Late-filed Section 156 Elections and Revocations

Posted on September 30, 2016 by djb | Posted in GST/HST

As follow up to prior articles , in July of 2016, the Canada Revenue Agency (CRA) released  P-255, Late-filed Section 156 Elections and Revocations.   The CRA has announced that it will accept late filed RC4616 election forms under certain circumstances and on a case by case basis.    The guidelines they outline for acceptance is as follows:

  1. A written request to have the election or revocation of an election filed late must be submitted to the Assistant Director of Audit of the tax services office of the first specified member making or revoking the election as identified on the Form RC4616.
  2. The written request must provide a clear explanation as to why the specified members have filed the election or revocation late and must include the completed and signed paper copy of Form RC4616.
  3. The request must also be signed by the first specified member and include an undertaking that the first specified member will notify the other specified member whether or not the late-filed election or revocation is accepted by the CRA.
  4. In the case of making an election, the written request must indicate that both specified members meet all of the conditions for making the election as of the requested effective date, for example, that they are specified members of the same qualifying group, that is, registrants that are closely related. In the case of multiple elections, all of the specified members identified on Form RC4616 must meet all of the conditions as of the requested effective date.
  5. As of the requested effective date for the election, both parties to the election must have consistently treated the applicable supplies made between them as having been made for no consideration and have included a statement to that effect in the written request.
  6. The requested effective date of a late-filed election or revocation must relate to a reporting period that is not statute barred.
  7. The parties to the late-filed election or revocation must not have been negligent or careless in complying with the provisions of section 156 of the Act.
  8. Both parties making the late-filed election or revocation must not have filed an objection or appeal relating to an assessment for a reporting period that is within the retroactive period that is from the requested effective date up to the day the request is made.

If you notice that your corporate group has been relying on the closely related election, but subsequently noticed that the form was not filed by the deadline, this administrative policy could help.   If you notice your group has not filed the election in a timely manner, we would be pleased to discuss your situation further and help you rectify the situation.

For more information, click here.

Article written by: Greg Sawatsky, MAcc, CPA, CA

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