GST/HST Joint Venture Reporting By Bare Trustees And Nominee Corporations

Participants in joint ventures, particularly those in the commercial real estate sector, who frequently elect bare trustees or nominee corporations to report GST/HST on their behalf, should be aware of a recent announcement by the Canada Revenue Agency (CRA) in GST/HST Notice No. 284 - Bare Trusts, Nominee Corporations and Joint Ventures. For reporting periods ending after 2014, the tax authorities will no longer tolerate the use of bare trustees or nominee corporations that do not have sufficient managerial or operational control of the joint venture. The administrative tolerance available for the remainder of 2014 is contingent upon a joint venture's full compliance with current GST/HST obligations, and the understanding that joint ventures will restructure, where necessary, to ensure that, beginning January 1, 2015, any elected operator is recognized as an actual "participant " in a joint venture.