There is an estimated $300 million per year available for GST/HST pension entity rebates—an average of approximately $25,000 per eligible plan—but much of that money may not be recovered for plan fiscal years ending in 2010. Pension entities can now claim 33% of GST/HST paid by the plan, plus the amount of any GST/HST deemed collected under pension plan deemed supply rules. For some plans, eligibility to make a claim could expire as early as March 31, 2012. For the large number of plans with the calendar year as their fiscal year, some claim eligibility will expire as early as June 30, 2012, if the plan is not a GST registrant. The first expiry date for plans that are GST registrants is June 30, 2013.
The claim deadlines can be confusing, as different claim periods and deadlines apply depending on whether a pension entity is, or is not, a GST registrant. The claim period for a registrant pension entity matches its reporting period, which is the calendar year, and the deadline is two years following the filing deadline for the reporting period, which is June 30 of the year following the end of the reporting period. For non-registrant pension entities there are two claim periods for each fiscal year: the first covering the first two fiscal quarters and the second covering the last two fiscal quarters.
As an example, a non-registrant pension entity with an October 1 to September 30 fiscal year could claim the pension entity rebate for the first and second quarters ending Dec. 31, 2009 and March 31, 2010, provided the claim is made by March 31, 2012. Fiscal years beginning prior to Sept. 23, 2009 do not qualify for the rebate, unless the plan was a qualifying multi-employer pension plan.
The complex maze of other GST/HST rules may be discouraging many plan sponsors from claiming the pension entity rebate. Pension plan deemed supply rules will apply and selected listed financial institution (SLFI) rules may also apply. However, I am happy to report that so far the experience of my firm’s clients has been that costs and fees to comply with these rules are fully recovered from the value of the pension entity rebate. Costs for subsequent years are expected to be much lower as administrative infrastructure for compliance will already be in place.
The table below sets out deadlines for pension entity rebates and other filings. It is worth noting also that other employee benefit plans may have the same SLFI filing requirements noted in the table; however, the pension entity rebate would not apply to such plans.
