Prescribed Form for Joint Venture Elections

Please note that the following Policy Statement, although correct at the time of issue, may not have been updated to reflect any subsequent legislative changes.

GST/HST Policy Statement P-187

Date of Issue

October 16, 1997

Subject

Prescribed Form for Joint Venture Elections.

Legislative Reference(s)

Subsection 123(1) and section 273 of the Excise Tax Act.

National Coding System File Number(s)

11660-0 and 11660-2.

Effective Date

January 1, 1991.

Text

Issue and Decisions:

Subsection 273(4) of the Excise Tax Act, as amended by S.C. 1993, c. 27, s. 124(1) states that

"An election or revocation under this section made jointly by an operator and a co-venturer is not a valid election or revocation unless it is made in prescribed form containing prescribed information and specifies the effective date of the election or revocation."

Therefore, the participants in a qualifying joint venture must satisfy the following requirements in order to make a valid election under section 273:

(a) the election is made jointly by the operator and the co-venturer;

(b) the election specifies the effective date; and

(c) the election is in the prescribed form and contains prescribed information.

The first requirement will be satisfied by the operator and the co-venturer both signing the form, or authorizing another person to sign on their behalf.

The operator and co-venturer will satisfy the second requirement by identifying a date that the election became effective. The date specified cannot be earlier than the date that the parties formed a joint venture. The effective date of the election may, however, be earlier than the date on the formal joint venture agreement, provided the agreement was evidenced in writing on the effective date.

As a result of the requirement that an effective date be specified, the participants in the joint venture may complete the election form after the fact.

The Department has prepared forms GST 21 and GST 355 which contain the prescribed information for the purposes of subsection 273(4). Many co-venturers and operators will choose to use one of these forms for convenience. It is the Department's view, however, that parties may prepare their own document which will constitute a valid election as long as the document contains the prescribed information. The following is the prescribed information:

1. the operator's complete legal name,

2. the operator's registration number,

3. the operator's mailing address (including city & postal code).

4. the name, title and telephone number of a contact person for the operator,

5. the operator's language of preference,

6. the complete legal name of the other participants,

7. the registration numbers of the other participants, if any,

8. the mailing address (including city & postal code) of the other participants,

9. the name, title and telephone number of a contact person for the other participants,

10. the language preference of the other participants,

11. the name of the joint venture, if any,

12. a brief description of the joint venture activity,

13. a statement certifying that the joint venture operates according to an agreement evidenced in writing and that the joint venture is organized in a manner other than a partnership or corporation,

14. the effective date of the election,

15. a certification, signed by the operator, indicating that the information given in the form is true, correct and complete in every respect to the best of the operator's knowledge and that the person signing is authorized to sign on the operator's behalf,

16. the signature of the other participants, unless the operator is authorized in other supporting documentation, which is signed by the other participants, to sign the election form on their behalf, and

17. a statement which acknowledges that, by signing the form, the joint venture participants elect jointly to have the person identified as the operator account for the GST in respect of all properties and services that are supplied, acquired or imported by the operator on behalf of the co-venturer(s) in the course of activities of the joint venture while the election is in effect pursuant to paragraph 273(1)(a) of the Excise Tax Act.

Where, however, some of this information, other than the effective date, is missing, the Department will have to determine on a case-by-case basis whether the missing information affects the substance of the election. Where it does not, the election will be valid.

The election need not be filed with the Department. The operator and co-venturers must retain the election for verification purposes. The operator is responsible for retaining and maintaining the election(s) as it relates to all co-venturers over the life of the joint venture. Each co-venturer must retain and maintain the election(s) that reflects its own status at any point in time during its involvement with the joint venture.

The prescribed information may be included in the joint venture agreement or as an appendix thereto provided that it is set out in a manner which ensures that the co-venturers are aware of their obligations under section 273.

SAMPLE RULING

The policy statement on the prescribed form for the joint venture election is intended to enumerate those items which are required in order to make the election on a form other than the prescribed form (GST 21 or GST 355). Sample rulings are not considered appropriate. When a form other than the prescribed form is used, the information provided by the joint venture participants should be compared to the items enumerated in the policy.

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