• GST27 - Election or Revocation of an Election to Deem Certain Supplies to be Financial Services for GST/HST Purposes

General information

What is the effect of this election?

When a member of a closely related group, of which a listed financial institution is a member, makes this election jointly with another member of the group, supplies of services and supplies of property by way of lease, licence, or similar arrangement made between them are deemed to be supplies of financial services. These supplies of financial services are exempt from the GST/HST. All other supplies retain their tax status regardless of the election.

Every combination of eligible members whose names appear in Part A of this form (and on any attached page) is considered to have made an election. For example, a form having 3 electing members referred to as 1, 2, and 3, would have the following combinations:

• 1 and 2

• 1 and 3

• 2 and 3

This election does not apply to the following supplies:

• property held or services rendered by a member of a closely related group as a participant in a joint venture with another person while an election under section 273 of the Excise Tax Act (ETA) made jointly by the member and the other person is in effect

• an imported taxable supply, as defined in section 217 of the ETA

• a supply of services in relation to the clearing or settlement of cheques and other payment items that are described in paragraph 150(2)(c) of the ETA

While this election is in effect, each electing member is deemed to be a financial institution and is a listed financial institution as described in subparagraph 149(1)(a)(xi). If at any time in a particular tax year a corporation is a person as described in subparagraph 149(1)(a)(xi), the corporation is a listed financial institution throughout the particular tax year.

How do you make this election?

To make this election, fill out parts A, B, and C of this form and file it on or before the day which the GST/HST return (such as Form GST34-2) must be filed for the reporting period that includes the effective date of the election. The election is effective on the day specified in Part C of this form. The form is to be filed by the earliest date that a GST/HST return is due from the members who intend to make the election. For example, where Corporation X has a quarterly reporting period based on calendar quarters and Corporation Y is an annual filer on a calendar year basis, for an election to become effective on January 1 of a particular year, the election by the 2 corporations must be filed on or before April 30 of that year, that is, the due date of the return for Corporation X.

How do you revoke this election?

To revoke this election, fill out parts A and C of this form and file it on or before the day which the GST/HST return (such as Form GST34-2) must be filed for the reporting period that includes the effective date of the revocation of the election. The form is to be filed by the earliest date that a GST/HST return is due from the members who intend to revoke the election. This election can be revoked if it has been in effect for at least 365 days. The revocation is effective on the day specified in Part C of this form.

Every combination of members whose names appear in Part A of this form (and on any attached page) is considered to have revoked their election. An election that is not revoked ceases to be in effect on the earliest of:

• the day an electing member ceases to be a member of the closely related group

• the first day the closely related group does not include a listed financial institution that is described in any of subparagraphs 149(1)(a)(i) to (x) of the ETA

When an election made jointly by 2 members ceases to be in effect, the members cannot make another election without the written authorization of the Minister.

Definitions

Closely related group – means a group of corporations each member of which is a registrant resident in Canada and is closely related, within the meaning in section 128 of the ETA, to each other member of the group.

Listed financial institution – A person is a listed financial institution throughout a particular tax year if at any time in the particular year the person is:

• a bank

• a corporation that is authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee

• a person whose principal business is as a trader or dealer in, or as a broker or salesperson of, financial instruments or money

• a credit union

• an insurer

• a segregated fund of an insurer

• the Canada Deposit Insurance Corporation

• a person whose principal business is the lending of money or the purchasing of debt securities or a combination of the 2 activities

• an investment plan

• a tax discounter

• a corporation that is deemed to be a financial institution because it has an election in effect to have certain supplies deemed to be exempt financial services

For more information, see GST/HST Memorandum 17.6, Definition of "Listed Financial Institution".

Where do you send this form?

Send this form and any attachments (if applicable) to your tax services office (TSO) that serves your area.

What if you need help?

For more information, see GST/HST Memorandum 17.14, Election for Exempt Supplies, or call 1-800-959-8287.

To get our forms and publications, go to canada.ca/gst-hst-pub.