Using agency structures can save GST

Utilizing an agency relationship may save GST or HST. For example:

1. Given that, with the exception of accident and sickness insurance, the supply of insurance is considered a financial service for GST purposes only in situations where the insurance is provided by an insurer, it generally will be preferable for a company to secure insurance for other group members as their agent - rather than acting as principal in acquiring the insurance and resupplying the benefits of the insurance coverage to the group companies.
2. A s. 150 election generally exempts intragroup leases or servicing agreements, which may result in loss of input tax credits. For example, if in this situation a bank is subleasing premises to subsidiary asset manager, it will be denied ITCs on its corresponding headlease payments to a 3^rd party landlord. However, if it instead headleases the premises as agent for the asset manager, the asset manager could generate ITCs for the GST on such rent.
3. In order to avoid GST on intercompany management fees, a group company may employ individuals as agent for multiple group companies, while using one payroll account.
4. If a mutual fund manager earned redemption fees directly from the mutual fund trust, such fees would be taxable. Instead, the redemption fee is structured as an obligation of the redeeming unitholder to the manager – but with the trust paying the redemption fee directly to the manager on behalf of the unitholder.
5. If a person providing out-sourced government services is doing so as agent for a public sector body, then an exemption is more likely to apply.

In addition, having the operator of a real estate joint venture appoint the bare trustee as its agent to enter into contracts to procure property and services at its direction (in order to avoid disclosing the identity of any of the participants including the operator) “has become fairly common.”

Neal Armstrong. Summary of Brent Murray, "Cost-Sharing, Agency & Resupply Agreements: the When and the Why", Canadian GST/HST Monitor (Wolters Kluwer), No. 329, February 2016, p.1 under General Concepts – Agency.