Section 167 election (GST/HST)

By default, GST/HST applies to the sale of most business assets. On a seven-figure asset sale that is a very large amount of cash to find at closing, and while a registered buyer would normally recover it as an input tax credit later, the timing gap alone can be enough to strain a deal.

What the election requires

• A sale of a business, or a part of a business capable of being operated separately
• The buyer acquiring substantially all of the property needed to carry it on
• A joint election by both parties — one side cannot make it alone
• The buyer generally being a GST/HST registrant
• Filing within the required timeframe, which is a real deadline, not a formality

What it does not cover

The election does not sweep in everything. Certain supplies remain taxable, and a share sale does not need the election at all, since shares are not taxable supplies in the first place. Getting the scope wrong is a common and expensive error.