ARTICLE · 17 DECEMBER 2014

Changes To Related Party Election (Section 156 – Excise Tax Act)

Stewart McKelvey

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Section 156 provides an election that relieves certain related parties from having to collect Harmonized Sales Tax on the goods and services sold between them.

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Stewart McKelvey

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Section 156 of the Excise Tax Act (the "ETA") provides an election that relieves certain related parties from having to collect Harmonized Sales Tax ("HST") on the goods and services sold between them. The election deems qualifying supplies of goods and services to be made for nil consideration which means that there is no HST to be collected on such supplies.

General Requirements

The election applies to "qualifying members" of a closely related group. Qualifying members refers to a corporation resident in Canada or a partnership each member of which is a corporation or a partnership resident in Canada. Please note that a qualifying member does not include an individual. In addition, each member must meet the following requirements:

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