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ARTICLE · 01 DECEMBER 2014

GST/HST Closely Related Election Amendments – Tips & Traps

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To streamline their GST/HST compliance and improve their GST/HST cash flow, two "closely related" GST/HST registrants can relieve GST/HST on taxable transactions between them by entering into a joint election ..

CanadaTax
Jamie Wilks
Jamie Wilks
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Nature of the Election

To streamline their GST/HST compliance and improve their GST/HST cash flow, two "closely related" GST/HST registrants can relieve GST/HST on taxable transactions between them by entering into a joint election (the "Election") pursuant to subsection 156(2) of the Excise Tax Act (the "ETA"). In addition to the benefits of the Election for ongoing transactions, the Election can be useful to improve cash flow in the context of reorganizations or "one-off" transactions with significant dollar values.

The Election is generally available between two parties that are:1

(a) GST/HST registrants,

(b) engaged exclusively in taxable commercial activities,

(c) corporations resident in Canada or "Canadian partnerships"2 or a combination of each, and

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