TEI summarizes concerns with GST/HST nil consideration election.

• Position: Tax Executives Institute, goods and services tax, harmonized sales tax

On December 22, 2014, TEI submitted a letter to the Canadian Revenue Agency (CRA) listing concerns with the new filing obligations under section 156 of the Excise Tax Act raised by TEI members that would be best addressed in the new election form and its instructions. The letter was prepared under the aegis of TEI's Canadian Commodity Tax Committee, whose chair is Richard Taylor of Rogers Communications Inc. Contributing substantially to the development of TEI's comments was Chantal Grouix of SNC-Lavalin Group, Inc. Daniel B. De Jong of the Institute's legal staff coordinated the development of the Institute's comments.

On February 11, 2014, the Federal Budget announced a number of changes to section 156 "Election for Nil Consideration" of the Excise Tax Act ("ETA"), which allows supplies between qualifying members of a closely related group to be made free of GST/HST. The new rules require all section 156 elections or revocations occurring on or after January 1, 2015 to be filed with Canada Revenue Agency ("CRA") on Form RC4616 by the filing deadline of the month in which the election or revocation occurred. Parties to an existing election will also need to complete and file Form RC4616 with CRA to continue qualification for nil consideration treatment by December 31, 2015.

During the annual liaison meeting last month with representatives from Tax Executives Institute ("TEI" or "the Institute") and CRA, we were informed that CRA is currently drafting the new paper Form RC4616 and related instructions. The new form will permit a group of closely related entities making the election to consolidate their elections in a single form. The timeframe for release of the new paper form is January 2015. Electronic filing of the election through My Business Account is expected to be available in April 2015. As businesses analyze their filing obligations under the new section 156 rules, a number of concerns have arisen that would be best addressed in the new election form and its instructions. This letter summarizes those concerns for CRA to consider as it finalizes its guidance for publication in January.

TEI is the preeminent international association of in-house tax professionals worldwide. The Institutes nearly 7,000 professionals manage the tax affairs of more than 3,000 of the leading companies across all industry sectors in North and South America, Europe, and Asia. Canadians constitute approximately fifteen-percent of TEI's membership, with our...