Builders and Electronic Filing Requirements

GST/HST Info Sheet GI-099
April 2013

Note: This version replaces the one dated August 2010.

Electronic filing methods

There are four electronic filing methods. Some builders may have to use one method because of their particular circumstances. The methods for electronically filing a GST/HST return are as follows:

• GST/HST NETFILE is an Internet-based filing service that allows registrants to file their GST/HST returns and eligible rebates directly with the CRA over the Internet. Registrants enter the required information on an on-line form and confirm that they want to file their return. Once the return has been electronically filed, registrants will immediately receive a confirmation number.
• GST/HST TELEFILE allows eligible registrants to file their GST/HST returns using their touch-tone telephone and a toll-free number.
• GST/HST Electronic Data Interchange (EDI) is a computer-to-computer exchange of information in a standard format. Eligible registrants can use EDI to file their GST/HST returns and remit their GST/HST payments electronically.
• GST/HST Internet File Transfer (GIFT) allows eligible registrants to utilize third-party CRA-approved accounting software to file their returns electronically.

GST/HST NETFILE and GST/HST TELEFILE are free to use. EDI and GIFT are offered by a third party and may have associated costs.

When is a builder required to file electronically?

The following sections describe the situation where a builder must use GST/HST NETFILE and other situations where a builder has a choice between certain filing methods. The appendix to this info sheet provides a decision tree to illustrate these situations; however, you should refer to the descriptions of each situation in the sections below.

The following information applies for any reporting period that ends on or after July 1, 2010. However, situation 1 only applies to builders in PEI for reporting periods that end on or after April 1, 2013. Builders who are required to file electronically for reporting periods ending on or after these dates may be subject to penalties if they file paper returns or do not report information as required.

Situation 1: Builder must use GST/HST NETFILE

A builder must use GST/HST NETFILE to file its return for a reporting period where the builder:

• is required to report the British Columbia (B.C.) transition tax (if an agent of the builder is required to report the B.C. transition tax, the agent must use GST/HST NETFILE to file its return for the reporting period); ^{Footnote 1}
• is deducting the amount of any B.C. transition rebates it is entitled to claim (if an agent of the builder is deducting the amount of any B.C. transition rebates the builder is entitled to claim, the agent must use GST/HST NETFILE for the reporting period); ^{Footnote 2}
• is required to recapture input tax credits (ITCs) for the provincial part of the HST paid or payable on certain taxable supplies acquired in Ontario, B.C. or P.E.I.;
• during the reporting period, makes a taxable sale of a grandparented housing unit ^{Footnote 3} in Ontario, B.C., Nova Scotia or P.E.I., where the purchaser is not entitled to claim a GST/HST new housing rebate or GST/HST new residential rental property rebate in respect of the GST or federal part of the HST payable on the grandparented sale;
• is a first reseller ^{Footnote 4} who, during the reporting period, made a taxable sale of a housing unit where the sale was subject to the HST at 13% in Ontario, 12% in B.C., 15% in Nova Scotia or 14% in P.E.I., and the first reseller purchased that housing unit on a grandparented basis;
• is required to account for the transitional tax adjustment in its net tax calculation for the reporting period; or
• is reporting a provincial transitional new housing rebate (either a rebate that the builder is entitled to claim or a rebate that is assigned to the builder by a purchaser who is entitled to claim the rebate) in its return for the reporting period.

Situation 2: Builder must use either GST/HST NETFILE or GST/HST TELEFILE

If situation 1 does not apply, a builder must use either GST/HST NETFILE or GST/HST TELEFILE to file its return for a reporting period where the builder:

• has a threshold amount greater than $1.5 million;
• pays or credits a GST/HST new housing rebate amount, including a provincial new housing rebate amount in respect of the provincial part of the HST where applicable, to a purchaser; and
• claims the rebate amount as a deduction in calculating its net tax for the reporting period.

Situation 3: Builder must use GST/HST NETFILE, GST/HST TELEFILE, EDI or GIFT

If situations 1 and 2 do not apply, a builder (other than a charity) must use one of the four electronic filing methods to file its return for a reporting period if the builder has a threshold amount greater than $1.5 million.

Situation 4: Builder may choose to file electronically or use a paper return

A builder may use GST/HST NETFILE, GST/HST TELEFILE, GIFT, EDI or a paper return to file its return for a reporting period if situations 1, 2 and 3 do not apply.

Information schedule with builder's GST/HST NETFILE return

For reporting periods ending on or after July 1, 2010, or in the case of P.E.I., on or after April 1, 2013, builders to whom situation 1 applies are required to report the following information on their GST/HST NETFILE return:

• the amount of the B.C. transition tax that became collectible in the reporting period;
• if the builder (or builder's agent) is claiming the amount of any B.C. transition rebates the builder is entitled to claim on that return, the total amount of such rebates;
• the number of grandparented housing units sold in Ontario, B.C., Nova Scotia or P.E.I. during the reporting period where the purchaser was not entitled to claim a GST/HST new housing rebate or a GST/HST new residential rental property rebate, and the total of the sale prices of those units (in the case of a grandparented sale of a condominium complex in Ontario, B.C. or P.E.I, the sale counts as one grandparented housing unit);
• where the builder is a first reseller, the number of newly constructed or substantially renovated housing units sold during the reporting period that are subject to HST at 13% in Ontario, 12% in B.C., 15% in Nova Scotia or 14% in P.E.I., where those units were previously purchased by the first reseller on a grandparented basis, and the total of the purchase prices paid by the first reseller for those units;
• the transitional tax adjustment that is required to be included in the builder's net tax calculation for the reporting period; and
• the amount of all provincial transitional new housing rebates (including those assigned to the builder by a purchaser) that the builder is reporting in its GST/HST return.

This information is reported in separate information fields on Schedule A, Builders – Transitional Information on the GST/HST NETFILE return. However, if a builder does not have any provincial transitional new housing rebates that were assigned to the builder by purchasers and is only reporting provincial transitional new housing rebates that the builder is entitled to claim and no other transitional information as described above, the builder is not required to complete Schedule A and may report these rebates on line 111 of the GST/HST NETFILE return.

Information field for GST/HST new housing rebate amounts paid or credited by a builder

Currently, a builder is required to submit a purchaser's GST/HST new housing rebate application (Form GST190) when the builder pays or credits the rebate amount to the purchaser. In this case, the builder can claim the rebate amount as a deduction from its GST/HST liability in the return for the reporting period during which the amount was paid or credited to the purchaser. This requirement does not change. Builders continue to include this rebate amount on line 108, "Total ITCs and adjustments", on their GST/HST return.

However, in addition to including the rebate amount on line 108, builders whose threshold amounts are over $1.5 million (i.e., situation 2 applies) and builders who are required to use GST/HST NETFILE (i.e., situation 1 applies) are required to indicate in a separate information field, line 135, "GST/HST New Housing Rebates", the total amount of the GST/HST new housing rebates they have included on line 108, including any provincial new housing rebates in respect of the provincial part of the HST. These builders are required to file their return using GST/HST NETFILE or GST/HST TELEFILE, unless they meet situation 1 and are required to use GST/HST NETFILE. Builders who file their return using GST/HST TELEFILE must also submit the rebate applications separately, by mail, to the Summerside Tax Centre.

Builders who file their return using GST/HST NETFILE can choose to electronically file the new housing rebate applications with their return. Electronic filing is only available for rebate application types 1A and 1B. In this case, builders are not required to mail the rebate applications to CRA.

Line 135 has not been added to the paper return. This reporting requirement only applies to builders that file their returns using GST/HST NETFILE or GST/HST TELEFILE. The information on line 108, and not line 135, is used in the calculation of net tax.

Builders who pay or credit a provincial new housing rebate in respect of the provincial part of the HST must include this amount on line 135 with any GST/HST new housing rebate in respect of the federal part of the HST that the builder paid or credited to a purchaser. For information on provincial new housing rebates:

• for B.C., refer to GST/HST Info Sheet GI-080, Harmonized Sales Tax: British Columbia New Housing Rebate and GST/HST Info Sheet GI-128, Harmonized Sales Tax: Proposed Enhancements to the British Columbia New Housing Rebates; and
• for Ontario, refer to GST/HST Info Sheet GI-079, Harmonized Sales Tax: Ontario New Housing Rebate.

Reporting recaptured ITCs

Builders that are required to recapture ITCs (i.e., situation 1 applies) are required to report the following on their GST/HST NETFILE returns:

• the "gross" amount of ITCs and adjustments, i.e., all ITCs the builder is entitled to claim before taking into account any recaptured ITCs;
• the amount of the ITCs for the provincial part of the HST that is subject to recapture. This amount is automatically multiplied by the applicable recapture rate for the period. The builder is generally required to report these recaptured ITCs in the reporting period in which the HST became payable; and
• the net amount of ITCs (automatically calculated by deducting recaptured ITCs from gross ITCs) eligible to be claimed in the GST/HST NETFILE return.

This information must be reported in separate information fields on Schedule B, Calculation of Input Tax Credits on the GST/HST NETFILE return. Generally, if a registrant fails to report recaptured ITCs in the proper reporting period, this is to be corrected by sending the amended information in writing to their tax centre.

Schedules, forms and rebate applications

The schedules that capture the information relating to recaptured ITCs and HST transitional housing information are not available in paper form and must be filed using GST/HST NETFILE.

Other GST/HST documents, such as Form GST60, GST/HST Return for Acquisition of Real Property, cannot be filed electronically and must continue to be filed by mail. All rebate applications for rebate amounts that are included in the determination of a registrant's amount owing in a return filed electronically must be sent by mail, with the exceptions shown below, to the Summerside Tax Centre no later than the day the registrant files its return.

Builders who file their return using GST/HST NETFILE can electronically file GST/HST new housing rebate application types 1A and 1B (Form GST190) with their return.

GST/HST registrants who file their return using GST/HST NETFILE can electronically file the following rebate applications with their return:

• Form GST189, General Application for Rebate of GST/HST (for the Ontario First Nations point of sale relief amount); and
• Form GST284 or Form GST66, Application for GST/HST Public Service Bodies' Rebate and GST Self-government Refund (for a public service body rebate).

GST/HST payments

GST/HST registrants are not required to make payments electronically. However, the CRA encourages all registrants to make payments using its on-line service "My Payment" at www.cra.gc.ca/mypayment.

GST/HST registrants may also pay electronically through their financial institution's telephone banking, Internet banking or automated bank machines. More information is provided at www.cra.gc.ca/electronicpayments.

All technical publications related to GST/HST are available on the CRA Web site at www.cra.gc.ca/gsthsttech.

Appendix: Builder's electronic filing decision tree

The following chart shows which electronic filing method a builder must use.