GST/HST Information for Selected Listed Financial Institutions

RC4050(E) Rev. 11

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Table of contents

Is this guide for you?

This guide explains the GST and the HST reporting information requirements for a selected listed financial institution. See the definition of a selected listed financial institution.

This guide contains specific line by line instructions to help you complete Form GST494, Goods and Services Tax/ Harmonized Sales Tax Final Return for Selected Listed Financial Institutions. It also has instructions for completing the interim return, Form GST34, Goods and Services Tax/ Harmonized Sales Tax (GST/HST) Return for Registrants or Form GST62, Goods and Services Tax/Harmonized Sales Tax Return (Non-personalized).

This guide is based on the Excise Tax Act (ETA), the proposed amendments to the ETA released on January 28, 2011, and the proposed Draft Regulations Amending Various GST/HST Regulations released on January 28, 2011, which include the draft Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations, and proposed changes announced in the Backgrounders issued by the Department of Finance on May 19, June 30, 2010 and January 28, 2011.

GST/HST and Quebec

In Quebec, Revenu Québec generally administers the GST/HST. If the physical location of your business is in Quebec, you have to file your returns and make your remittances with Revenu Québec using its forms. For more information, see the Revenu Québec publication IN 203 V, General Information Concerning the QST and the GST/HST, available at Revenu Québec or call 1-800-567-4692.

However, Form GST494, Goods and Services Tax/ Harmonized Sales Tax Final Return for Selected Listed Financial Institutions is being administered by the Canada Revenue Agency (see Filing instructions). Continue to use the usual remittance forms for any required payments resulting from filing Form GST494. For more information about Form GST494, call 1-800-959-5525 unless you are located in Quebec. If you are located in Quebec, call 1-877-567-4692.

La version française de cette publication et intitulée Renseignements sur la TPS/TVH à l'intention des institutions financières désignées particulières.

What's new?

We list the major changes below. This guide contains information based on proposed amendments to the Excise Tax Act and Regulations. At the time of publication, these proposed amendments were not law. The publication of this guide should not be taken as a statement by the Canada Revenue Agency that such amendments will in fact become law in their current form. If they become law as proposed, they will be effective as of the dates indicated. For more information on these and other changes, see the areas outlined in colour in this guide.

Harmonized sales tax for Ontario

As of July 1, 2010, Ontario harmonized its retail sales tax with the GST to implement the harmonized sales tax at the rate of 13% (5% federal part and 8% provincial part).

Harmonized sales tax for British Columbia

As of July 1, 2010, British Columbia harmonized its provincial sales tax with the GST to implement the harmonized sales tax at the rate of 12% (5% federal part and 7% provincial part).

Rate change for Nova Scotia

As of July 1, 2010, Nova Scotia increased its harmonized sales tax rate to 15% (5% federal part and 10% provincial part).

Place of supply rules

The place of supply rules have changed. For more information, see Guide RC4022, General Information for GST/HST Registrants.

Financial institutions - information return

Generally, a financial institution that is a GST/HST registrant and that has total annual income in excess of $1 million is required to file Form GST111, Financial Institution GST/HST Annual Information Return, for fiscal years beginning after 2007.

The Department of Finance announced on January 28, 2011 in the Backgrounder Modifications to the Proposed Financial Institution (FI) Rules for the Harmonized Sales Tax that it is proposed to exempt segregated funds of an insurer and investment plans, other than a trust governed by a registered retirement savings plan, a registered retirement income fund or a registered education savings plan, from the requirement to file Form GST111 when they are selected listed financial institutions.

Financial institutions - import rules

The import rules for financial institutions have changed. For more information, call 1-800-959-5525.

My Business Account

You can now use the Instalment payment calculator service to calculate your instalment payments and view their related due dates.

To learn more about the growing list of services available in My Business Account, go to My Business Account.

Definitions

Defined benefits pension plan - means the part of a pension plan that is in respect of benefits under the plan that are determined in accordance with a formula set forth in the plan, provided that the employer contributions under part of the pension plan are not so determined.

Defined contribution pension plan - means the part of a pension plan that is not a defined benefits pension plan.

Distributed investment plan - means an investment plan that is a mutual fund trust, a mutual fund corporation, a unit trust, a mortgage investment corporation, an investment corporation, a non-resident-owned investment corporation or a segregated fund of an insurer.

Manager of an investment plan - means:

  1. in the case of a pension entity of a pension plan, the administrator as defined in subsection 147.1(1) of the Income Tax Act (ITA) of the pension plan;
  2. in any other case, the person that has ultimate responsibility for the management and administration of the assets and liabilities of the investment plan.

Non-participating province - means a province, territory or any other area in Canada that is outside the participating provinces.

Non-stratified investment plan - means a distributed investment plan the units of which are not issued in two or more series.

Participating province - means the province of British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, or Ontario, but does not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities, as defined in subsection 123(1) of the ETA, are carried on in that area.

Pension entity of a pension plan - means a person in respect of the pension plan that is:

  1. person referred to in paragraph (a) of the definition "pension plan";
  2. corporation referred to in paragraph (b) of the definition "pension plan"; or
  3. prescribed person.

Pension plan - means a registered pension plan (as defined in subsection 248(1) of the ITA):

  1. that governs a person that is a trust or that is deemed to be a trust for the purposes of the ITA;
  2. in respect of which a corporation is:
    1. incorporated and operated either:
      1. solely for the administration of the registered pension plan, or
      2. for the administration of the registered pension plan and for no other purpose other than acting as trustee of, or administering, a trust governed by a retirement compensation arrangement (as defined in subsection 248(1) of the ITA), where the terms of the arrangement provide for benefits only in respect of individuals who are provided with benefits under the registered pension plan; and
    2. accepted by the Minister, under subparagraph 149(1)(o.1) of the ITA, as a funding medium for the purpose of the registration of the registered pension plan; or
  3. in respect of which a person is prescribed for the purposes of the definition pension entity.

Plan member of an investment plan that is a private investment plan or a pension entity of a pension plan - means an individual who has a right, either immediate or in the future and either absolute or contingent, to receive benefits under:

  1. if the investment plan is an employee life and health trust, the investment plan;
  2. if the investment plan is a pension entity of a pension plan, the pension plan; and
  3. in any other case, the deferred profit sharing plan, the employee benefit plan, the employee trust, the employees profit sharing plan, the registered supplementary unemployment benefit plan or the retirement compensation arrangement, as the case may be, that governs the investment plan.

Private investment plan - means an investment plan that is an employee life and health trust or a trust governed by a deferred profit sharing plan, an employee benefit plan, an employee trust, an employees profit sharing plan, a registered supplementary unemployment benefit plan or a retirement compensation arrangement.

Series - means, in the case of a trust, a class of units of the trust and in the case of a corporation, a class of the capital stock of the corporation. Stratified investment plan - means a distributed investment plan, the units of which are issued in two or more series.

Unit - means:

  1. in the case of a trust, a unit of the trust;
  2. in the case of a series of a trust, a unit of the trust of that series;
  3. in the case of a corporation, a share of the capital stock of the corporation;
  4. in the case of a series of a corporation, a share of the capital stock of the corporation of that series; and
  5. in the case of a segregated fund of an insurer, an interest of a person, other than the insurer, in the segregated fund.

An overview

If you are a supplier of financial services (such as a selected listed financial institution (SLFI)), you cannot claim input tax credits (ITCs) for the GST/HST paid or payable on goods or services bought for use in providing exempt financial services.

As an SLFI, when you calculate and report your net tax, you are required to make an adjustment to your net tax calculation by using a formula referred to as the special attribution method (SAM).

You must use this method to calculate your tax liability for the provincial part of the HST for the participating provinces. You have to make this net tax adjustment for each reporting period in which you are an SLFI.

A listed financial institution

For GST/HST purposes, you are a listed financial institution if you are included in any one of the categories listed in subparagraphs 149(1)(a)(i) through (xi) of the Excise Tax Act (ETA).

For example, a listed financial institution includes a person that is a bank, an investment dealer, a trust company, an insurance company, a credit union, an investment plan, a tax discounter, or a person whose principal business is lending money.

See GST/HST Memoranda 17.6, Definition of "Listed Financial Institution". for more information on listed financial institutions.

A selected listed financial institution

For GST/HST purposes, you would be considered to be an SLFI throughout a reporting period in a fiscal year that ends in your taxation year if you satisfy the following two conditions:

  • you are a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) of the ETA at any time during your taxation year; and
  • you are a prescribed financial institution.

Note

A person who is a listed financial institution under subparagraph 149(1)(a)(xi) of the ETA because of an election under section 150 of the ETA, is not an SLFI.

A prescribed financial institution

A financial institution would be a prescribed financial institution throughout a reporting period in a particular fiscal year:

  1. if the financial institution:
    1. has, at any time in the taxation year, a permanent establishment in a participating province and has, at any time in the taxation year, a permanent establishment in any other province; or
    2. is a qualifying partnership during the taxation year; and;
  2. if the financial institution is a qualifying small investment plan for the particular fiscal year and:
    1. the financial institution:
      1. was an SLFI throughout either one of the two fiscal years of the financial institution preceding the particular fiscal year;
      2. was not a qualifying small investment plan for either one of the two fiscal years of the financial institution preceding the particular fiscal year; and
      3. was not an SLFI throughout the third fiscal year of the financial institution preceding the particular fiscal year; or
    2. the financial institution has made an election to be an SLFI (Form RC4606, Election or Revocation for a Qualifying Small Investment Plan to be Treated as a Selected Listed Financial Institution).

Note

A qualifying small investment plan that meets the conditions in subparagraph (b)(i) above could apply to not be considered a prescribed financial institution (Form RC4612, Application to not be Considered a Selected Listed Financial Institution). The effect of this application if approved would be that the investment plan would not be considered to be an SLFI.

Permanent establishment

For the purpose of determining whether or not a person is an SLFI and for purposes of the draft Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations (draft SLFI Regulations), the term permanent establishment means the following:

  1. in the case of a corporation, means a permanent establishment as determined under subsection 400(2) of the Income Tax Regulations;
  2. in the case of an individual or trust, means a permanent establishment as determined under subsection 2600(2) of the Income Tax Regulations;
  3. in the case of a qualifying partnership all the members of which are individuals or trusts, means a permanent establishment that would be a permanent establishment of the qualifying partnership under subsection 2600(2) of the Income Tax Regulations if the qualifying partnership were an individual; and
  4. in the case of a qualifying partnership to which paragraph (c) does not apply, means a permanent establishment that would be a permanent establishment of the qualifying partnership under subsection 400(2) of the Income Tax Regulations if the qualifying partnership were a corporation.

In addition, a particular type of financial institution would also be deemed or considered to have a permanent establishment in a province under section 4 of the draft SLFI Regulations, as indicated below:

  1. if a financial institution is a bank, and at any time in a taxation year of the financial institution, the financial institution maintains a deposit or other similar account that is in the name of the person resident in a province or a loan that was made by the financial institution is outstanding and is either secured by land situated in a province or, if not secured by land, is owing by a person resident in a province the following rules apply:
    1. the financial institution is deemed to have a permanent establishment in the province throughout the taxation year; and
    2. the following loans made by the financial institution and deposit and other similar accounts maintained by the financial institution are deemed to be loans and deposits of the permanent establishment referred to in subparagraph (i) above and not of any other permanent establishment of the financial institution:
      1. outstanding loans secured by land situated in the province;
      2. outstanding loans, not secured by land, owing by persons resident in the province; and
      3. deposit and other similar accounts in the name of a person resident in the province;
  2. if a financial institution is an insurer that, at any time in a taxation year of the financial institution, is insuring a risk in respect of property, ordinarily situated in a province or in respect of a person resident in a province, the financial institution is deemed to have a permanent establishment in the province throughout the taxation year;
  3. if the financial institution is a trust and loan corporation, a trust corporation or a loan corporation and if, at any time in the taxation year of the financial institution, it conducts business (other than business in respect of loans) in a province or a loan that was made by the financial institution is outstanding and is either secured by land situated in a province or, if not secured by land, is owing by a person resident in a province, the financial institution is deemed to have a permanent establishment in the province throughout the taxation year;
  4. if a financial institution is a segregated fund of an insurer, the financial institution is deemed to have a permanent establishment in a province throughout a taxation year of the financial institution if, at any time in the taxation year:
    -   the insurer is qualified, under the laws of Canada or province, to sell units of the financial institution in the province; or
    -   a person resident in the province holds one or more units of the financial institution;
  5. if a financial institution is a distributed investment plan (other than a segregated fund of an insurer), the financial institution is deemed to have a permanent establishment in a province throughout a taxation year of the financial institution if, at any time in the taxation year:
    -   the financial institution is qualified under the laws of Canada or a province, to sell or distribute units of the financial institution in the province; or
    -   a person resident in the province holds one or more units of the financial institution; and
  6. if a financial institution is a private investment plan or a pension entity of a pension plan and, at any time in a taxation year of the financial institution, a plan member of the financial institution is resident in a province, the financial institution is deemed to have a permanent establishment in the province throughout the taxation year.

A financial institution would have a permanent establishment in a province throughout a taxation year of the financial institution if the financial institution would have a permanent establishment in the province at any time in that taxation year.

Province of residence of a person

For purpose of determining where a financial institution has a permanent establishment in a particular province it may be necessary to determine whether a particular person is resident in a particular province.

For this purpose and for purposes of the draft SLFI Regulations, a person resident in Canada is resident in the province:

  1. if the person is an individual, where the person's principal mailing address in Canada is located;
  2. if the person is a corporation or a partnership, where the person's principal business in Canada is located;
  3. if the person is a trust governed by a registered retirement savings plan (RRSP), a registered retirement income fund (RRIF), a registered education savings plan (RESP), a registered disability savings plan (RDSP), or a tax free savings account (TFSA), where the principal mailing address in Canada of the annuitant of the RRSP or RRIF of the subscriber of the RESP or the holder of the RDSP or the TFSA is located;
  4. if the person is a trust (other than a trust described in paragraph (c) above), where the trustee's principal business in Canada is located or, if the trustee is not carrying on a business, where the trustee's principal mailing address in Canada is located; and
  5. in any other case, where the person's principal business in Canada is located or if the person is not carrying on a business, where the person's principal mailing address in Canada is located.

Qualifying partnership

A partnership would be a qualifying partnership during a taxation year of the partnership if at any time in the taxation year, the partnership has:

  1. a member that has, at any time in the taxation year of the member in which the taxation year of the partnership ends, a permanent establishment in a participating province through which a business of the partnership is carried on or that is deemed under section 4 of the draft SLFI Regulations to be a permanent establishment of the member; and
  2. a member (including a member referred to in paragraph (a) above) that has, at any time in the taxation year of the member in which the taxation year of the partnership ends, a permanent establishment in any other province through which a business of the partnership is carried on or that is deemed under section 4 of the draft SLFI Regulations to be a permanent establishment of the member.

An investment plan

For purposes of the draft SLFI Regulations the term "investment plan" is defined to mean a person referred to in subparagraph 149(1)(vi) or (ix) of the ETA other than a trust governed by an RRSP, a RRIF or an RESP.

A segregated fund of an insurer is a person referred to in subparagraph 149(1)(vi) of the ETA, and is defined to mean a specified group of properties that is held in respect of insurance policies all or part of the reserves for which vary in amount depending on the fair market value of the properties.

An investment plan, defined in subsection 149(5) of the ETA, is a person referred to in subparagraph 149(1)(ix) of the ETA and is defined to mean:

  1. a trust governed by:
    -   a registered pension plan (RPP),
    -   an employees profit sharing plan,
    -   a registered supplementary unemployment benefit plan,
    -   a registered retirement savings plan (RRSP),
    -   a deferred profit sharing plan (DPSP),
    -   a registered education savings plan (RESP),
    -   a registered retirement income fund (RRIF),
    -   an employee benefit plan,
    -   an employee trust,
    -   a mutual fund trust,
    -   a pooled fund trust,
    -   a unit trust, or
    -   a retirement compensation arrangement,
    as each of those terms is defined for the purposes of the Income Tax Act (ITA) or the Income Tax Regulations;
  2. an investment corporation, as that term is defined for the purposes of the ITA;
  3. a mortgage investment corporation, as that term is defined for the purposes of the ITA;
  4. a mutual fund corporation, as that term is defined for the purposes of the ITA;
  5. a non-resident owned investment corporation, as that term is defined for the purposes of the ITA;
  6. a corporation exempt from tax under the ITA by reason of paragraph 149(1)(o.1) or (o.2) of the ITA; and
  7. a prescribed person, or a person of a prescribed class, but only where the person would be a selected listed financial institution for a reporting period in a fiscal year that ends in a taxation year of the person if the person were a listed financial institution included in subparagraph 149(1)(a)(ix) of the ETA during the taxation year and the preceding taxation year of the person. An employee life and health trust is proposed to be a prescribed person.
Note

The use of the term "investment plan" in the remainder of this guide is based on the definition of this term in the draft SLFI Regulations.

A qualifying small investment plan

An investment plan (other than a distributed investment plan) would be a qualifying small investment plan for a particular fiscal year of the investment plan:

  1. if the fiscal year is the first fiscal year of the investment plan, the amount determined by the following formula for each reporting period of the investment plan included in the fiscal year is equal to or less than $10,000:

    A x (365/B)

    where

    1. is the unrecoverable tax amount for the reporting period; and
    2. is the number of days in the reporting period; and
  2. in any other case, the amount determined by the following formula is equal to or less than $10,000:

    A x (365/B)

    where

    1. is the total of all amounts, each of which is an unrecoverable tax amount for a reporting period of the investment plan included in the fiscal year of the investment plan that precedes the fiscal year (the preceding fiscal year); and
    2. is the number of days in the preceding fiscal year.

Unrecoverable tax amount

The term "unrecoverable tax amount" for a reporting period of an investment plan means the amount determined by the formula:

A - B

where

  1. is the total of all amounts, each of which is:
    1. an amount that would be included in the total for Element A of the SAM formula in subsection 225.2(2) of the ETA, read without reference to any adaptation made under Part 5, Investment Plans of the draft SLFI Regulations for the reporting period, if the person were an SLFI throughout the reporting period; or
    2. an amount of tax that the person is deemed to have paid under subparagraph 172.1(5)(d)(ii) or (6)(d)(ii) or paragraph 172.1(7)(d) of the ETA during the reporting period; and
  2. is the total of all amounts, each of which is an amount that would be included in the total for Element B of the SAM formula in subsection 225.2(2) of the ETA, read without reference to any adaptation made under Part 5, Investment Plans of the draft SLFI Regulations for the reporting period, if the person were an SLFI throughout the reporting period.
Note

In determining if an investment plan is a qualifying small investment plan for a particular fiscal year that begins on or before January 28, 2011, the amounts referred to in paragraph (b) of the description of A in the above formula (generally the GST that a pension entity is deemed to have paid on taxable supplies made by a participating employer of the pension plan) should not be included in the calculation.

Certain investment plans that are not selected listed financial institutions

A non-stratified investment plan would not be an SLFI in a reporting period in a fiscal year that ends in its taxation year where the following conditions are met throughout the fiscal year in respect of a particular province:

  1. under the laws of Canada or a province, units of the non-stratified investment plan can be sold or distributed in the particular province but cannot be sold or distributed in any other province;
  2. under the terms of the prospectus, registration statement or other similar document of the non-stratified investment plan, or under the laws of Canada or a province, the conditions for a person owning or acquiring units of the plan include:
    1. that the person be resident in the particular province when the units are acquired; and
    2. if the person ceases to be resident in the particular province on a particular day, that the units be sold, transferred or redeemed within a reasonable time after that day; and
  3. the non-stratified investment plan's provincial attribution percentage for the particular province and for the taxation year in which the preceding fiscal year ends, or the percentage that would be the non-stratified investment plan's provincial attribution percentage for the particular province and for that taxation year if the particular province were a participating province, is 90% or more.

A stratified investment plan would not be an SLFI in respect of a reporting period in its fiscal year if each series of the stratified investment plan is a provincial series for the fiscal year. A provincial series for a fiscal year of a stratified investment plan means a series of the stratified investment plan that meets the following conditions throughout the fiscal year in respect of a particular province:

  1. under the laws of Canada or a province, units of the series can be sold or distributed in the particular province but cannot be sold or distributed in any other province;
  2. under the terms of the prospectus, registration statement or other similar document, or under the laws of Canada or a province, the conditions for a person owning or acquiring units of the series include:
    1. that the person be resident in the particular province when the units are acquired; and
    2. if the person ceases to be resident in the particular province on a particular day, that the units be sold, transferred or redeemed within a reasonable time after that day; and
  3. the stratified investment plan's provincial attribution percentage for the series, for the particular province and for the taxation year in which the preceding fiscal year ends, or the percentage that would be the stratified investment plan's provincial attribution percentage for the series for the particular province and for that taxation year if the particular province were a participating province, is 90% or more.

A private investment plan or a pension entity of a pension plan would not be an SLFI in respect of a reporting period in a fiscal year that ends in its taxation year if:

  1. throughout the taxation year, less than 10% of the total number of plan members of the private investment plan or the pension plan are resident in the participating provinces; and
  2. throughout the preceding fiscal year:
    1. in the case of a pension entity of a defined benefits pension plan, the total value of the actuarial liabilities of the pension plan that are reasonably attributable to its plan members resident in the participating provinces is less than $100,000,000; and
    2. in any other case, the total value of the assets of the private investment plan or pension plan that are reasonably attributable to its plan members resident in the participating provinces is less than $100,000,000.

Also, an investment plan that is, or reasonably expects to be, a qualifying small investment plan, for a particular fiscal year and the next fiscal year, may apply to not be considered an SLFI for the particular fiscal year and the next fiscal year using Form RC4612, Application to Not be Considered a Selected Listed Financial Institution.

The special attribution method

The special attribution method (SAM) is used to make an adjustment, determined by a formula, to your net tax for the provincial part of the HST.

As a result, generally there is no requirement for you to:

  • track and allocate the extent of consumption or use of each property or service acquired in the participating provinces in order to claim ITCs related to the applicable provincial part of the HST (either 7%, 8%, or 10%, depending on the participating province); and
  • self-assess and account for tax on inputs acquired in a non-participating province for consumption, use, or supply in a participating province. Exceptions to this rule are found in subsection 218.1(2) and section 220.04 of the ETA.

Filing requirements

A selected listed financial institution has unique reporting and remitting requirements. The filing methods are different for quarterly and monthly filers than for annual filers. These methods are explained below.

Note

It is proposed that an SLFI investment plan's fiscal year for GST/HST purposes is a calendar year for any fiscal years that end after 2010.

If an SLFI investment plan has a non-calendar year as its fiscal year ending in 2010, it would be required to have two fiscal years during its transitional year. The second fiscal year is for the remainder of the transitional year ending on December 31, 2010. As a result, the SLFI investment plan may be required to file two GST494 returns depending on whether it was an SLFI in the first fiscal year ending in 2010.

Monthly and quarterly filing

If you are a monthly or quarterly filer, use Form GST34, Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return for Registrants, for each reporting period as your interim return, and make an interim net tax payment or claim an interim net tax refund for that period.

You have to file your interim GST34 return within one month after the end of your reporting period along with your payment, if any.

If you are not a GST/HST registrant, as a monthly filer use Form GST62, Goods and Services Tax/Harmonized Sales Tax (GST/HST Return (Non-personalized) for each calendar month as your interim return. You have to file your interim GST62 return within one month after the end of the month along with your payment, if any.

Note

An SLFI that is resident in Canada may voluntarily register for GST/HST regardless of whether the SLFI is engaged in commercial activities or making taxable supplies.

To reconcile the interim net tax with the actual net tax, you are also required to file final returns for each of your reporting periods by completing Form GST494, Goods and Services Tax/Harmonized Sales Tax Final Return for Selected Listed Financial Institutions, and either remit any additional amount owing or claim a refund of any excess amount previously remitted. You have to file your GST494 return within six months after your fiscal year end.

It is proposed that sections 246 and 247 be amended to allow listed financial institutions to revoke a previously made reporting period election to be a monthly or quarterly filer, effective on the first day of the fiscal year of the listed financial institution by filing a notice of revocation in prescribed form not later than the day on which the revocation is to become effective or any later day that the Minister may allow.

These proposed amendments to sections 246 and 247 would apply to fiscal years of a listed financial institution that end on or after July 1, 2010.

Annual filing

If you are an annual filer, you have to complete and file Form GST494, Goods and Services Tax/Harmonized Sales Tax Final Return for Selected Listed Financial Institutions. You have to file the GST494 return within six months after your fiscal year-end.

Note

Generally, any person registered for GST/HST purposes will automatically be sent a GST34 return for each reporting period. As an SLFI that is an annual filer, you are not required to file this system generated GST34 return.

As an annual filer completing a GST494 return, you may have to pay quarterly instalments each year. You will find more information on instalments in Instalments by annual filers.

Filing instructions

Beginning for reporting periods ending July 1, 2010 or later, all GST/HST registrants, including registrants whose account is administered by Revenu Québec, are now eligible to file their GST34 returns electronically. GST62 returns and final returns (Form GST494, Goods and Services Tax/Harmonized Sales Tax Final Return for Selected Listed Financial Institutions) filed by all SLFIs cannot be filed electronically.

To file the GST494 return, you must mail it to:

Canada Revenue Agency
Summerside Tax Centre
275 Pope Road
Summerside PE   C1N 6A2

For more information, including electronic filing options, go to Goods and services tax/harmonized sales tax (GST/HST) filing or see Guide RC4022, General Information for GST/HST Registrants.

If you are eligible to file your GST34 return electronically you will receive Form RC158, GST/HST Netfile/Telefile Remittance Voucher, with your GST/HST return for registrants. Use this voucher to pay the balance calculated when you complete your GST/HST return.

You can also make a remittance at any participating financial institution in Canada unless you are offsetting an amount owing by a rebate or refund. See Line 111- Rebates for information on the available rebates.

If your remittance is $50,000 or more, you have to make the remittance at a financial institution in Canada.

You use Form RC159, Amount Owing Remittance Voucher, to pay amounts owing after assessment or reassessment of your return

If you need more vouchers, you can request them:

Note

GST/HST refunds and rebates will not be paid to a person until the person has filed all the returns required under the Excise Tax Act, the Income Tax Act, the Excise Act, 2001, and the Air Travellers Security Charge Act.

How do you change a return?

If you need to change a GST34 or GST62 return you have sent us, do not file another return. If you forgot to include an amount in your eligible ITCs, simply add the omitted amount on line 106 of your next GST/HST return (or include it in your line 108 calculation if you are filing electronically). In most cases, you have up to two years to claim your ITCs.

If you need to increase the amount of the GST/HST charged or collected, you have incorrectly reported recaptured ITCs, or you have other amounts that must be reported in a previously filed return, send a letter to your tax centre indicating your Business Number, the GST/HST reporting period to be amended, and the corrected amounts per line number on your GST/HST return. Make sure an authorized representative signs the letter and includes the name and telephone number of a person we can contact if needed.

In most cases, you may also request an amendment to a previously filed GST34 return through My Business Account at My Business Account. Where your situation does not allow you to request an amendment using My Business Account, simply send us a letter as described above.

If you need to amend/revise the information reported on your original GST494 return, you must send us a new GST494 return and write the word "AMENDED" at the top of the form. The amended GST494 return should contain all the correct information that was reported on the original GST494 return as well as the amended/revised information or amounts.

Instalments by annual filers

If you are an annual filer, you may have to pay four equal instalments each year. These quarterly instalments are due one month after the end of each of your fiscal quarters. You can use Form RC160, Interim Payments Remittance Voucher to make these payments.

Effective October 2010, the Statement of Interim Payments will be mailed less frequently. For GST/HST registrants, the statement will be mailed biannually when there has been interim activity. With this statement, we will send Form RC160, Interim Payments Remittance Voucher, to make your subsequent instalment payments.

To check your up-to-the-minute account information, or to request additional remittance vouchers, go to My Business Account.

If you underpay your instalments, you will have to pay interest. Interest will be charged on an overdue amount equal to the basic rate plus 4%.

The basic rate is based on the rate charged on 90-day Treasury Bills, adjusted quarterly, and rounded up to the nearest whole percentage.

You can calculate your instalment payments and view their due dates by using the Instalment payment calculator service available in My Business Account. Your representative can access this service through Represent a Client. However, neither of these services are available if you are located in the province of Quebec.

The GST494 return you file at the end of the year will reconcile your instalments with the amount of net tax you actually owe. Include any remittance owing to balance your instalments with the total net tax for your reporting period.

Instalment method elected for calculating instalment payments for transitional year for selected listed financial institutions other than investment plans

Where the particular fiscal year of an SLFI ending in a taxation year begins before July 1, 2010 and ends on or after that day, an SLFI must elect to use one of the four methods described in Appendix B of Form GST494 to determine its instalment amount unless the SLFI is an investment plan. This election is made in Part C on page 1 of the GST494 form.

See Part C - Instalment method elected for transitional year (annual filers only) for information on making the election.

Instalments following the transitional period for selected listed financial institutions other than investment plans

For fiscal years that follow the transitional year, you revert to the general rule for calculating your quarterly instalments which are equal to 1/4 of your instalment base calculated using the formula in subsection 237(2) of the ETA.

Generally, a registrant's instalment base for a particular reporting period of the registrant is the lesser of:

  • the net tax for the reporting period; or
  • the net tax for all the reporting periods ending in the immediately preceding twelve month period multiplied by the number of days in those reporting periods divided by 365.

Instalments in the first fiscal year that you become a selected listed financial institution for persons other than investment plans

When you are an annual filer and the first fiscal year that you become an SLFI is the transitional year, you must elect to use one of the four methods as described above. If you become an SLFI in a fiscal year other than the transitional year, your quarterly instalment payments for that fiscal year are calculated based on subsection 237(5) of the ETA.

The first instalment for the first fiscal quarter in the reporting period is 1/4 of the amount determined under subsection 237(2) of the ETA discussed above.

For each of the remaining fiscal quarters in the fiscal year, your required instalment is generally equal to the lesser of 1/4 of your net tax for the year and the amount determined by the formula:

A + B

where

  1. is 1/4 of your net tax for all reporting periods ending in the preceding 12-month period, determined as if you were not an SLFI and tax was not imposed under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 of the ETA; and
  2. is the total of all amounts, each of which is determined for a participating province, by the formula:

    C x D

    where

  3. is the amount determined for A (above); and
  4. is your provincial attribution percentage for the participating province for the preceding fiscal quarters determined in accordance with the draft SLFI Regulations.

Note

The above rules do not apply if you are an investment plan and you become an SLFI because subsection 237(5) of the ETA does not apply to investment plans.

Exception

If your instalment base for your reporting period (your fiscal year) is less than $3,000, you do not have to make quarterly instalments. You only have to file your GST494 return and send us the GST/HST owing once a year.

Instalments for investment plans that are selected listed financial institutions

The special rules for certain investment plans are discussed below.

If you are an investment plan you use the general rule for calculating your quarterly instalments which are equal to 1/4 of your instalment base calculated using the formula in subsection 237(2) of the ETA, unless the special rules for certain investment plans that have certain elections in effect in the reporting period, as described below, apply.

Generally, a registrant's instalment base for a particular reporting period of the registrant is the lesser of:

  1. the net tax for the reporting period; or
  2. the net tax for all the reporting periods ending in the immediately preceding twelve month period multiplied by the number of days in those reporting periods divided by 365.

    Note
    There are no special calculations for instalments of an investment plan for the transitional year (the particular fiscal year of an SLFI begins before July 1, 2010, and ends on or after that day).

Special rules for instalments for certain investment plans with certain elections

Instalment base - stratified and non-stratified plans with real-time calculation method election

If you are a stratified or non-stratified investment plan and a real-time calculation method election is in effect throughout a fiscal year of the investment plan (in the case of the stratified investment plan this is in effect in respect of every series of the investment plan), your instalment payment is equal to the amount that would be your net tax for the fiscal quarter if the fiscal quarter were your reporting period.

Instalment base - stratified plan with reconciliation method election

If you are a stratified investment plan with a reconciliation method election in effect throughout the fiscal year the following rules apply:

  1. the description of A in the formula in subparagraph 237(2)(a)(i) of the ETA is adapted for the reporting period to be read as "is the amount that would be the net tax for the particular reporting period if the description of A6 in subsection 225.2(2), of the adapted SAM formula" were read as "is your percentage for the series, for the participating province and for your preceding taxation year, determined in accordance with the draft SLFI Regulations, and"; and
  2. subparagraph 237(2)(a)(ii) of the ETA is adapted as follows for the reporting period:
    ii)   in any other case, the amount that would be the net tax for the particular reporting period if the description of A6, in subsection 225.2(2), of the adapted SAM formula, were read as "is your percentage for the series, for the participating province and for the preceding taxation year in accordance with the draft SLFI Regulations" and

Instalment base - other investment plans with a reconciliation method election

If you are an investment plan (other than a stratified investment plan) with a reconciliation method election in effect throughout the fiscal year, the following rules apply:

  1. the description of A in the formula in subparagraph 237(2)(a)(i) of the ETA is adapted for the reporting period to be read as "is the amount that would be the net tax for the particular reporting period if the description of C in the SAM formula in subsection 225.2(2)" were read as "is your percentage for the participating province and for the preceding taxation year in accordance with the draft SLFI Regulations, and"; and
  2. subparagraph 237(2)(a)(ii) of the ETA is adapted as follows for the reporting period:
    ii)   in any other case, the amount that would be the net tax of the person for the particular reporting period if the description of C in the SAM formula in subsection 225.2(2) were read as "is your percentage for the participating province and for the preceding taxation year in accordance with the draft SLFI Regulations".

    Note
    For ease of reference we have reproduced paragraph 237(2)(a) below:

    A registrant's instalment base for a particular reporting period of the registrant is the lesser of:
    1. an amount equal to:
      1. in the case of a reporting period determined under subsection 248(3), the amount determined by the formula:

        A x 365/B


        where
        1. is the net tax for the particular reporting period, and
        2. is the number of days in the particular reporting period, and
      2. in any other case, the net tax for the particular reporting period, and...
Note

For more information on the adapted SAM formula, see Appendix A.

Completion instructions for the GST34 return / GST62 return

If you are a monthly or quarterly filer, you have to file an interim return for each reporting period in your fiscal year to report your interim net tax.

Use Form GST34, Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return for Registrants as your interim return. Unless you have filed a GST/HST return electronically, we will automatically send you Form GST34, which includes pre-printed information about your account.

Note

Form GST34 is two double-sided pages long. Use Part 1 as a working copy. Keep it for your records and send us Part 2 (the bottom of page 3).

Form GST34 is not available on our website as we can only provide it in a pre-printed format. If you do not get it within 15 working days of the end of your reporting period, or if you lose it, you can use Form GST62, Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return for Registrants (Non-personalized). This non-personalized form contains all of the same information as Form GST34, except you have to enter your personal data. Form GST62 is also not available on our website, but you can order it online at Order forms and publications or by calling 1-800-959-5525.

Note

Form GST62 is one double-sided page. Use Part 1 on the top of the front page as a working copy. Keep it for your records. Detach and send us the completed Part 2 (the bottom of page 2).

If you are not registered for the GST/HST, as a monthly filer you have to file Form GST62 as an interim return for each calendar month.

Each Form GST34 that you file for the current fiscal year is an interim return.

See Part D - Calculation under the special attribution method" on page 15 for a description of the net tax adjustment under the SAM formula.

Calculation of your interim net tax adjustment

Generally the provincial attribution percentage that you will use to calculate the interim net tax adjustment for a particular participating province is your provincial attribution percentage for the participating province for the taxation year or for the immediately preceding taxation year determined in accordance with the draft SLFI Regulations which ever is less (see Element C of the SAM formula).

Where you become an SLFI during a reporting period, the provincial attribution percentage that you will use to calculate the interim net tax adjustment for a particular participating province is your provincial attribution percentage for the participating province for the immediately preceding reporting period determined in accordance with the draft SLFI Regulations.

Note

There are special rules for certain investment plans that are discussed below.

Special rules for investment plans

  1. If you are a stratified or non-stratified investment plan that has a real-time calculation method election in effect for a fiscal year of the non-stratified plan or in respect of every series of the stratified investment plan for the fiscal year, your interim net tax adjustment is your actual net tax adjustment for the reporting period
  2. If you are a stratified investment plan and paragraph (a) above does not apply in respect of a reporting period, your interim net tax adjustment is determined as if the description of A6 in the adapted SAM formula were read "is the SLFI's percentage for the series, for the participating province and for the preceding taxation year, determined for that class in accordance with the draft SLFI Regulations."
  3. If you are an investment plan and neither paragraphs (a) or (b) apply to you in respect of a reporting period, your interim net tax adjustment is determined as if Element C in the SAM formula were read as "is the financial institution's provincial attribution percentage for the participating province and for the preceding taxation year, determined for that class in accordance with the draft SLFI Regulations."

    Note
    There are no special rules where an investment plan becomes an SLFI during a reporting period.

After the end of your fiscal year, you have to make a final adjustment to account for the actual attribution percentage for the participating provinces that applies to those reporting periods and reconcile the total of your interim net tax included in your GST34 returns with your actual net tax on the GST494 return.

To help you calculate the interim net tax adjustment for each reporting period, you may use the format in lines 020 through 040 of the GST494 return as a template.

You will find detailed instructions on how to complete your GST34 return in Guide RC4022, General Information for GST/HST Registrants. However, the following instructions on the SAM are not provided in that guide.

For each of your reporting periods:

  • Calculate your interim net tax adjustment as discussed in the previous section. The result is either a positive or a negative amount. You may use lines 020 through 040 from the GST494 return as an aid for this purpose.
  • If the result is a positive amount, include this amount with any other of your adjustments that you make on line 104 - "Adjustments" of the GST34 return (or include the amount in your line 105 calculation if you are filing electronically).
  • If the result is a negative amount, you can include this amount along with any other adjustment amounts that you make on line 107 - "Adjustments" of the GST34 return (or include the amount in your line 108 calculation if you are filing electronically).
     

    Note
    If you are an investment plan with a tax adjustment transfer election in effect for the reporting period, you would not transfer the tax adjustment transfer amount to line 104 or 107 of your return. The tax adjustment transfer amount is transferred to the investment plan manager and reported in the applicable reporting period of the manager.

  • When you complete line 106 -"Input tax credits," as an SLFI (or included the amount in your line 108 calculation if you are filing electronically), you generally cannot claim ITCs for the provincial part of the HST.
  • If you are registered for the GST/HST and you bought real property (other than an individual who purchased a residential complex) for use or supply primarily (more than 50%) in the course of your commercial activities, use line 205 -"GST/HST due on acquisition of taxable real property" to account for the tax payable on the purchase. Enter the amount of the GST/HST due on the acquisition of the real property on this line.
  • On line 405 - "Other GST/HST to be self-assessed," you must self-assess and account for the total of the following amounts:
    • the GST and the federal part of the HST on imports under sections 212, 218 and 218.01 of the ETA;
    • the provincial part of the HST that is a prescribed amount of tax for purposes of paragraph (a) of Element F in the SAM formula; or
    • the provincial part of the HST on property or a service brought into a participating province or bought other than for consumption, use or supply in the course of an endeavour of the person.

Note

SLFIs who are monthly and quarterly filers and file GST/HST NETFILE returns will not report their RITCs on lines 1401 and 1402 of Schedule B, Calculation of Input Tax Credits of those interim GST/HST NETFILE returns. However, when calculating their net tax for the reporting periods, they must include any RITCs for the period in their interim net tax calculation.

SLFIs who are builders and monthly and quarterly filers will not report their transitional tax adjustment information in Schedule A of their interim GST/HST NETFILE returns. However, these transitional tax adjustment amounts are required to be included in your net tax calculation on these interim returns. Transitional tax adjustment amounts must be included in the amounts they enter on line 103 of their GST/HST return.

SLFIs who are builders and monthly and quarterly filers will not report their grandparented housing information in Schedule A of their interim GST/HST NETFILE returns.

Completion instructions for the GST494 return

You have to complete Form GST494, Goods and Services Tax/Harmonized Sales Tax Final Return for Selected Listed Financial Institutions within six months after your fiscal year end. The GST494 return cannot be filed electronically at this time.

Part A - Identification of the SLFI or the consolidated SLFI group of investment plans

You have to complete the identification area on the first page. Enter your complete legal name, or consolidated SLFI group filing name, and the name and telephone number of the authorized person we may contact concerning this return. Enter your Business Number in the appropriate box.

Part B - Reporting period information

Enter the fiscal year of your business (year, month, and day), and the reporting period ( monthly, quarterly, or annual) in the appropriate boxes.

Part C - Instalment method elected (annual filers only)

If you are an annual filer (other than an investment plan) who is completing the GST494 final return for a reporting period that begins before July 1, 2010, and ends on or after that day, indicate which transitional method you have elected to use to determine the instalment base amount.

You can choose only one of the four instalment methods (A, B, C, or D). These options are set out in paragraphs (a), (b), (c), and (d) of subsection 58.1(3) of Part 2 of the draft New Harmonized Value-Added Tax System Regulations. Appendix B of Form GST494 provides details on the calculations of these methods.

Note

If you are a stratified investment plan or a consolidated SLFI group of investment plans, the amounts reported in Part D, Calculation under the special attribution method, Part E, Calculation of the final adjustments to net tax, Part F, Percentages and total for provinces and territories (Schedule A), and Part H, Schedule B are consolidated total amounts. For more information, see Consolidated filing for investment plans.

Part D - Calculation under the special attribution method

The special attribution method (SAM) formula

When you determine your net tax for a reporting period (by completing Parts D and E of the GST494 return), you have to use the SAM formula to make an adjustment to the net tax for each of your reporting periods so that the proper amount of the provincial part of the HST is included in your net tax liability for your current fiscal year. The following is a list of the participating provinces and the applicable provincial rate: 7% for British Columbia, 8% for Ontario, New Brunswick, and Newfoundland and Labrador, and 10% for Nova Scotia.

Note

The SAM formula is adapted for all stratified investment plans, and for non-stratified investment plans with a real-time calculation election in effect for the reporting period in a fiscal year that ends on or after July 1, 2010. For more information, see Appendix A, page 5 of Form GST494 and subsections 51(1) and (2) of the draft SLFI Regulations.

The SAM formula without adaptation used for all SLFIs (other than all stratified investment plans and non-stratified investment plans with a real-time calculation method election in effect) to calculate an SLFI's net tax adjustment related to the provincial part of the HST for a reporting period in respect of each participating province is:

[(A - B) x C x (D / E)] - F + G

where

Element A is the total of:

  1. all amounts of the GST plus the federal part of the HST that became payable or were paid without being payable by you during the particular reporting period , and the GST or federal part of the HST on amounts self-assessed under sections 212, 218 and 218.01 of the ETA (other than a prescribed amount of tax);
  2. all amounts equal to the GST plus the federal part of the HST for a supply made to you by a closely related corporation and that would have become payable by you if it were not for an election made under section 150 of the ETA (unless paragraph (c) below applies); and
  3. all amounts equal to the GST plus the federal part of the HST calculated on your supplier's cost (excluding employees' salaries, the cost of financial services, GST and/or HST) of making the supply to you, where the supplier is a closely related corporation and elections under both section 150 and subsection 225.2(4) of the ETA are in effect in respect of the supply.

Refer to Form GST27, Election or Revocation of an Election to Deem Certain Supplies to be Financial Services for more information on the election under section 150 of the ETA and Form GST497, Election Under the Special Attribution Method for Selected Listed Financial Institutions and Notice of Revocation for more information on the election under subsection 225.2(4) of the ETA.

Note

A "prescribed amount of tax" for purposes of paragraph (a) of Element A is an amount described in section 42 of Part 3 - Prescribed Amounts of Tax, and in subsection 58(2) and Section 60 of Part 5 - Investment Plans of the draft SLFI Regulations. For more information see Prescribed amounts of tax.

Element B is generally the total of:

  1. all your ITCs for the the GST and federal part of the HST (other than ITCs for a prescribed amount of tax referred to in paragraph (a. of Element A) claimed for the current or preceding reporting periods included in your return for the particular reporting period; and
  2. all amounts equal to the ITCs that you could have claimed if you were required to pay tax equal to the amount included in either paragraph (b) or (c) of Element A.

Element C is your provincial attribution percentage for each participating province. The attribution percentage for each participating province for a particular period is determined according to prescribed rules set out in Part 2 of the draft SLFI Regulations. For more information, see Provincial attribution percentages.

Note

If you are an SLFI that is an investment plan and:

  • you are not a stratified investment plan;
  • you are not a non-stratified investment plan with a real-time calculation method election in effect; or
  • you do not have a reconciliation calculation method election in effect;

    in respect of a particular reporting period in a fiscal year that ends in your taxation year in determining your net tax for the particular reporting period, the description for Element C is adapted to be read as "is your provincial attribution percentage for each participating province for the preceding taxation year determined for that class in accordance with the draft SLFI Regulations."

Element D is the tax rate for the particular participating province (7% in British Columbia, 10% in Nova Scotia, or 8% in the remaining participating provinces).

Note

The provincial tax rate for British Columbia and Ontario is effective July 1, 2010. Also, the provincial tax rate for Nova Scotia changed from 8% to 10% effective July 1, 2010.

Element E is the 5% GST or the federal part of the HST.

Element F is the total of:

  1. all amounts of the provincial part of the HST in respect of a supply made to you in the participating province, or under section 212.1 of the ETA (other than a prescribed amount of tax) that is calculated at the tax rate for the participating province that:
    1. became payable or was paid without being payable by you during:
      1. the particular reporting period; or
      2. any other reporting period that precedes the particular reporting period, where the particular reporting period ends within two years after your fiscal year that includes the other reporting period; and you were an SLFI throughout the other reporting period;
    2. you did not deduct, in determining an amount that, pursuant to subsection 225.2(2) of the ETA, is required to be added to or deducted from the net tax for any reporting period other than the particular reporting period; and
    3. you claimed in a Division V return for the particular reporting period (e.g., GST34 return, GST494 return); and
  2. all amounts equal to the provincial part of the HST payable by your supplier under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 of the ETA that is included in the supplier's cost of providing a property or service to you in your particular reporting period where you and your supplier have an election under subsection 225.2(4) of the ETA in effect.

    Note
    A "prescribed amount of tax" for purposes of paragraph (a) of Element F is an amount described in section 42 of Part 3 - Prescribed Amounts of Tax and in subsection 58(2) and section 60 of Part 5 - Investment Plans of the draft SLFI Regulations. For more information, see Prescribed amounts of tax.

Element G is the total of all amounts each of which is a positive or negative prescribed amount. These adjustments take into account transitional and other special transactions. A "prescribed amount" is an amount described in paragraphs (a) to (e) of section 49 of Part 4 of the draft SLFI Regulations.

The following is a general description of some of the amounts that are included in the calculation of prescribed amounts. This is not meant to be an exhaustive explanation of those amounts. Refer to the specific paragraph in section 49 of the draft SLFI Regulations for complete details on a particular prescribed amount.

Paragraph 49(a) includes amounts related to adjustments, refunds and credits, such as those amounts paid or payable as or on account of tax under subsection 165(2) of the ETA that was adjusted, refunded or credited under section 232 of the ETA to the extent that the amount was included in the total for Element F in subsection 225.2(2) of the ETA. As well, this paragraph includes rebates such as those amounts paid or credited to the SLFI under section 252.4 of the ETA as or on account of a rebate to the extent that the amount is in respect of tax under subsection 165(2) or section 212.1 of the ETA and was included in the total of Element F in subsection 225.2(2) of the ETA.

Paragraph 49(b) includes amounts related to deemed supplies and tax adjustments such as the amounts of tax deemed to have been paid under subsections 172.1(5), 172.1(6) or 172.1(7) of the ETA, and the tax adjustment under subsection 236(1) of the ETA to reduce the amount of ITCs with respect to meal and entertainment expenses.

Paragraph 49(c) includes amounts related to the transitional rules for Ontario and British Columbia and for the 2% Nova Scotia rate increase, such as the adjustments for GST paid on property in a reporting period that begins before July 1, 2010 and ends on or after that day and the property is not delivered until after that reporting period.

Paragraph 49(d) includes amounts related to the requirement to recapture the provincial part of the HST of certain input tax credits for Ontario and British Columbia.

Paragraph 49(e) includes a deduction from the New Brunswick, Nova Scotia, and Newfoundland and Labrador provincial part of the HST, where a supply of property or service was subject to the Ontario or British Columbia general transitional rules before the transitional reporting period, and the property or service was consumed or used exclusively in Ontario or British Columbia.

Also, if an investment plan manager has a tax adjustment transfer election in effect for the reporting period with an investment plan and the manager is an SLFI throughout the particular reporting period, the total of all the investment plan's positive and negative amounts that comprise the tax adjustment transfer amount, as calculated in section 58 of the draft SLFI Regulations, is a prescribed amount for the manager for the purpose of Element G in subsection 225.2(2) of the ETA.

Results from the SAM and adapted SAM formula

If the result is a positive amount, you must add it to your net tax. If the result is a negative amount, you must deduct it from your net tax. You must adjust the net tax amount for each of your reporting periods by completing the following calculations.

How to complete Part D

Monthly, quarterly, and annual filers have to complete lines 020 through 040 in Part D. A monthly filer completes all fields M 1 through M 12. A quarterly filer completes fields Q 1 through Q 4, while an annual filer completes the Annual fields.

Note

If you are an investment plan with a tax adjustment transfer election in effect for the reporting period, for reporting purposes, treat amounts that are prescribed amounts of tax for purposes of Elements A and F of the SAM formula (Element D in the adapted SAM formula) as a result of making this election as if these amounts were not prescribed amounts of tax.

Line 020 - GST and the federal part of the HST paid or payable

Enter the total amount of the GST plus the federal part of the HST that was paid or that became payable on purchases and expenditures in your reporting period. In addition, registrants enter the total amount self-assessed under sections 212, 218 and 218.01 of the ETA (i.e., GST and the federal part of the HST) included on line 405 of the GST34 (or GST62 ) return and non-registrants enter the total amount self-assessed included on line 402 of Form GST59, GST/HST Return for Imported Taxable Supplies and Qualifying Consideration. This amount is Element A from the SAM formula and Element A1 and/or A4 in the adapted SAM formula.

Line 021 - Input tax credits

Enter the total amount of your input tax credits (ITCs) claimed in your reporting period. Your claim for ITCs generally must not include amounts for the provincial part of the HST. This amount is Element B from the SAM formula and Element A2 and/or A5 in the adapted SAM formula.

Line 022 - Unrecoverable GST and federal part of the HST

Calculate the unrecoverable GST and the federal part of the HST for your reporting period by subtracting line 021 from line 020. Enter the result on line 022.

Line 023 - Attribution percentage for participating provinces with a 7% provincial rate

Enter your total attribution percentage for all participating provinces with a 7% provincial rate (i.e., a 12% HST rate) shown in Schedule A in Part F for your reporting period.

Line 024 - Unrecoverable GST and the federal part of the HST attributable to participating provinces with a 7% provincial rate

Multiply the amount on line 022 by the attribution percentage of line 023. Enter the result on line 024.

Line 025 - Provincial part of the HST attributable to participating provinces with a 7% provincial rate

Determine the provincial part of the HST attributable to the participating provinces with a 7% provincial rate (i.e., a 12% HST rate) by multiplying the amount on line 024 by the fraction 7/5. Enter the result on line 025.

Line 026 - Attribution percentage for participating provinces with an 8% provincial rate

Enter your total attribution percentage for all participating provinces with an 8% provincial rate (i.e., a 13% HST rate) shown in Schedule A in Part F for your reporting period.

Line 027 - Unrecoverable GST and the federal part of the HST attributable to participating provinces with an 8% provincial rate

Multiply the amount on line 022 by the attribution percentage of line 026. Enter the result on line 027.

Line 028 - Provincial part of the HST attributable to participating provinces with an 8% provincial rate

Determine the provincial part of the HST attributable to the participating provinces with an 8% provincial rate (i.e., a 13% HST rate) by multiplying the amount on line 027 by the fraction 8/5. Enter the result on line 028.

Line 029 - Attribution percentage for participating provinces with a 10% provincial rate

Enter your total attribution percentage for all participating provinces with a 10% provincial rate (i.e., Nova Scotia) shown in Schedule A in Part F for your reporting period. Your total attribution percentage should also include the attribution percentage related to unallocated amounts shown in Schedule A in Part F for your reporting period.

Line 030 - Unrecoverable GST and the federal part of the HST attributable to participating provinces with a 10% provincial rate

Multiply the amount on line 022 by the attribution percentage of line 029. Enter the result on line 030.

Line 031 - Provincial part of the HST attributable to participating provinces with a 10% provincial rate

Determine the provincial part of the HST attributable to the participating provinces with a 10% provincial rate (i.e., a 15% HST rate) by multiplying the amount on line 030 by the fraction 10/5. Enter the result on line 031.

Line 032 - Total provincial part of the HST attributable to participating provinces

Add lines 025, 028, and 031 to determine the total provincial part of the HST attributable to the participating provinces.

Line 033 - Provincial part of the HST paid or payable

If you are an annual filer, determine the total amount of the provincial part of the HST that was payable by you or that was paid by you in your reporting period without having become payable, or in a reporting period that ends within two years before the end of the fiscal year that includes the reporting period under specific circumstances. Enter the total amount on line 033 of the GST494 return.

If you are a monthly or quarterly filer, in each reporting period, determine the total amount of the provincial part of the HST payable by you and the provincial part of the HST paid by you without having become payable. Take the total amount in each reporting period and enter that amount on line 033 in the corresponding field of the GST494 return.

This amount is Element F in the SAM formula and Element D in the adapted SAM formula.

There are three provincial rates (7%, 8%, and 10%).

Line 034 - Net provincial part of the HST before miscellaneous adjustments

Calculate the net provincial part of the HST before miscellaneous adjustments by subtracting the amount on line 033 from the amount on line 032. Enter the result on line 034.

Line 035 - Positive prescribed amounts

Determine the total amount of your prescribed adjustments (Element G in the SAM formula; Element E of the adapted SAM formula) in your reporting period. If the total amount is positive, enter the positive amount on line 035. If the adjustment amount is negative, see line 037.

Line 036 - Total net provincial part of the HST

Add the amount on line 034 to the amount on line 035. Enter the result on line 036.

Line 037 - Negative prescribed amounts

If the total amount of your prescribed adjustments in your reporting period is negative, enter that amount on line 037. This amount is Element G of the SAM formula and Element E of the adapted SAM formula.

Line 038 - Total net provincial part after adjustments

To calculate your net tax adjustment for the reporting period, subtract the amount on line 037 from line 036. Enter the result on line 038.

If you do not have a tax adjustment transfer election in effect for the reporting period, or you are an investment plan manager with a tax adjustment transfer election in effect for the reporting period and the result is positive, enter that amount on line 104 in Part E of the GST494 return. If you do not have a tax adjustment transfer election in effect for the reporting period, or you are an investment plan manager with a tax adjustment transfer election in effect for the reporting period, and the result is negative, enter that amount on line 107 in Part E of the GST494 return.

If you are an investment plan and have a tax adjustment transfer election in effect for a reporting period, complete lines 039 and 040.

Line 039 - Net tax adjustment transfer amount

If you are an investment plan that has a tax adjustment transfer election with an investment plan manager in effect for a reporting period, the tax adjustment transfer amount is reported on this line for the applicable reporting period if you are a monthly or quarterly filer, or the total amount transferred to the manager throughout the year if you are an annual filer.

Note

Under consolidated filing, the total tax adjustment transfer amount is the consolidated amount calculated with respect to each individual plan that has a tax adjustment transfer election under consolidated filing in effect for the reporting period.

Line 040 - Balance after net tax adjustment transfer

If you are an investment plan and have a tax adjustment transfer election in effect for the reporting period, to calculate the remaining balance, if any, of your net tax adjustment for the reporting period, subtract the amount on line 039 from line 038. Enter the result on line 040. This amount will generally be zero where you have a reporting entity election and a tax adjustment transfer election in effect with your manager.

Note

Where the result of line 040 is positive, enter that amount on line 104, and where the result is negative, enter that amount on line 107 in Part E of the GST494 return.

Part E - Calculation of the final adjustments to net tax

You must complete all lines in Part E (lines 101 through 119, 135, 136 and 1300). Enter a zero if any amounts on these lines are nil or do not apply to you.

Line 101 - Sales and other revenue

Annual filers: Enter on line 101 the total amount of revenue from supplies of property and services, including zero-rated supplies and other revenue, from your records, or your financial statements or equivalent. Do not include provincial sales tax, the GST/HST, or any amounts you reported on a previous return. Round off the amount to the nearest dollar.

Monthly or quarterly filers: Enter the amounts that you already reported on line 101 of each GST34 or GST62 return in the corresponding fields on the GST494 return.

Line 103 - GST/HST collected and GST/HST collectible

Annual filers: Enter the total of all GST/HST collected or collectible on your supplies of property and services for which you have to charge the GST/HST (including the GST/HST collected or collectible on the sale of taxable real property, if applicable, or capital assets). You have to include the amount of GST/HST collected or collectible on both paid and unpaid invoices.

Monthly and quarterly filers: Enter the amounts that you already reported on line 103 of each GST34 or GST62 return in the corresponding fields on the GST494 return.

If, as a monthly or quarterly filer, you used GST/HST NETFILE to file your GST34 returns, the amounts on line 103 are included on line 105. Enter on line 103 of this GST494 return the amounts that correspond to the line 103 amounts included on line 105 of your GST/HST NETFILE returns.

Note

Include on line 103 any transitional tax adjustment amount you are considered to have collected as a builder of new housing.

Line 104 - Adjustments

Annual filers: Complete line 104 if you have to make adjustments to increase the amount of net tax you report for the reporting period. Enter the total of all adjustments. The following are examples of this type of adjustment:

  • a positive amount shown on line 038 or 040 of the GST494 return;
  • if you wrote off the GST/HST amount of any bad debts in a previous return, and then recovered some or all of those debts, add the amount of GST/HST you have recovered based on the formula set out in subsection 231(3) of the ETA (you may refer to the treatment of the recovery of bad debts set out in Guide RC4022, General Information for GST/HST Registrants);
  • if you are a qualifying employer in receipt of information from a pension entity that had to restate its pension rebate amount due to a tax adjustment note issued by the employer, enter the amount to be recaptured by the employer in connection with the restated shared rebate amount; and
  • recaptured ITCs for the reporting period that are not included in Element G in the SAM formula or Element E in the adapted SAM formula.

Monthly and quarterly filers: Take the amount of the adjustment shown on line 104 on each of your GST34 or GST62 returns for each reporting period, and deduct those amounts added as a result of your interim net tax adjustment calculated under the SAM formula. Take the remaining amount and add it to the positive amount, if any, from line 038 or 040 on the GST494 return. Enter the result on line 104 on the corresponding field for the same reporting periods on the GST494 return.

If, as a monthly or quarterly filer, you used GST/HST NETFILE to file your GST34 returns, enter on line 104 of your GST494 return, the amounts that correspond to the line 104 amounts included on line 105 of your GST/HST NETFILE returns.

Line 105 - Total GST/HST and adjustments for the period

Add lines 103 and 104. Enter the total on line 105.

Line 106 - Input tax credits

Annual filers: Enter the total of all eligible ITCs (GST/HST paid or payable on qualifying expenses) for the current reporting period and any eligible unclaimed ITCs from previous periods on line 106.

Monthly and quarterly filers: Take the amount that you already reported on line 106 of each GST34 or GST62 return and enter that amount on the corresponding field (i.e., line 106) for the same reporting period on the GST494 return.

If, as a monthly or quarterly filer, you used GST/HST NETFILE to file your GST34 returns, the amounts on line 106 are included on line 108. Enter on line 106 of the GST494 return the amounts that correspond to the line 106 amounts included on line 108 of your GST/HST NETFILE returns.

Line 107 - Adjustments

Annual filers: Complete line 107 if you have adjustments to make to decrease the amount of net tax you report for the reporting period. Enter the total of all adjustments. The following are examples of this type of adjustment:

  • a negative amount shown on line 038 or 040 of the GST494 return;
  • amounts of GST/HST included in an accounts receivable written-off as a bad debt provided that you have already accounted for and remitted all of the tax on your taxable supplies that resulted in that bad debt;
  • amounts of GST/HST new housing rebates in respect of the GST or federal part of the HST and provincial new housing rebates in respect of the provincial part of the HST that you paid or credited to eligible purchasers of new housing. These are the same amounts entered on line 135 of the GST494 return;
  • if you are a qualifying employer that issued a tax adjustment note for having collected tax twice on an actual supply and on a deemed supply made to a pension entity in the course of the administration of a pension plan, enter the amount of the deduction allowed; and
  • if you are a qualifying employer include the deduction allowed in respect of an elected shared pension rebate amount. Refer to Form RC4607. These are the same amounts entered on line 136 of the GST494 return.

Monthly and quarterly filers: Take the amount of the adjustment shown on line 107 on each of your GST34 or GST62 returns for each reporting period and deduct those amounts added as a result of your interim net tax adjustment calculated under the SAM formula. Take the remaining amount and add it to the negative amount, if any, from line 038 or 040 of the GST494 return. Enter the result on line 107 on the corresponding fields for the same reporting periods on the GST494 return.

If, as a monthly or quarterly filer, you used GST/HST NETFILE to file your GST34 returns, enter on line 107 of the GST494 return the amounts that correspond to the line 107 amounts included on line 108 of your GST/HST NETFILE returns including amounts reported on line 135.

Line 108 - Total input tax credits and adjustments

Add lines 106 and 107. Enter the result on line 108.

Line 109 - Net tax

Subtract the amount on line 108 from the amount on line 105. The difference is your net tax. Enter that amount on line 109.

Line 110 - Instalment payments

If you are an annual filer, enter on line 110 the amount of the instalment payments and net tax that you have already paid to us for the current reporting period.

You can view your interim balance and if needed, you can transfer a payment from one interim period to another within the same account by using the Account balance and activities service in My Business Account. Your representative can also access these services through Represent a Client.

Line 111 - Rebates

Annual filers: Enter the total amount of the GST/HST rebates that you can use to offset your amount owing (for example, from Form GST189, General Application for Rebate of GST/HST) , claimed for the period. Enter the total amount of the rebate you are claiming on line 111 of the GST494 return and attach your rebate application(s) to the GST494 return.

Monthly and quarterly filers: Take the rebates, if any, you reported on line 111 of your GST34 or GST62 returns and enter them on the corresponding fields for line 111 of your GST494 return.

Note

A pension entity may report on line 111 the net pension rebate amount shown on line H of Part C of Form RC4607, GST/HST Pension Entity Rebate Application and Election.

Line 112 - Total other credits

Add the amounts on lines 110 and 111 and enter that total on line 112.

Line 113A - Balance

Subtract line 112 from line 109. Enter the result on line 113A.

Line 205 - GST/HST due on acquisition of taxable real property

Annual filers: Complete this line:

  • if you are registered for the GST/HST and you purchased taxable real property (other than an individual who purchased a residential complex) for use or supply primarily (more than 50%) in the course of your commercial activities; or
  • if you purchased real property from a non-resident, or from a person who is a resident only because of activities they carry on through a permanent establishment in Canada, you have to self-assess and account for the tax payable on the purchase regardless of whether or not you are registered for the GST/HST.

You are required to self assess and account for the tax payable on the purchase. Enter the total amount of GST/HST due on the acquisition of the taxable real property.

Monthly and quarterly filers: Take the amount you reported on line 205 of each of your GST34 or GST62 returns or GST/HST NETFILE returns and enter it on the corresponding fields (i.e., line 205) for the same reporting period on the GST494 return.

Line 405 - Other GST/HST to be self-assessed

Complete this line if you are a registrant, or non-registrant and you have to self-assess and account for the following amounts of tax:

  • the 5% GST and the federal part of the HST on imports under sections 212, 218 or 218.01 of the ETA;
  • the provincial part of the HST that is a prescribed amount of tax for purposes of paragraph (a) of Element F in the SAM formula; and
  • the provincial part of the HST that was payable on property or a service brought into a participating province or bought other than for consumption, use or supply in the course of an endeavour of the person.

Annual filers: Enter the total of these self-assessed amounts on line 405.

Monthly and quarterly filers: Take the amount you reported on line 405 of each of your GST34 or GST62 returns, and enter it on the corresponding fields (i.e., line 405) for the same reporting period on the GST494 return.

In general, if you are a non-registrant you would include on line 405 any amounts reported on line 505 of Form GST489, Return for Self- Assessment of the Provincial Part of Harmonized Sales Tax (HST) and/or line 402 of Form GST59, GST/HST Return for Imported Taxable Supplies and Qualifying Consideration.

Line 113B - Balance

Add the amounts on lines 113A, 205, and 405, and enter the total on this line. This amount may be a positive or negative amount.

Line 114 - Interim refunds

If you are a monthly or quarterly filer, take the amounts you reported on line 114 of each of your GST34 or GST62 returns, and enter them on the corresponding fields (i.e., line 114) for the same reporting period on the GST494 return. This amount is a positive amount. If no refund is claimed, enter "0" on this line.

Line 115 - Balance after interim refunds

Add the amounts on lines 113B and 114 to calculate the balance after interim refunds. Enter that amount on line 115.

Line 116 - Tax remitted

If a payment was made for a reporting period (do not include instalment payments) enter that amount on line 116 of the applicable reporting period. This includes self assessed amounts paid by a non-registrant when Form GST489, Return for Self- Assessment of the Provincial Part of Harmonized Sales Tax (HST) and/or Form GST59, GST/HST Return for Imported Taxable Supplies and Qualifying Consideration was filed.

Line 117 - Balance

Subtract the amount on line 116 from the amount on line 115 to calculate the balance. Enter the result on this line.

Line 118 - Refund claimed

If the amount on line 117 is a negative amount, enter that amount on line 118 to claim your refund.

Line 119 - Payment enclosed

If the amount on line 117 is a positive amount, enter that amount on line 119. Print your Business Number on your cheque and make it payable to the Receiver General. Do not send cash in the mail. For more information see Filing instructions.

Note

The amounts included on lines 135, 136 and 1300 are separately identified amounts already included in the calculations of net tax. Line 135 and 136 amounts are included in line 107 and line 1300 amounts are included in line 111.

Line 135 - GST/HST new housing rebate

Annual filers: Enter on line 135 the total GST/HST new housing rebates in respect of the GST or federal part of the HST or provincial new housing rebates in respect of the provincial part of the HST that you paid or credited to eligible purchasers and that are included in the amount you entered on line 107. Do not include on this line the amount of any provincial transitional new housing rebates that you are entitled to claim as a builder or that were assigned to you by eligible purchasers. These rebates are reported on line 111. Attach the rebate applications to the GST494 return.

Monthly and quarterly filers: Separately identify the rebate amounts, if any, you reported on line 135 of your electronically filed GST34 returns in the corresponding field (line 135) of this GST494 return.

Line 136 - Deduction for pension entity rebate amount (Line G from Form RC4607)

If you are a qualifying employer that has elected to share a pension rebate amount, separately identify the amount of your net tax deduction allowed in respect of the election. This deduction should be included in the adjustment amounts reported on line 107.

For information on how to calculate the amount of this deduction, refer to Part III of Notice 257, The GST/HST Rebate for Pension Entities.

Line 1300 - Provincial transitional new housing rebates (Ontario and British Columbia)

An amount included on line 1300 should be included in the amount on line 111 of the GST494 return.

Annual filers: Enter the total amount of the provincial transitional new housing rebates (Ontario and British Columbia) that were assigned to you by eligible purchasers on line 1300 of your GST494 return. Attach the rebate applications to the GST494 return.

Monthly and quarterly filers: Enter the total amount of the provincial transitional new housing rebates (Ontario and British Columbia) that were assigned to you by eligible purchasers, if any, that you reported on line 111 of your GST34 or GST62 return in the corresponding fields of line 1300 of your GST494 return. Enter the rebate amounts, if any, you reported on line 1300 of your GST/HST NETFILE returns in the corresponding fields of line 1300 of your GST494 return.

Part F - Percentages and totals for provinces and territories (Schedule A)

Enter in columns 1 and 2 of Schedule A, as applicable, the provincial attribution percentages for each participating province, the percentage of unallocated amounts (for investment plans only), and the totals for participating provinces and unallocated amounts. The amounts for "Nova Scotia" includes the Nova Scotia offshore area and the amount for "Newfoundland" includes the Newfoundland offshore area to the extent that offshore activities, as defined in subsection 123(1) of the ETA, are carried on in that area.

Also enter in columns 1 and 2 of Schedule A, as applicable, the percentage related to non-residents deemed to be residents. The percentage entered in columns 1 and 2 as totals for non-participating provinces is the percentage remaining. The total percentage in columns 1 and 2 should equal 100%.

Note

For purposes of determining provincial attribution percentages for a stratified or non-stratified investment plan, units held by non-residents would be treated as units held by residents of Canada in non-participating provinces, unless an election is in effect under proposed subsection 225.4(6) or (7) of the ETA (which is made using Form RC4610) to opt out of this deemed resident rule. This deemed resident rule or the election to opt out of the deemed resident rule would also apply to non-resident plan members of pension entities and private investment plans.

Only investment plans are required to report the percentage for non-residents deemed by proposed section 225.4 of the ETA to be residents. The method used to calculate this percentage should be fair and reasonable and generally used consistently by the investment plan.

In the case of consolidated filing, the percentages reported on Schedule A under each column would represent aggregated percentages determined for each series/fund.

Column 3 is the total amount for the fiscal year that is Element F in the SAM formula and Element D in the adapted SAM formula for each participating province. In general terms, column 3 of Schedule A sets out the total amount for the provincial part of the HST (other than a prescribed amount of tax) for the province paid or payable by the SLFI in the fiscal year, or in a reporting period that ends within two years before the end of the fiscal year that includes the reporting period under specific circumstances for each participating province. (These circumstances are described in the description of Element F.) Complete Column 3 for each participating province.

Note

At this time, the completion of Column 3 is not mandatory; however, if you have information available to complete all or some of the lines in Column 3 it should be reported on the applicable line(s).

Part G - Certification

Every filer must complete Part G. You have to sign and date your return.

Note

Where an investment plan or investment plans and an investment plan manager have a reporting entity election in place, the investment plan manager is the person authorized to sign the return of the investment plan.

Part H - Schedule B

B1 - Recaptured input tax credits

All SLFIs, including monthly and quarterly filers, will report the amount of their recapture of input tax credits (RITCs) for the fiscal year in section B1 of Schedule B of this GST494 return.

SLFIs who are monthly and quarterly filers and file GST/HST NETFILE returns will not report their RITCs on lines 1401 and 1402 of Schedule B, Calculation of Input Tax Credits of those interim GST/HST NETFILE returns. However, when calculating their net tax for the reporting periods, they must include any RITCs for the period in their interim net tax calculation.

SLFIs that are large businesses subject to the RITC requirement for classes of specified property and services in respect of the provincial part of the HST for Ontario and British Columbia generally make specific related adjustments as part of their calculation under the SAM formula. The total amount of these adjustments is included in Element G of the SAM calculation or Element E of the adapted SAM formula in Part D and the amounts are therefore included in the amount on either line 035 or line 037.

There are exceptions (for example, for specified property and services that relate exclusively to the investigation, settlement or defence of a claim relating to property and casualty insurance) where SLFIs are subject to the general recapture rules. In this case, the RITC amounts are included on line 104.

B2 - Transitional tax adjustment

If you are a builder who is required to account for the transitional tax adjustment in your net tax calculation, report the total annual amount of this transitional tax adjustment for the fiscal year in section B2 of Schedule B of this GST494 return.

SLFIs who are monthly and quarterly filers will not report their transitional tax adjustment information in Schedule A of their GST/HST NETFILE interim returns. However, these transitional tax adjustment amounts are required to be included in your net tax calculation on these interim returns. Transitional tax adjustment amounts must be included in the amounts you enter on line 103 of your GST/HST return.

B3 - Grandparented housing

If you are a builder who is required to account for grandparented housing, report the number of housing units and the total sales amount of this grandparented housing for the fiscal year in section B3 of Schedule B.

SLFIs who are monthly and quarterly filers will not report their grandparented housing information in Schedule A of their interim return.

For more information on the transitional tax adjustment and grandparented housing, see Guide RC4052, GST/HST Information for the Home Construction Industry.

Provincial attribution percentages

An SLFI must calculate its provincial attribution percentage for each participating province to use the SAM formula to calculate its liability for the provincial part of the HST for a particular period.

The provincial attribution percentage for each participating province is determined according to prescribed rules described in sections 20 to 41 of Part 2, Percentage for a Participating Province of the draft SLFI Regulations for a particular period. It is Element C in the SAM formula or Element A3 or A6 in the adapted SAM formula.

A particular period means:

  1. for the purpose of the description of Element C or A6 in subsection 225.2(2) of the ETA, a taxation year;
  2. for the purpose of the determination of the amount for Element C in subsection 228(2.2) (interim returns in the first fiscal year of becoming an SLFI for persons other than investment plans), a reporting period; and
  3. for the purpose of the description of D in subparagraph 237(5)(b)(ii) (instalment payments in the first fiscal year of becoming an SLFI for persons other than investment plans), a fiscal quarter.

The following provides specific information on the general rules for corporations and the rules for individuals, insurers, banks, trust and loan corporations and qualifying partnerships:

  • If an SLFI is a corporation that has a permanent establishment in a participating province, its provincial attribution percentage for that province is:
    1. except where (b) or (c) applies, 1/2 of the total of:
      1. the percentage that its gross revenue reasonably attributable to its permanent establishments in that province is of its total gross revenue; and
      2. the percentage that the total of all salaries and wages paid by the SLFI to employees of its permanent establishments in that province is of the total of all salaries and wages paid by the SLFI to employees of its permanent establishments in Canada;
    2. if its total gross revenue for the period is nil, the percentage that the total of all salaries and wages paid by the SLFI to employees of its permanent establishments in the participating province is of the total of all salaries and wages paid by the SLFI to employees of its permanent establishments in Canada; and
    3. if its total of all salaries and wages paid for the period by the SLFI to employees of its permanent establishments in Canada is nil, the percentage that its gross revenue reasonably attributable to its permanent establishments in that province is of its total gross revenue.

For purposes of applying the above, and the definition "total gross revenue" for an SLFI that is not an individual, gross revenue is reasonably attributable to a particular permanent establishment if that gross revenue would be attributable to that permanent establishment under subsection 402(4) and (4.1) and 413(1) of the Income Tax Regulations if the SLFI were a taxpayer under the ITA.

Gross revenue does not include interest on bonds, debentures or mortgages, dividends on shares of capital stock, or rentals or royalties from property that is not used in connection with the principal business operations of the SLFI.

  • If an SLFI is an individual that has a permanent establishment in a participating province, its provincial attribution percentage for that province is 1/2 of the total of:
    1. the percentage that its gross revenue reasonably attributable to its permanent establishments in that province is of its total gross revenue; and
    2. the percentage that the total of all salaries and wages paid by the SLFI to employees of its permanent establishment in that province is of the total of all salaries and wages paid by the SLFI to employees of its permanent establishments in Canada.

For purposes of applying the above, and the definition "total gross revenue" for an SLFI that is an individual, the gross revenue for an SLFI is reasonably attributable to a particular permanent establishment if that gross revenue would be attributable to that permanent establishment under subsection 2603(4) of the Income Tax Regulations if the SLFI were a taxpayer under the ITA.

For both individuals and corporations described above, if the SLFI pays a fee to another person under an agreement under which that other person or employees of that other person perform services for the SLFI that would normally be performed by the SLFI's employees, the fee is deemed to be salary paid by the SLFI and the part of the fee that may reasonably be regarded as payment in respect of services rendered at a permanent establishment of the SLFI is deemed to be salary paid to an employee of the permanent establishment. A fee paid by the SLFI does not include a commission paid to a person that is not an employee of the SLFI.

  • If an SLFI is an insurer that has a permanent establishment in a participating province, despite the calculations above for individuals and corporations, its provincial attribution percentage for that province is calculated using the formula:

    A/B

    where

    A is the total of its net premiums in respect of the insurance of risk for property situated in the province and of its net premiums in respect of the insurance of risk for persons resident in that province that are included in computing its income for the purposes of Part I of the ITA; and

    B is the total of its net premiums in respect of the insurance of risk for property situated in Canada and of its net premiums in respect of the insurance of risk for persons resident in Canada that are included in computing its income for the purposes of Part I of the ITA.

"Net premiums" of an SLFI means the total of gross premiums received by the SLFI (other than consideration received for annuities) minus the total of: premiums for reinsurance paid by the SLFI; dividends or rebates paid or credited to policy holders by the SLFI; and rebates or returned premiums paid in respect of the cancellation of policies by the SLFI.

Also, no amounts that relate to an insurance policy issued by an SLFI should be included in the determination of the SLFI's net premiums to the extent that:

-    if the policy is a life or accident and sickness insurance policy (other than a group policy), the policy is issued in respect of an individual who at the time the policy becomes effective, is a non-resident individual;

-    if the policy is a group life or accident and sickness insurance policy, the policy relates to non-resident individuals who are insured under the policy;

-    if the policy is a policy in respect of real property, the policy relates to real property situated outside Canada; and

-    if the policy is a policy of any other kind, the policy relates to risks that are ordinarily situated outside Canada.

  • If an SLFI is a bank that has a permanent establishment in a participating province, its provincial attribution percentage for that province, despite the rules for corporations, is 1/5 of the total percentage of:
    1. the percentage that the total of all salaries and wages paid by the SLFI to employees of its permanent establishment in that province is of the total of all salaries and wages paid by the SLFI in Canada; and
    2. four times the percentage that the total amount of loans and deposits of its permanent establishments in that province is of the total amount of all loans and deposits in Canada.

Amount of loans/deposits is determined by the formula:

A/B

where

  1. is the total amounts outstanding on the loans made by the SLFI or the total amounts on deposit with the SLFI, at the close of business on the last day of each month that ends in the particular period; and
  2. is the number of months that end in the particular period.

For the above purposes, loans and deposits do not include: bonds, stocks, debentures, items in transit and deposits in favour of her Majesty in right of Canada; any loan made to and any deposit held by a non-resident person, unless the loan or deposit is a debt or financial instrument included in any of paragraphs 1(a) to (e) of Part IX of Schedule VI of the ETA.

Salaries and wages paid by the SLFI do not include salary or wages paid to an employee of the SLFI to the extent that the salary or wages are reasonably attributable to the rendering by the employee of the services, the supply of which is zero-rated.

  • If an SLFI is a trust and loan corporation, trust corporation or a loan corporation, that has a permanent establishment in a participating province, its provincial attribution percentage for that province, despite the rules for corporations, is the percentage of its gross revenue of its permanent establishments in that province is of the total gross revenue of its permanent establishments in Canada.

    "Gross revenue" of its permanent establishments in the participating province is the total of the gross revenue of the SLFI for the period arising from: loans secured by land situated in the participating province; loans, not secured by land, made to persons residing in the participating province; loans, other than loans secured by land situated in a country other than Canada in which the SLFI has a permanent establishment, made to persons residing in a country other than Canada in which the SLFI does not have a permanent establishment, and administered by a permanent establishment in the participating province; and business conducted at its permanent establishment in the participating province, other than business that gives rise to revenue in respect of loans.

  • If an SLFI is a qualifying partnership its provincial attribution percentage for a participating province if all of the members of the qualifying partnership are individuals, would be determined according to the rules for individuals discussed above. In any other case, the percentage would be determined under the rules for corporations discussed above.

The specific rules for investment plans are described in sections 30 to 40of Part 2 of the draft SLFI Regulations.

An investment plan will use its provincial attribution percentage based on the immediately preceding taxation year (referred to as the preceding year or general method) for Element C (as provided for in subsection 51(3) of the draft SLFI Regulations) unless it makes an election to use the reconciliation method under section 53 or the real-time calculation method under section 52 of the draft SLFI Regulations.

If a reconciliation method election is in effect for the reporting period, the provincial attribution percentage for the current year is used for Element C in the GST494 return (as provided in subsection 51(7) of the draft SLFI Regulations).

A real-time calculation method election can only be made by certain distributed investment plans.

Unless an election is in effect under proposed subsection 225.4(6) or (7) of the ETA (using Form RC4610), the units held by non-residents in an investment plan would be treated as units held by residents of Canada but not residents of anyparticipating province.

Unallocated amounts are subject to the highest provincial tax rate among the participating provinces.

The method for calculating the provincial attribution percentage varies depending on the type of investment plan.

For example, for pension entities the method of calculating the attribution percentage depends on whether the pension plan is a defined benefits or a defined contribution pension plan.

For a defined contribution pension plan the percentage is based, in general terms, on the total value of assets of the pension plan that are reasonably attributable to plan members resident in the participating province divided by the total value of assets of the pension plan that are reasonably attributable to plan members resident in Canada.

For a defined benefits pension plan the percentage is based, in general terms, on the total value of actuarial liabilities of the pension plan that are reasonably attributable to plan members resident in the participating province divided by total value of actuarial liabilities of the pension plan that are reasonably attributable to plan members resident in Canada.

If an SLFI is a pension entity of a pension plan, part of which is a defined contribution pension plan and the remaining part is a defined benefits pension plan, section 40 of the draft SLFI Regulations provides a formula to calculate the SLFI's provincial attribution percentage.

For a Private Investment Plan that is a trust governed by a deferred profit sharing plan, an employees profit sharing plan or a retirement compensation arrangement, the attribution percentage is also calculated based on the same formulas in section 37 of the draft SLFI Regulations used for a defined contribution plan. In general terms, this calculation is the total value of assets of the investment plan that are reasonably attributable to plan members that are resident in the participating province as of the attribution point divided by the total value of assets that are reasonably attributable to plan members resident in Canada as of the attribution point.

Prescribed amounts of tax

A "prescribed amount of tax" for purposes of paragraph (a) of Element A of the SAM formula (Elements A1 and A4 of the adapted SAM formula) and paragraph (a) of Element F in the SAM formula (Element D of the adapted SAM formula) is an amount described in section 42 of Part 3 of the draft SLFI Regulations. The following amounts are prescribed amounts of tax:

  1. any amount of tax that became payable, or that was paid without having become payable, by an insurer in respect of property or services acquired, imported or brought into a participating province exclusively and directly for consumption, use or supply in the course of investigating, settling or defending a claim arising under an insurance policy (other than an accident and sickness insurance or life insurance policy);
  2. any amount of tax that became payable, or that was paid without having become payable, by an SLFI, in respect of a supply or importation of property referred to in subsection 259.1(2) of the ETA; and
  3. any amount of tax that became payable, or that was paid without having become payable, by a stratified investment plan related to its provincial series.

Also, under section 60 of Part 5 of the draft SLFI Regulations if an investment plan is an SLFI throughout a particular taxation year in which the fiscal year of the plan that includes July 1, 2010 ends, and was not an SLFI throughout the taxation year of the plan that immediately precedes the particular taxation year, for purposes of paragraph (a) in Element A of the SAM formula (Elements A1 and A4 of the adapted SAM formula) and paragraph (a) in Element F in the SAM formula (Element D of the adapted SAM formula), any amount of tax under Part IX of the ETA that became payable before July 1, 2010 or that was paid before July 1, 2010 without having become payable is a prescribed amount of tax.

In addition, under subsection 58(2) of Part 5 of the draft SLFI Regulations if you are an investment plan with a tax adjustment transfer election in effect for the reporting period the following amounts are prescribed amounts of tax for purposes of paragraph (a) of Element A of the SAM formula (Elements A1 and A4 of the adapted SAM formula) and paragraph (a) of Element F in the SAM formula (Element D of the adapted SAM formula):

  1. any amount of tax in respect of a supply that became payable by the investment plan, or that was paid by the investment plan without having become payable, at a particular time that is:
    1. during the particular reporting period; and
    2. during a reporting period of the investment plan the return for which is required to be filed by a manager in accordance with subsection 56(2); and
  2. any amount of tax in respect of a supply made by the manager to the investment plan that became payable by the investment plan, or that was paid by the investment plan without having become payable, at a particular time that is:
    1. during the particular reporting period; and
    2. during a reporting period of the investment plan the return for which is not required to be filed by a manager in accordance with subsection 56(2).

Consolidated filing for investment plans

If you are a stratified investment plan or a consolidated SLFI group of investment plans, the amounts reported in Part D, Calculation under the special attribution method, Part E, Calculation of the final adjustments to net tax, Part F, Percentages and total for provinces and territories, and Part H, Schedule B of the GST494 return are consolidated total amounts.

Each investment plan in a consolidated SLFI group of investment plans completes a net tax calculation for the applicable participating provinces. Details of these calculations must be kept for audit purposes.

A stratified investment plan must do a separate SAM calculation for each series of the investment plan in each applicable participating province. Details of these calculations must be kept for audit purposes.

For both a stratified investment plan and a consolidated group of investment plans, it is the consolidated average percentages that will be entered into Schedule A and used in the calculation of lines 023, 026, and 029. This is for reporting purposes only.

The approach used to calculate this percentage should be fair and reasonable and used consistently by the investment plans with respect to the series and/or the consolidated group.

The following is an example of one approach that may be used to calculate the consolidated average percentage for a series of a stratified investment plan.

Note

The aggregate total amount(s) for all the series of the stratified investment plan will be referred to as "consolidated total amount(s)." The consolidated average attribution percentage(s) for a participating province for all the series of the stratified investment plan will be referred to as "consolidated average percentage(s)."

SI Plan is a stratified investment plan and has series X, Y and Z

SI Plan uses the following formula to determine the amount of the provincial part of the HST for a series in a participating province prior to the adjustments in Element F and G of the SAM formula (PHST):

(A - B) x C x (D/E) = PHST

where
(A - B) = $50,000
C = provincial attribution percentage for participating province
D = tax rate for participating province (i.e., 7%, 8%, 10%)
E = tax rate for GST (i.e., 5%)

Note

The amount included in each element in the above formula is the same as SI Plan's amount for the corresponding element in its SAM formula.

A stratified investment plan determines the provincial part of the HST for a series in a participating province
Province

Series X

Series Y

Series Z

PHST
British 
Columbia
$5,000 $500 $1,000 $6,500
New
Brunswick
$1,000 $1,000 $1,000 $3,000
Newfoundland
and Labrador
$500 $1,000 $2,000 $3,500
Nova Scotia $1,000 $600 $8,000 $9,600
Ontario $10,000 $10,000 $10,000 $30,000
Unallocated
amounts
$50 $150 $200 $400
Consolidated average formula for participating provinces
Province C = PHST / [(A - B)x(D/E)] =
British Columbia C = 6,500 / [50,000x(7/5)] = 9.285%
New Brunswick C = 3,000 / [50,000x(8/5)] = 3.75%
Newfoundland and Labrador C = 3,500 / [50,000x(8/5)] = 4.375%
Nova Scotia C = 9,600 / [50,000x(10/5)] = 9.6%
Ontario C = 30,000 / [50,000x(8/5)] = 37.5%
Unallocated amounts C = 400 / [50,000x(10/5)] = .4%

The consolidated average that would be entered in Schedule A and the applicable lines are as follows:

Consolidated average that would be entered in Schedule A
Province Consolidated average
British Columbia 9.285%
New Brunswick 3.75%
Newfoundland and Labrador 4.375%
Nova Scotia 9.6%
Ontario 37.5%
Unallocated amounts .4%

SI Plan will enter the consolidated average of 9.285% on line 023.

SI Plan will enter the consolidated average of 45.625% on line 026 (i.e., 3.75% + 4.375% + 37.5%).

SI Plan will enter the consolidated average of 10% on line 029 (i.e., 9.6% + .4%).

When can you expect your refund?

We process refunds of net tax claimed on GST/HST returns with the least possible delay. As long as you have included all necessary information and completed your return correctly, we will pay you interest starting 30 days after the later of the day the return is filed and the day following the last day of the reporting period and ending on the day the refund is paid.

Refund holds

If you have to file any returns under the Excise Tax Act, the Income Tax Act, the Excise Act, 2001, or the Air Travellers Security Charge Act, but have not done so, any GST/HST refund or rebate you are entitled to will be held until all required returns are filed.

Refund set-offs

If you owe any outstanding amounts under the Excise Tax Act, the Income Tax Act, the Excise Act, 2001, or the Air Travellers Security Charge Act, any GST/HST refund or rebate to which you are entitled may be used to pay that outstanding amount. Any difference will be refunded to you.

Penalty and interest

Penalties

Failure to file

A penalty will apply to any return you file late unless there is a $0 amount owing or we owe you a refund on that return. We will calculate the penalty as follows:

  1. 1% of the amount owing; plus
  2. the result of the following calculation:
     
    25% of the amount
    you calculated in a) 
    ×
    the number of months
    the return is overdue (to
    a maximum of 12 months)

Demand to file

If you receive a demand to file a return and do not do so, a penalty of $250 will be charged.

Note

You cannot claim an income tax deduction for any penalty you paid or owe for failing to file a GST/HST return.

Interest

Interest will be charged on an overdue amount equal to the basic rate plus 4%.

The basic rate is based on the rate charged on 90-day Treasury bills, adjusted quarterly, and rounded up to the nearest whole percentage.

We charge interest on:

  • any overdue balance owing on a GST/HST return;
  • late or insufficient instalment payments; and
  • any other overdue GST/HST amount that you have to remit to the Receiver General.

Note

You cannot claim an income tax deduction for the arrears interest you paid or owe for outstanding GST/HST.

Filing nil returns

If you are a monthly or quarterly filer, you have to file a GST34 or GST62 return for every reporting period even if you have no net tax to remit and you are not expecting a refund. You also have to file the GST494 return when required if you are a monthly, quarterly or annual filer. In other words, even if you have no business transactions in a reporting period, you still have to file a nil return. Otherwise, you may experience delays in getting refunds for later reporting periods and you can expect a Failure to File Reminder Notice to be sent to you. We may also charge a penalty for not filing a GST34, GST62, or GST494 return.

Once we have processed your return, we will issue you a notice of assessment. This notice explains the results of our assessment of your GST/HST return. It will also explain any changes that we made to your return.

There could be an audit of your books and records. If we complete an audit, you will receive a statement of the proposed audit adjustments. Once you receive it, you will have 30 days to analyze and discuss the proposed adjustments with the auditor. After that period, we will issue a notice of assessment.

An assessment is final and binding. However, if you do not agree with the assessment, you can file Form GST159, Notice of Objection (GST/HST) no later than 90 days after the date we sent you the notice of assessment.

If you receive a notice of assessment and would like more information go to My Business Account, or call 1-800-959-5525.

Keeping records

Usually, you have to keep all sales and purchase invoices and other records related to your business operations and GST/HST for six years from the end of the year to which they relate. However, we may ask you to keep the invoices longer than six years. If you want to destroy your records before the time limit expires, you have to send us a written request and wait for our written approval to do so. Our auditors may ask to see your records. During an audit, we will make sure that you have charged and reported GST/HST when required, and that you are entitled to all the ITCs that you claimed on your returns.

APPENDIX A - Adapted SAM formula

Adapted SAM formula for stratified investment plans

The SAM formula is adapted under section 51 of the draft SLFI Regulations for stratified investment plans.

The adapted SAM formula for stratified investment plans is as follows:

[[A x (B/C)] - D] + E

where, in general terms

A  is the total of all positive or negative amounts each of which is determined for a series of the SLFI (other than a provincial series) equal to:

  1. if an election for the real-time calculation method is in effect in respect of the series throughout the particular reporting period, the total of all amounts, each of which is determined for a particular day in the particular reporting period by the formula:

    (A1 - A2) x A3

    where
    A1  is Element A amounts in the SAM formula;
    A2  is Element B amounts in the SAM formula;
    A3  is the SLFI's attribution percentage for the series for the participating province determined for that class in accordance with the draft SLFI Regulations:

    1. if the election for real-time calculation method indicates that the SLFI's percentages for the series are to be determined on a quarterly, monthly, or weekly basis, as of the first business day of the calendar quarter, month, or week that includes the particular day, or other such day of that quarter month or week that the Minister may allow on application; or
    2. as of the particular day in any other case; or
  2. if no election for real-time calculation method is in effect in respect of the series throughout the particular reporting period, the amount determined by the formula:

    (A4 - A5) x A6

     

    where
    A4  is Element A amounts in the SAM formula;
    A5  is Element B amounts in the SAM formula;
    A6  is the SLFI's attribution percentage for the series for the participating province, determined for that class in accordance with the draft SLFI Regulations:

    1. if a reconciliation method election is in effect throughout the particular reporting period, the SLFI's percentage for the series and for the participating province for the taxation year; or
    2. in any other case, the SLFIs percentage for the series and for the participating province for the immediately preceding taxation year of the SLFI;

    B    is Element D of the SAM formula;
    C    is Element E of the SAM formula;
    D    is Element F amounts of the SAM formula; and
    E    is Element G amounts of the SAM formula

Adapted SAM formula for non-stratified investment plans with a real-time calculation method election in effect

The SAM formula is adapted under section 51 of the draft SLFI Regulations for non-stratified investment plans with a real-time method election in effect.

The adapted SAM formula for non-stratified investment plans with a real-time election in effect for the reporting period is as follows:

[[A x (B/C)] - D] + E

where, in general terms
A    is the total of all positive or negative amounts, each of which is determined for a particular day in the particular reporting period by the formula:

(A1 - A2) x A3

where
A1  is Element A amounts in the SAM formula;
A2  is Element B amounts in the SAM formula;
A3  is the SLFI's attribution percentage for the participating province determined for that class of SLFI in accordance with the draft SLFI Regulations:

  1. if the election for the real-time calculation method indicates that the SLFI's percentages are to be determined on a quarterly, monthly, or weekly basis, as of the first business day of the calendar quarter, month, or week that includes the particular day, or other such day that the Minster may allow on application by the SLFI, or
  2. in any other case, as of the particular day;

B    is Element D of the SAM formula;
C    is Element E of the SAM formula;
D    is Element F amounts of the SAM formula; and
E    is Element G amounts of the SAM formula.

Appendix B

The following is a list of some of the elections, application forms, returns, guides, and technical publications that are mentioned throughout this guide. To get copies of these publications, go to Forms and publications for GST/HST or call 1-800-959-5525.

GST/HST Notices

Notice 257, GST/HST Rebate for Pension Entities

Remittance vouchers

RC159, Amount Owing Remittance Voucher

RC160, Interim Payments Remittance Voucher

For more information

What if you need help?

If you need more information after reading this publication, go to Goods and services tax/harmonized sales tax (GST/HST) or call 1-800-959-5525. If your business is located in Quebec, call 1-800-567-4692.

Forms and publications

To get our forms and publications, go to Forms and publications for GST/HST or call 1-800-959-5525.

Teletypewriter (TTY) users

TTY users can call 1-800-665-0354 for bilingual assistance during regular business hours.

Direct deposit

Direct deposit is a faster, more convenient, reliable, and secure way to get your GST/HST refunds and rebates deposited directly into your bank account. If you are expecting refunds or rebates when you file your GST/HST returns or rebate applications, you can fill out RC366, Direct Deposit Request for Businesses. To get Form RC366, go to Direct deposit or call 1-800-959-5525.

My Business Account

My Business Account is a secure and convenient way to access and manage your business accounts online.

You can:

  • view your account balance and transactions
  • request additional remittance vouchers
  • file your return and view its status
  • calculate your instalment payments
  • view notices, letters, and statements
  • view address and banking information
  • transfer payments and immediately view an updated balance

Quick. Easy. Secure. For more information, go to My Business account.

Represent a Client

Represent a Client is an online service that enables a representative (such as an accountant, tax preparer, bookkeeper, family member or employee) to access your accounts to view the following information and more:

  • account balances
  • account transactions

For more information about how to register for this service or to learn more about Represent a Client, or to access your clients' account, go to Represent a Client.

My Payment

My Payment is a payment option that allows individuals and businesses to make payments online, using the Canada Revenue Agency's website, from an account at a participating Canadian financial institution. For more information on this self-service option, go to My Payment.

Our service complaint process

If you are not satisfied with the service you have received, please contact the CRA employee you have been dealing (or call the telephone number you have been given). If you are not pleased with the way your concerns are addressed, you can ask to discuss the matter with the employee's supervisor.

If the matter is not settled, you can then file a service complaint by completing Form RC193, Service-Related Complaint. If you are still not satisfied, you can file a complaint with the taxpayers' ombudsman.

For more information, go to Make a service complaint or see Booklet RC4420, Information on CRA-Service Complaints.

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