When closely related groups for tax purposes elect not to charge GST/HST to members of the group, which of the following applies?
A)There is an actual tax saving for the group.
B)There is an actual tax saving for the member only.
C)An actual tax saving does not take place until the following year.
D)An actual tax saving does not take place.

Question

Quizplus · Accepted Answer

When closely related groups for tax purposes elect not to charge GST/HST to members of the group, there is no actual tax saving for either the group or the member. This is because GST/HST charged and collected by the group from its members is offset by the input tax credits claimed by the group, resulting in a net tax of zero. Therefore, not charging GST/HST does not result in any tax savings for the group or its members.

When Closely Related Groups for Tax Purposes Elect Not to Charge