Fact Sheet - HST Credit? What’s That?

Originally posted on Jun 02, 2012
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Fact Sheet - HST Credit? What’s That?

Since July 2010, the Canada Revenue Agency (CRA) has adopted a new program to refund GST/HST paid by pension plan administrators on services related to the running of a registered pension plan. This program is not applicable to RRSP annuitants.


Read more about it on the CRA’s website:

·         http://www.cra-­‐arc.gc.ca/E/pbg/gf/rc4607/rc4607-­‐14e.pdf

·         http://www.cra.gc.ca/gsthst, and look up GST/HST Notice 257, The GST/HST Rebate for Pension Entities, or call the CRA at 1-­‐855-­‐666-­‐5166.


Under this program, a registered pension plan administrator who files a special return (RC4607) can receive a refund of 33% of all HST paid in connection with the pension plan. The new program is authorized by Section 261.01 of the Excise Tax Act.


For example, if during the course of a year, a pension plan paid $10,000 in fees, with

$1,300 in HST, the CRA will refund the plan administrator $433 (33% of $1,300).

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In light of the new tax rules that penalize passive investments within CCPCs, advisors must understand how pension legislation can become a powerful tool to deal with wealth succession, business succession, and tax optimization within a corporate environment.

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