Tax Bulletin

November 2015

Reminder: Election by members of a group of closely related persons

Members of a group of closely related persons for GST/HST and QST purposes may elect not to charge GST/HST and QST on certain intercompany transactions.

A member qualifying for this election is generally:

1. A registrant,
2. That is engaged exclusively in commercial activities,
3. That has not elected to deem the supplies it makes to be supplies of financial services,
4. That is a corporation resident in Canada or a Canadian partnership.

Mandatory filing of the election form

The election should be made using one of the following forms:

• FP 4616: if the member files GST/HST and QST returns or only QST returns with Revenu Québec (“RQ”);
• RC4616: if the member files GST/HST returns with the Canada Revenue Agency (“CRA”).

It is important to remember that, effective January 1, 2015, the election form must be filed with RQ and the CRA. This filing requirement applies to supplies made after 2014.

Taxpayers who have already made such an election prior to 2015 must re-file the election
and submit the duly completed form before January 1, 2016.