Canada: Required investor data collection under GST/HST and QST systems

Goods and services tax / harmonized sales tax (GST/HST) and Quebec sales tax (QST)

Goods and services tax / harmonized sales tax (GST/HST) and Quebec sales tax (QST)

Certain distributed investment plans that do not request in writing required information from certain investors by 15 October 2022, and collect such data by 31 December 2022, may incur higher goods and services tax / harmonized sales tax (GST/HST) and Quebec sales tax (QST) costs. 


The information sharing rules under the GST/HST and QST systems ensure that investors provide information to distributed investment plans so that these plans can update their systems, calculate their tax costs and file their GST/HST and QST returns.

Distributed investment plans that are “selected listed financial institutions” (SLFIs) under the GST/HST and QST rules must request in writing information from certain investors. These investors (i.e., "selected investors" and certain other investors) are required to provide information if they receive such a request. In addition, investors that are "qualifying investors" must provide specific information to distributed investment plans annually even if they do not receive a written request. If a securities dealer receives a written request for information from a distributed investment plan, it must provide specific details with respect to units held by its clients. Note that investors and securities dealers could face penalties if they do not provide specific details by the deadline.

Distributed investment plans include mutual fund trusts, mutual fund corporations, investment corporations, mortgage investment corporations, unit trusts, certain pension entities, segregated funds of insurers and investment limited partnerships. These distributed investment plans collect data under the GST/HST and QST rules to calculate their provincial attribution percentages which are then used to calculate tax adjustments in their GST/HST and QST returns.

KPMG observation

Plans that do not collect the required data by 31 December and have not requested the information from their investors by 15 October must generally allocate some of their investors to the highest rate HST-participating provinces, which may translate to higher indirect tax costs depending on the actual details of those investors. For example, some investors from non-participating provinces may be reallocated to a 15% tax rate (i.e., the highest tax rate of HST) instead of a 5% tax rate.

Read a September 2022 report prepared by the KPMG member firm in Canada


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