The Department of Finance’s proposals relating to the Income Tax Act, sales tax and other legislation adds complexity where compliance is already extremely challenging for pension plan administrators, according to Greg Hurst, managing director of Greg Hurst & Associates.
In the legislative proposals, published earlier this month, the government released explanatory notes in relation to the Income Tax Act and regulations, but in relation to proposed amendments to the Excise Tax Act, it said “the explanatory notes aren’t ready to be published in both official languages yet and it could take a bit of time before they would be ready to be published.”
The proposed amendments to the Excise Tax Act include provisions in relation to the GST/HST pension plan deemed supply rules, GST/HST pension entity rebate rules and the selected listed financial institutions attribution method (GST/HST) regulations.
Hurst believes the new provisions affecting pension entities relate to situations where there have been re-assessments — usually following an audit — that result in additional tax attributable to a prior period that’s paid or deemed paid in a later period.
“Given that, after almost 12 years, the Canada Revenue Agency has never finalized its discussion draft of GST/HST Notice 257 “Draft GST/HST technical information bulletin, the GST/HST rebate for pension entities,” it is perhaps not surprising that Finance Canada may be struggling to explain changes to pension plan GST/HST rules.”