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: 133819
Dear [Client]:
Subject:
GST/HST INTERPRETATION
Questions concerning the pension entity rebate
Thank you for your [...] [enquiry] of [mm/dd/yyyy], and for your subsequent [...] correspondence concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the [...] [("Employer")] and to its pension entities.
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.
We understand the following based on the information that you have provided [...]:
1. The [...] [Employer] is registered for GST/HST, and is the sponsor of [...] pension plans;
2. The [...] plans (the "Plans") are: [...]
3. Each Plan is a registered pension plan for income tax purposes, and each Plan governs a trust. The Plan trusts are pension entities of the Plans for the purposes of the ETA;
4. The [Employer] is a participating employer of all of the Plans with the exception of [...] [Plan X]; and
5. The [Employer] is not the employer of [Plan X] members and is not a participating employer in respect of that Plan, but nevertheless makes actual supplies of certain goods and services to the [Plan X] trust.
Interpretation Requested
You would like to know the following:
1. Assuming that the [Employer] is not the employer of [Plan X] members, you would like us to confirm that section 172.1 of the ETA does not operate to deem the [Employer] to make any deemed supplies in respect of that Plan;
2. Who can sign the certification in Part F of Form RC 4607 on behalf of the [Employer] as a qualifying employer; and
3. Part F of Form RC 4607 requires a qualifying employer to provide a "Pension Plan Number". You have asked us to clarify the meaning of this term.
Interpretation Given
Based on the information provided, we can provide you with the following information in response to your questions.
1) Deemed supply rules apply to a participating employer
The deemed supply rules in subsections 172.1(5) through (7) of the ETA deem a person who is a registrant and a participating employer of a pension plan to have made taxable supplies of certain property and services under certain circumstances. Only a person who is both a registrant and a participating employer is subject to these rules. Subsections 172.1(5) through (7) do not apply to a person who is not a participating employer of a pension plan.
A "participating employer" is defined in subsection 172.1(1), and generally includes an employer that has made, or is required to make, contributions to the pension plan or payments thereunder in respect of the employer's employees or former employees. A participating employer also includes an employer prescribed under subsection 8308(7) of the Income Tax Regulations, which describes certain cases where an employee of one employer renders services to, and receives remuneration from, another employer. An employer that has made pension contributions to a pension plan in the past remains a participating employer even if it does not currently make contributions.
If the [Employer] is not a "participating employer" as defined in subsection 172.1(1) in relation to [Plan X], then the deemed supply rules in subsections 172.1(5) through (7) do not apply and the [Employer] will not be deemed to make any supplies to [Plan X] pursuant to those subsections. However, other provisions of the ETA, such as sections 165 and 221, would still apply to any actual supplies made by the [Employer] to [Plan X].
2) Certification of Form RC 4607
You have asked us to advise you as to who may sign the certification in Part F of Form RC 4607 on behalf of the [Employer] as a qualifying employer. An authorized individual of the [Employer] must make this certification. Generally, an authorized individual is someone who has the legal authority to sign documents on behalf of the person, including the owner of the business, a partner of a partnership, a director of a corporation, an officer of a non-profit organization, a trustee of an estate, or some other individual who is duly authorized. In the case of the [Employer] it would be such a duly authorized [...].
3) Pension Plan Number
You have noted that Part F of Form RC 4607 requires a qualifying employer to provide a "Pension Plan Number", and you have asked us to clarify the meaning of this term. The pension plan number that the [Employer] must provide is the registration number, assigned by the Minister for purposes of the Income Tax Act that relates to the pension entity with which the employer is electing to share the pension entity rebate.
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 613-957-8221. 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,
Kathryn Sigetich
Specialty Tax Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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