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Use this form to elect to not have gst/hst apply to the sale of a business or part of a business. If the sale is structured as the sale of a going concern, both the buyer and the seller must file an election under section 167 of the excise tax act to exempt the transaction from gst/hst. The tangible assets will not be subject to gst/hst if a valid section 167 election is made
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However, the licenses and services will be subject to gst/hst It is possible for a sale of a business to take place where the personal property is not subject to gst/hst, even without an election under subsection 167 (1), if the requirements of paragraph 141.1 (1) (b) are met. So, part of the purchase price needs to be allocated to the licenses and services and gst/hst charged on that amount.
When selling the supplies of your business, the purchaser may qualify for tax election 167 to avoid paying gst/hst in addition to the purchase price on the supplies.
According to section 167 of the excise tax act, business owners can use the gst44 to file for an exemption from gst/hst in the purchase or sale of a business This act is a legal ruling extrapolating on the various types of taxes and when they may not apply to certain exemptions. Well i asked mona tessier, partner of indirect tax at welch llp and she said the “simple answer is yes, however, there is a special election that the seller and buyer can enact to avoid collecting/paying this tax”. Section 167 of the excise tax act is a tax election that allows a business owner to defer the payment of the goods and services tax (gst) and the harmonized sales tax (hst) on the sale of the business.
