The HST and pension plans
Canadian Indirect Tax News, December 19, 2011 (11-6)
Have you kept up with all of the requirements?
If you work with employee pension plans — either for the employer, trustee or administrator — you know how complex and difficult it is to apply the new harmonized sales tax (HST) regime for pension plans. Now may be the time to look again at whether you have covered all the bases, as some deadlines are looming. Here are a few things you should be thinking of:
- Does the pension trust need to be registered? If a pension trust has beneficiaries in an HST province and a non-HST province, it will likely be a selected listed financial institution (SLFI). The rules have changed for 2012, so if the deemed or actual federal portion of HST or goods and services tax of the pension plan is more than $10,000 (equivalent to $200,000 of expenses), it will be a SLFI. By registering, a SLFI will only have to file an annual return; whereas non-registrant SLFIs must file monthly. If not already registered, the pension trust may want to register, effective January 1, 2012.
- Has the pension trust’s 33% rebate been claimed? It must be claimed within two years of the due date of the pension’s return.
- Has the employer reported a deemed supply for expenses paid on behalf of the pension plan in their year-end return? For employers with a calendar year-end, this is typically filed by January 31. It is time to start calculating the deemed supply and also to make sure all related input tax credits have been cleared.
- Have your pension trusts reported their “investor percentage” to all investee funds? Failure to comply could result in penalties, whether or not the investee fund manager has made a request for the information. (The report was due by November 15. We are aware that many plan sponsors did not meet that deadline).
A Deloitte indirect tax specialist can assist with providing relief for your pension HST headache.
This publication is produced by Deloitte & Touche LLP as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors. Your use of this document is at your own risk.