Information Requirements Related to Delayed Assessments of Participating Employers of Pension Plans (Subsection 172.1(8.01))

GST/HST Notices - Notice 348
September 2026

Table of contents

• Overview
• Deemed taxable supplies by participating employers – pension entity
• Deemed taxable supplies by participating employers – master pension entity
• Rebate for pension entities and the time limitation period
• Later addition to net tax of employer
• Provision of information about the taxable supply deemed to have been made by the participating employer to the pension entity

Overview

Section 261.01 provides for a GST/HST rebate for pension entities. In addition, section 172.1 contains deeming rules which require an employer to self-assess tax for deemed taxable supplies in certain circumstances. An explanation of the rules pertaining to these provisions is included in GST/HST Notice 257, For discussion purposes only - Draft GST/HST technical information bulletin, The GST/HST Rebate for Pension Entities.

On June 22, 2023, Bill C-47, Budget Implementation Act, 2023, No. 1, 2023, received royal assent. Bill C-47 provided for, among other things, new rules that permit a pension entity of a pension plan to claim an input tax credit (ITC) or a rebate under section 261.01 (or make a related joint election to share the rebate) in respect of certain amounts of tax beyond the normal two-year time limit. The ITC or rebate may be claimed in cases where a delayed assessment of a participating employer of a pension plan would make it impossible for the pension entity to meet the two-year time limit in respect of the amount. An explanation of these new rules is included in GST/HST Notice 347, Delayed Assessments and the GST/HST Rebate for Pension Entities.

Under the deeming rules in section 172.1, a participating employer of the pension plan is deemed in certain circumstances to have made a taxable supply and the pension entity is deemed to have paid tax in respect of that deemed supply. This notice explains the prescribed information that must be provided by a participating employer of a pension plan that has been assessed an amount of tax in respect of a taxable supply that the employer is deemed to have made to the pension entity for a reporting period. The prescribed information is required to be provided to the particular pension entity that is deemed to have paid tax under these deeming rules so that the pension entity may claim an ITC or the pension rebate in respect of this deemed tax.

Deemed taxable supplies by participating employers – pension entity

A GST/HST registrant that is a participating employer of a pension plan is generally deemed to have made a taxable supply where the following apply:

• Under subsection 172.1(5), the employer acquires a specified resource (as defined in subsection 172.1(1)) for the purpose of making a supply of all or part of that specified resource to a pension entity for consumption, use, or supply by the pension entity in the course of pension activities of the pension plan
• Under subsection 172.1(6), the employer consumes or uses an employer resource (as defined in subsection 172.1(1)) for the purpose of making a supply of the employer resource to a pension entity for consumption, use, or supply by the pension entity in the course of pension activities in respect of the pension plan
• Under subsection 172.1(7), the employer consumes or uses an employer resource in the course of pension activities of the pension plan and the consumption or use is not for the purpose of making a supply of property or a service to the relevant pension entity

The acquisition, consumption, or use of a specified resource or an employer resource that is an excluded resource (as defined in subsection 172.1(2)) does not trigger the above deemed taxable supply rules.

An employer that is deemed to have made a taxable supply under subsection 172.1(5), 172.1(6), or 172.1(7) is also deemed to have collected tax in respect of the deemed taxable supply. An explanation of these rules and the corresponding calculations of tax deemed collected by the employer are included in GST/HST Notice 257, For Discussion Purposes Only: The GST/HST Rebate for Pension Entities, and GST/HST Technical Information Bulletin B-108, Changes to GST/HST Rules for Pension Plans – New Section 157 and Amendments to Section 172.1.

Deemed taxable supplies by participating employers – master pension entity

In certain master trust arrangements, a registrant participating employer is deemed, on the last day of a fiscal year of the employer, to have made a taxable supply of a specified resource or an employer resource to a master pension entity and is deemed to have collected tax in respect of that supply in any of the following circumstances:

• Under subsection 172.1(5.1), a supply of a specified resource (other than an excluded resource) is deemed to be made when all of the following conditions are met:
  • Where the employer acquires at any time in the fiscal year a specified resource for the purpose of making a supply of all or part of the resource to a master pension entity
  • The specified resource is for consumption, use, or supply by the master pension entity in the course of pension activities of any pension plan in the master pension group in respect of the employer
  • The employer is not a selected qualifying employer (within the meaning of subsection 172.1(9)) of any pension plan in the master pension group
• Under subsection 172.1(6.1), a supply of an employer resource (other than an excluded resource) is deemed to be made when all of the following conditions are met:
  • Where the employer consumes or uses at any time in the fiscal year an employer resource for the purpose of making a pension supply to a master pension entity
  • The employer resource is for consumption, use, or supply by the master pension entity in the course of pension activities of any pension plan in the master pension group in respect of the employer
  • The employer is not a selected qualifying employer (within the meaning of subsection 172.1(9)) of any pension plan in the master pension group
• Under subsection 172.1(7.1), a supply of an employer resource (other than an excluded resource) is deemed to be made when all of the following conditions are met:
  • Where the employer consumes or uses at any time in the fiscal year an employer resource in the course of pension activities in respect of any pension plan in the master pension group in respect of the employer
  • The employer is not a qualifying employer (within the meaning of subsection 172.1(10)) of any pension plan in the master pension group
  • The pension activities relate exclusively to the establishment, management, or administration of the master pension entity or the management or administration of its assets
  • The consumption or use is not for the purpose of making a pension supply under subsection 172.1(6) or 172.1(6.1)

An explanation of these rules and the corresponding calculations of tax deemed collected by the employer are included in GST/HST Notice 304, GST/HST Pension Plan Rules for Master Trusts.

Rebate for pension entities and the time limitation period

Under section 261.01, a pension entity of the pension plan (as defined in subsection 123(1)) is generally eligible to claim a rebate calculated on eligible amounts for a claim period of the pension entity and may also elect to share the rebate amount with participating employers of the pension plan.The pension rebate amount is calculated based on eligible amounts. Eligible amounts for a claim period include deemed tax under section 172.1 and the tax actually paid by the pension entity for expenses relating to the pension plan such as management and administration expenses of the pension plan.

Where the pension entity is a registrant, an application for the pension rebate for a claim period must be filed by the entity within two years after the filing due date of the return for the reporting period that includes the claim period. Where the pension entity is not a registrant, it must file the pension rebate application within two years after the end of its claim period.

Given that a pension entity may only apply for a rebate within a two-year time limit, there may be circumstances where an audit assessment (including a reassessment) of a previous reporting period of a participating employer could render the pension entity ineligible to make a rebate application. Specifically, since section 298 generally allows a four-year period in which the Minister of National Revenue (Minister) may raise an assessment, a participating employer of a pension plan could be assessed for an amount of GST/HST on a deemed taxable supply under section 172.1 within the four-year audit period but beyond the two-year time limit available for pension entities to claim a pension rebate. The addition of new subsection 172.1(8.01) may effectively permit a pension entity, in the specific circumstances described in that provision, to claim a rebate (or in cases where the pension entity is a registrant, an ITC) in respect of an amount of tax beyond the normal two-year time limit.

Subject to section 169, a person that is a registrant may be entitled to ITCs to the extent that a particular property or service is acquired for consumption, use, or supply in the commercial activities of the person. A pension entity that is a registrant may therefore be eligible for ITCs, subject to the same rules.

Later addition to net tax of employer

New subsection 172.1(8.01) applies when, in making an assessment of the net tax for a reporting period of a person (for example, a participating employer of a pension plan), the Minister determines that the tax in respect of a taxable supply deemed to have been made by the person under section 172.1 is greater than the amount of tax that had been accounted for in respect of the supply prior to the assessment. In such a case, a pension entity of the pension plan may be considered to have paid the difference between the amount of tax assessed by the Minister and the amount of tax already accounted for (if any) in respect of the deemed supply under section 172.1. As a result of subsection 172.1(8.01), the pension entity may be eligible for a section 261.01 rebate (or an ITC if eligible) in respect of the tax it is deemed to have paid.

More specifically, subsection 172.1(8.01) applies when all the following conditions are met:

• The Minister assesses or reassesses the net tax for a reporting period of a person that was a participating employer of one or more pension plans during the reporting period
• In making the assessment, the Minister determines that the tax in respect of either of the following supplies is greater than the amount of tax that has been accounted for in respect of the supply prior to the assessment:
  • a supply of all or part of a specified resource deemed to have been made by the person under any of paragraphs 172.1(5)(a) and 172.1(5.1)(a)
  • a supply of an employer resource deemed to have been made by the person under any of paragraphs 172.1(6)(a), 172.1(6.1)(a), 172.1(7)(a), and 172.1(7.1)(a)
• The person has paid or remitted all amounts owing to the Receiver General in respect of the person's net tax for the reporting period

Where these conditions are met, the rules in paragraphs 172.1(8.01)(a) and (b) apply.

Firstly, paragraph 172.1(8.01)(a) requires that the employer provide prescribed information in respect of the deemed supplies to each pension entity of the pension plan that is deemed to have paid tax in respect of the supply. Further, the prescribed information is required to be provided to each pension entity before the day that is one year after the later of the following two days:

• the day on which the Minister sends the notice of the assessment to the person
• the first day on which all amounts owing in respect of the person's net tax for the reporting period of the person, if any, have been paid or remitted to the Receiver General

Secondly, where the participating employer provides the information prescribed by paragraph 172.1(8.01)(a) to the pension entity on a particular day that is after the end of the last claim period of the pension entity that ends within two years after the day on which the deemed supply was made, subparagraph 172.1(8.01)(b)(i) provides that the pension entity is deemed to have paid tax on the particular day determined using the formula in that subparagraph.

Unless the participating employer provides the prescribed information to a pension entity within the time frame stipulated by paragraph 172.1(8.01)(a), the pension entity is not deemed to have paid the tax determined under 172.1(8.01)(b) and is, therefore, not able to claim a pension entity rebate for that amount.

If the assessment by the Minister is subsequently revised (such as, if the participating employer appeals the assessment or the Minister issues a new assessment), then the amount of tax that the pension entity is deemed to have paid under subparagraph 172.1(8.01)(b)(i) is also based on this new determination.

Provision of information about the taxable supply deemed to have been made by the participating employer to the pension entity

While nothing is currently prescribed for purposes of paragraph 172.1(8.01)(a), the participating employer must provide the following information to each pension entity that is deemed to have paid tax in respect of all or part of the specified resource or in respect of the employer resource:

• the name of the employer
• the employer's business number, if applicable
• a statement by the employer certifying that it received a notice of assessment, reassessment, or additional assessment, as the case may be, sent by the Minister
• the reporting period and fiscal year information indicated in the notice of assessment (or reassessment or additional assessment) sent to the employer
• the date on which the Minister sent the notice of assessment (or reassessment or additional assessment) to the employer
• the first date on which all amounts owing to the Receiver General in respect of the net tax for the reporting period, if any, had been paid or remitted by the employer
• a description of the taxable supply (including whether the supply was in respect of all or part of a specified resource or in respect of an employer resource) that the employer is deemed to have made and which of the deeming paragraphs 172.1(5)(a), 172.1(5.1)(a), 172.1(6)(a), 172.1(6.1)(a), 172.1(7)(a), or 172.1(7.1)(a) is applicable
• the date that the supply was deemed to have been made by the employer as determined by the Minister in making its assessment of the employer’s net tax for the reporting period
• the amount of tax that had been accounted for by the employer in respect of the supply that was deemed to have been made by the employer prior to the Minister's assessment of the employer’s net tax for the reporting period
• the amount of tax determined in respect of the supply that the employer is deemed to have collected following the Minister’s assessment of the employer’s net tax for the reporting period
• the amount of the GST (or federal part of the HST) and provincial part of the HST, if any, in respect of the supply that the pension entity is deemed to have paid under whichever of paragraphs 172.1(5)(d), 172.1(5.1)(d), 172.1(6)(d), 172.1(6.1)(d), 172.1(7)(d), and 172.1(7.1)(d) is applicable following the Minister's assessment of the employer’s net tax for the reporting period
• the name of the pension entity and GST/HST registration number, if applicable
• a statement as to whether the pension entity is an SLFI
• a statement by the employer certifying the specific date on which the prescribed information described above was sent to the pension entity