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What is the GST/HST Election-RC4616?

December 17, 2019

Tax Question:

What is the GST/HST Election-RC4616 and who can file this?


RC4616 is an election for closely related corporations and/or Canadian partnerships to treat certain taxable supplies as having been made for nil considerations for GST/HST purposes. The corporations are defined as closely related if, at the time, not less than 90% of the value and number of issued capital shares of the subsidiary corporation are owned by the parent corporation.


This election allowed the closely related corporations to not charge or collect GST/HST on certain inter-company supplies. Taxable supplies include goods, property and other services. The election does not apply for the sale of real property or supply of property or service that is not acquired by the recipient for commercial activities. In most cases, a corporation would charge GST/HST to another corporation for the taxable supplies. One corporation would remit the GST collected to CRA and the other corporation would claim GST paid as an input tax credit on their next GST filing. As the GST nets itself out overall, CRA has allowed closely related corporations to make this election. For example, the GST/HST paid on management fees can be significant; therefore, making this election would help out with cash flow and administration. The form has to be filed on or before the day when the GST/HST return for the reporting period is due. This would be the earliest date of filing for the closely related corporations in which the election is to become effective. For example, if both corporations have a December reporting period but one files GST annually and the other files quarterly, then the earliest filing date would be January 31 of the following year.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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