Technical Information Bulletin B-083R – Financial Services under the HST 23 May 1997

General overview of old (pre-SLFI Reg. 48(10)) rule

Generally, a selected listed financial institution's interim net tax for a reporting period is calculated in the same way as its actual net tax for the period. In calculating the adjustment to net tax relating to the provincial component of the HST payable on its purchases, the selected listed financial institution uses an allocation percentage for each participating province equal to the lesser of its allocation percentage for the current taxation year and its allocation percentage for the immediately preceding taxation year.

Where the interim net tax for the reporting period is a positive amount, the selected listed financial institution must pay that amount on account of its net tax for the period. Where the interim net tax is negative, the selected listed financial institution may claim an interim net tax refund.

Example: A selected listed financial institution that is a monthly filer with a year=end of December 31 calculates its net tax for the month of January 1998. The provincial allocation percentage for January 1998 is equal to the lesser of the selected listed financial institution's percentage for the participating province for the 1997 year and its estimate for the 1998 taxation year. If the interim net tax is a positive amount, the financial institution must pay that amount on or before February 28, 1998. This amount is treated as an amount paid on account of net tax.

Reconciliation in annual return to amounts paid in monthly (or quarterly) interim returns

Final return (ss 228(2.3))

At the end of each reporting period, the selected listed financial institution must reconcile the interim net tax reported with its actual net tax. The return to reconcile the actual and interim amounts will include the institution's net tax liability for each reporting period, the amount of any interim net tax payments and any amount claimed as an interim net tax refund. This final return, form GST 494, Goods and Services Tax/Harmonized Sales Tax Final Return for Selected Listed Financial Institutions, must be filed within three months after the institution's fiscal year-end.

Where the final net tax exceeds the interim net tax payments for the period, the excess must be remitted by the due date of the final return. Further, where the selected listed financial institution claimed an interim net tax refund that exceeds the final net tax refund to which it is entitled for the period, the excess must be repaid to the Receiver General on or before the due date of the final return. A refund may be claimed where the interim net tax payments exceed the final net tax calculated for the period.