Section 172.1 Information Requirements

GST/HST Notices - Notice 280
January 2013

This notice explains the information that must be provided to a pension entity by a participating employer that is deemed to have made a taxable supply under any of subsections 172.1(5), (6) or (7).

Background – deemed taxable supplies by the employer

Under subsection 172.1(5), a participating employer of a pension plan that is a GST/HST registrant is deemed to have made a taxable supply of a property or service (a "specified resource"), and to have collected tax on that supply where the employer acquires the specified resource for the purpose of supplying some or all of that property or service to a pension entity of the pension plan for consumption, use or supply in the course of pension activities in respect of the plan. Also, for the purposes of determining a rebate under section 261.01, claiming an input tax credit (ITC), and complying with the tax adjustment note (TAN) provisions in sections 232.01 and 232.02, the pension entity is deemed to have paid tax on the deemed taxable supply.

Similarly, under subsection 172.1(6), a participating employer of a pension plan that is a GST/HST registrant is deemed to have made a taxable supply, and to have collected tax on that supply, where the employer consumes or uses an employer resource for the purpose of making a supply of property or a service to a pension entity of the pension plan for consumption, use or supply in the course of pension activities in respect of the plan. Also, for the purposes of determining a rebate under section 261.01, claiming an ITC, and complying with the TAN provisions in sections 232.01 and 232.02, the pension entity is deemed to have paid tax on the deemed taxable supply.

Under subsection 172.1(7), a participating employer of a pension plan that is a GST/HST registrant is deemed to have made a taxable supply, and to have collected tax on that supply, where the employer consumes or uses an employer resource in the course of pension activities and the consumption or use is not for the purpose of making a supply of property or a service to a pension entity of the plan. Also, for the purposes of determining a rebate under section 261.01, the pension entity is deemed to have paid tax on the deemed taxable supply.

The specific rules applicable to each of these situations are described in detail in Part IV of GST/HST Notice257.

If any of the deeming rules of subsections 172.1(5) to (7) apply to a particular employer, subsection 172.1(8) requires the employer to provide prescribed information, in prescribed form and manner, to the particular pension entity that is deemed to have paid tax under these rules.

Information required for deemed supplies made under subsection 172.1(5)

Deemed tax paid by the pension entity

Subsection 172.1(5) deems the pension entity to have received a supply of a specified resource on the last day of the fiscal year of the employer for the purposes of

• claiming an ITC;
• claiming a rebate under section 261.01; and
• complying with the TAN provisions in sections 232.01 and 232.02.

Also, the pension entity is deemed, for the above purposes, to have paid tax. If the pension entity is not entitled to claim an ITC, the tax deemed to have been paid would form part of the pension entity's calculation of its pension rebate amount for the purposes of section 261.01.

Where the pension entity is not a selected listed financial institution (SLFI), the amount of tax that the pension entity is deemed to have paid is equal to the amount of tax that the employer is deemed to have collected, which is the sum of the federal and provincial parts of the GST/HST. However, where the pension entity is an SLFI at the time it is deemed to have received the supply, it is only deemed to have paid tax equal to the amount of the federal part of the tax that the employer is deemed to have collected (for more information, see example 11 of Notice257).

A pension entity that is an SLFI is not deemed to have paid the provincial part of the tax deemed collected by the employer and therefore may not include this amount as an eligible amount when it calculates its rebate entitlement under section 261.01. Nevertheless, a pension entity that is an SLFI is required to know the amount of the provincial part of the tax. The pension entity requires this information in order to make the appropriate adjustments to its net tax calculation under the special attribution method (SAM). For more information on the SAM calculation, see section 9 of GST/HST Technical Information Bulletin B-107, Investment Plans (Including Segregated Funds of an Insurer) and the HST.

For purposes of subsection 172.1(8), an employer is required to provide the following information concerning a deemed supply of a specified resource made under subsection 172.1(5):

• the name of the employer and business number, if applicable;
• the name of the pension entity and corresponding pension plan number;
• the total federal part ^{Footnote 1} of the tax deemed collected by the employer in respect of deemed taxable supplies during the fiscal year;
• the total provincial part ^{Footnote 2} of the tax deemed collected by the employer in respect of deemed taxable supplies during the fiscal year; and
• a statement by the employer certifying that it included the tax deemed collected in its net tax for its reporting period that includes the last day of that fiscal year.

Although subsection 172.1(5) treats each specified resource or part as a separate deemed supply, it is not necessary for an employer to provide information in respect of each separate deemed supply. Instead, the employer may provide the tax totals specified above. However, where the actual supply of the specified resource or part was acquired by the pension entity for consumption, use or supply in the commercial activities of the pension entity, the employer must provide sufficient information to enable the pension entity to claim an ITC in respect of the deemed supply.

Information required for deemed supplies made under subsection 172.1(6)

A participating employer that is a registrant and that consumes or uses its own resources (employer resources, as defined in Part IV of Notice257) for the purpose of making what is commonly known as an "in-house" supply (a "pension supply") to the pension entity, is subject to a set of rules similar to those set out in subsection 172.1(5).

Deemed tax paid by the pension entity

Subsection 172.1(6) deems the pension entity to have received a supply of an employer resource on the last day of the fiscal year of the employer for the purposes of

• claiming an ITC;
• claiming a rebate under section 261.01; and
• complying with the TAN provisions in sections 232.01 and 232.02.

Also, the pension entity is deemed, for the above purposes, to have paid tax. If the pension entity is not entitled to claim an ITC, the tax deemed to have been paid would form part of the pension entity's calculation of its pension rebate amount for the purposes of section 261.01.

Where the pension entity is not an SLFI, the amount of tax that the pension entity is deemed to have paid is equal to the amount of tax that the employer is deemed to have collected, which is the sum of the federal and provincial parts of the GST/HST. However, where the pension entity is an SLFI at the time it is deemed to have received the supply, it is only deemed to have paid tax equal to the amount of the federal part of the tax that the employer is deemed to have collected.

An SLFI is not deemed to have paid the provincial part of the tax deemed collected by the employer and therefore may not include this amount as an eligible amount when it calculates its rebate entitlement under section 261.01. Nevertheless, a pension entity that is an SLFI is required to know the amount of the provincial part of the tax in order to make the appropriate adjustments to its net tax calculation under the SAM.

For purposes of subsection 172.1(8), an employer is required to provide the following information concerning a supply of an employer resource deemed to be made under subsection 172.1(6):

• the name of the employer and business number, if applicable;
• the name of the pension entity and corresponding pension plan number;
• the total federal part ^{Footnote 3} of the tax deemed collected by the employer in respect of deemed taxable supplies during the fiscal year;
• the total provincial part ^{Footnote 4} of the tax deemed collected by the employer in respect of deemed taxable supplies during the fiscal year; and
• a statement by the employer certifying that it included the tax deemed collected in its net tax for its reporting period that includes the last day of that fiscal year.

Although subsection 172.1(6) treats each employer resource or part as a separate deemed supply, it is not necessary for an employer to provide information in respect of each separate deemed supply. Instead, the employer may provide the tax totals specified above. However, where the employer consumes or uses the employer resource to make a pension supply (an actual supply) that was acquired by the pension entity for consumption, use or supply in the pension entity's commercial activities, the employer must provide sufficient information to enable the pension entity to claim an ITC in respect of the deemed supply.

Information required for deemed supplies made under subsection 172.1(7)

The deeming provisions of subsection 172.1(7) are similar to those set out in subsection 172.1(6). Subsection 172.1(7) applies where, at any time in the employer's fiscal year, an employer resource (other than an excluded resource) is consumed or used by the employer in pension activities but not for the purpose of making a supply to a pension entity. Subsection 172.1(7) deems a "specified pension entity" to have paid tax on the last day of the fiscal year of the employer. The tax deemed to have been paid would form part of the specified pension entity's calculation of its pension rebate amount for the purposes of section 261.01.

As in subsections 172.1(5) and (6), the provincial part of the deemed tax paid is only included in the rebate calculation if the specified pension entity is not an SLFI. An SLFI is not deemed to have paid the provincial part of the tax deemed collected by the employer and therefore may not include this amount as an eligible amount when it calculates its rebate entitlement under section 261.01. Nevertheless, a specified pension entity that is an SLFI is required to know the amount of the provincial part of the tax in order to make the appropriate adjustments to its net tax calculation under the SAM.

For purposes of subsection 172.1(8), an employer is required to provide the following information concerning a supply of an employer resource deemed to be made under subsection 172.1(7):

• the name of the employer and business number, if applicable;
• the name of the pension entity and corresponding pension plan number;
• the total federal part ^{Footnote 5} of the tax deemed collected by the employer in respect of deemed taxable supplies during the fiscal year;
• the total provincial part ^{Footnote 6} of the tax deemed collected by the employer in respect of deemed taxable supplies during the fiscal year; and
• a statement by the employer certifying that it included the tax deemed collected in its net tax for its reporting period that includes the last day of that fiscal year.

Enquiries by telephone

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