TEI Comments on Possible Changes to GST/HST Joint Venture Election.

On May 29, 2019, TEI submitted a letter to the Canadian Department of Finance welcoming the government's intention to expand the joint venture election under Section 273 ot the Excise Tax Act. The letter was prepared under the aegis of TEl's Canadian Commodity Tax Committee, whose chair is Chantal Groulx. Pilar Mata of the Institute's legal staff coordinated the development of the Institute's comments.

In the February 11, 2014 Federal Budget ("Budget 2014"), the Government of Canada (the "Government") announced its intention to propose new joint venture election measures under section 273 of the Excise Tax Act ("ETA"). Tax Executives Institute ("TEI") welcomes efforts of the Department of Finance ("Finance") to expand the election and looks forward to participating in the Government's consultation process.

About Tax Executives Institute

TEI is the preeminent international association of in-house tax

professionals worldwide. The Institute's nearly 7,000 professionals manage the tax affairs of over 3,000 of the leading companies across all industry sectors in North America, Europe, and Asia. Canadians constitute approximately 15 percent of TEI's membership.

Joint Venture Election

Section 273 of the ETA permits participants in a joint venture to elect for one participant, the "operator," to be responsible for the GST/HST obligations of the entire joint venture. This election, however, is currently limited to the exploration or exploitation of mineral deposits and joint ventures engaged in activities prescribed by regulation, which primarily includes certain activities in the natural resources sector. Participants in all other joint ventures must account for GST/HST individually according to their pro rata shares of the joint venture's activities.

Budget 2014 announced the Government's intention to expand the availability of the election to all joint ventures engaged exclusively in commercial activities, provided that all the participants of the joint venture were also engaged exclusively in commercial activities...