Foreign or domestic businesses that must file a digital services tax (DST) return may make a designated entity election for a given year.

A designated entity election allows you to designate another entity in your consolidated group to act on your behalf for the year. The election is jointly made by you and the designated entity. Several members of your consolidated group can elect the same entity on the same election.

Who can make the election

Only an entity that has applied to register for a DST program account can be designated. Registration is possible even if the entity does not meet all the registration thresholds.

If the entity you intend to designate is not registered for a DST program account, it must apply to register by the time of the election.

For more information, refer to: Registering for an account

Who cannot make the election

Businesses that are part of more than one consolidated group in a calendar year cannot make the election for that year.

What are the effects of the election

After the election has been made for the calendar year, the designated entity will:

• Perform actions that will be deemed to be performed by you, such as filing your DST return and paying any amounts owed
• Receive the same communications that you will receive in respect of the year
• Receive confidential information about you, such as any DST balance you may have from a prior year

If you have concerns that information related to the DST from a prior year might be communicated to the designated entity, do not make the election.

When to make the election

To be valid for a calendar year, the election must be made by June 30 of the following year.

How to make the election

There is no prescribed form for the election.

Do not send the election to the Canada Revenue Agency (CRA). You must keep the election as the CRA may ask to see it.

When you make the election, include the following mandatory information:

General information

• Name of the ultimate parent entity of your consolidated group
• Tax identification number (TIN), if known, of the ultimate parent entity What is a TIN
  • In Canada: a social insurance number, a business number, or an account number issued to a trust
  • Outside of Canada: a unique number used to identify an individual or entity for tax purposes

  For more information on the use of TINs outside of Canada, refer to the Organisation for Economic Co-operation and Development (OECD)’s web page: Tax Identification Numbers

• Calendar year to which the election applies
• Statement which acknowledges that the signatories jointly elect to designate the designated entity in respect of the calendar year pursuant to subsection 46(1) of the Digital Services Tax Act

Information about the designated entity

• Business name
• Business number with DST program account (XXXXX XXXX DTXXXX)
• Name, position or office, telephone number and extension, and email address of the authorized officer
• Date and a wet or electronic signature of the authorized officer

Information about the group member(s) making the election

• Business name
• Business number with DST program account (XXXXX XXXX DTXXXX)
• Name, position or office, telephone number and extension, and email address of the authorized officer
• Date and a wet or electronic signature of the authorized officer

Keeping records

You must keep all records necessary to validate your election and determine whether you have complied with the Digital Services Tax Act for at least eight years from the end of the calendar year to which they relate.