• 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, an election made by three members referred to as 1, 2, and 3, would apply to supplies made between all of the following combinations of those members:

• 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 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

Under section 151 of the ETA, each electing member is deemed to be a financial institution throughout the period during which the election is in effect. In addition, based on subsection 123(1) and subparagraph 149(1)(a)(xi) of the ETA, each electing member is a listed financial institution throughout a particular tax year if it is deemed under section 151 to be a financial institution at any time in that 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 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. This 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, if 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 two 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 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 a full year. 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 two 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, of which each member 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 includes:

• a bank

• a corporation that is licensed or otherwise 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

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

• an investment plan

• a tax discounter

• a corporation that is deemed to be a financial institution under section 151 because it has an election under section 150 in effect to have certain taxable supplies deemed to be financial services

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

Where do you send this form?

File this form electronically, or send it and any attachments (if applicable) to the tax services office (TSO) that serves your area.

Forms and publications

The CRA encourages electronic filing of your form. If you require a paper version of our forms and publications, go to canada.ca/cra-forms-publications or call 1-800-959-5525.

What if you need help?

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