minister may waive this requirement.
The term "relevant assets" is defined as follows in subsection 266(1):
"relevant assets" of a person means
(a) where the receiver's authority relates to all the properties, businesses, affairs or assets of a person, all those properties, businesses, affairs and assets, and
(b) where the receiver's authority relates to only part of the properties, businesses, affairs or assets of a person, that part of the properties, businesses, affairs or assets, as the case may be;
Thus, both paragraphs (g) and (h) of subsection 266(2) require a receiver to file outstanding returns for reporting periods which occurred prior to the receiver's appointment, but only insofar as the outstanding returns "relate" (in the case of paragraph (g)) or "can reasonably be considered to relate" (in the case of paragraph (h)) to the receiver's relevant assets, as though the receiver had been acting as receiver of the insolvent during the reporting period of the insolvent for which the return was not filed.
As discussed in the Excise and GST/HST Rulings memorandum issued [...] on [mm/dd/yyyy] (RITS [...]), where a receiver (such as a single asset receiver) is responsible for only a part and not all of the person's businesses, properties, affairs or assets, the receiver may use a sub-account of the person's GST/HST registration account for GST/HST purposes.
Should you have any questions concerning the foregoing please do not hesitate to contact me at 613-957-8221.
UNCLASSIFIED
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