Section 128

Subsection 128(1) - Closely Related Corporation

See Also

9331-0688 Québec Inc. v. The King, 2023 TCC 173 (Informal Procedure)

Jorré J found that three corporations were ineligible to make the s. 156(2) nil consideration election because they were not “closely...

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Administrative Policy

5 July 2012 Interpretation Case No. 119159

Incorporated societies which had the same board members and, therefore, were controlled by the same group of persons did not qualify as closely...

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Paragraph 128(1)(a)

Administrative Policy

GST/HST Memorandum 14-7 Closely Related Corporations June 2023

S. 128(1) rule generally does not apply where shareholder is non-corporate

25. In general, subsections 128(1) and (2) do not apply where a person...

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26 February 2015 CBA Roundtable, Q. 20

Does the 90% test in s. 128(1)(a) only take into consideration shares that have “full voting rights under all circumstances” in both the...

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11 October 2017 Interpretation 181628

A parent corporation (Corporation A) wholly owns three subsidiaries (Corporations B, D, and G) that in turn wholly own qualifying subsidiaries...

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26 February 2015 CBA Roundtable, Q. 20

Does the 90% test in s. 128(1)(a) only take into consideration shares that have “full voting rights under all circumstances” in both the...

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Subparagraph 128(1)(a)(i)

Administrative Policy

18 November 2021 GST/HST Interpretation 232687 - Application of the election under section 150 of the Excise Tax Act to a closely related group

A credit union (“CU Inc.”) has a 20% ownership interest in a limited partnership fund (“FI Fund LP”), with the balance held by other...

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Subsection 128(1.1)

Administrative Policy

GST/HST Memorandum 14-7 Closely Related Corporations June 2023

Recap of s. 128(1.1)

29. In other words, in order for a person (or a group of persons) to be considered to hold qualifying voting control of a...

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Paragraph 128(1.1)(a)

Subparagraph 128(1.1)(a)(i)

Administrative Policy

GST/HST Notice No. 303 - Changes to the Closely-related Test

Exception for special voting matters provided by statute, or where a statute provides a special class vote

Thus, in order for a person (or group...

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Clause 128.1(1.1)(a)(i)(B)

Administrative Policy

GST/HST Memorandum 14-7 Closely Related Corporations June 2023

Separate class vote accorded by CBCA not taken into account

31. [C]ertain matters listed in subsection 176(1) of the Canada Business Corporations...

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Subsection 128(2)

Administrative Policy

GST/HST Memorandum 14-7 Closely Related Corporations June 2023

Example 10

  • A and B (a qualifying subsidiary of A) each hold 50% of the full voting rights and 50% of the ownership for the shares of C, so that A...

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19 June 2015 Interpretation 167422

Holdco, a non-resident corporation, holds two stacks of wholly-owned Canadian and US corporations: US 2 holding US4, holding C 1, holding C 3; and...

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Subsection 128(4)

Administrative Policy

GST/HST Memorandum 14-7 Closely Related Corporations June 2023

Example 4

  • A and B each owns 50% of the shares of C, which wholly-owns D, but all of the voting rights attached to the shares of D are held by...

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7 October 2020 APFF Roundtable Q. 14, 2020-0852261C6 F - Section 128 E.T.A.

In 18 March 2019 Interpretation 186839, all the shareholders of a corporation (the “Corporation”) entered into a unanimous shareholders...

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18 March 2019 GST/HST Interpretation 186839 - Personnes morales étroitement liées

The Shareholders (who are not closely-related to each other) of the Corporation have entered into a unanimous shareholders agreement with the...

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