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The Charter of the French language and its regulations govern the consultation of English-language content.

Joint Venture

What is a joint venture?

Under the GST/HST and QST systems, a joint venture is recognized as an arrangement in which two or more persons work together in a limited and defined business undertaking. It is not a partnership, trust or legal person and the expenses and revenues are distributed in mutually agreed portions. A joint venture is not considered a person for purposes of the GST/HST and QST and it cannot register for these taxes.

Note Important

For purposes of the GST/HST, it can be difficult to distinguish between a joint venture and a partnership. To help define the differences between these business types, we recommend that you refer to publication P-171R, Distinguishing Between a Joint Venture and a Partnership for the Purposes of the Section 273 Joint Venture Election, available at canada.ca.

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Designating someone as the tax administrator

Any registered contractor that meets the conditions below can jointly elect with one or more other participants in the joint venture to be designated as the person responsible for collecting and remitting the GST/HST and QST and for applying for input tax credits (ITCs) and input tax refunds (ITRs).

Joint venture eligible for the election

To make the election, a joint venture must be governed by a written agreement and its activities must involve the exploration or exploitation of mineral deposits or one of the prescribed activities described below.

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Prescribed activities

The term “prescribed activities” includes the following:

  • marketing, by the operator, of all or part of the participant's share of the joint venture's output
  • transportation of natural gas liquids by means of a pipeline that the joint venture operates as a common carrier of natural gas liquids
  • operation of a facility that is used to generate electricity
  • operation of a transmission line that is used to transmit electrical power
  • activities related to the refinement that arises from the exploration or exploitation of a timber resource, and the marketing of the resulting output
  • production and marketing of a fertilizer
  • disposal of waste
  • activities related to the ownership of an interest in an animal in order to earn income from a prize, stud fees or a sale
  • maintenance of a road
  • operation and maintenance of the North Warning System
  • operation of a farming business
  • production of liquid methanol from natural gas
  • generation and recording of seismic data
  • operation of a wood processing facility
  • construction of real property (an immovable)
  • activities related to the sale or leasing of real property (immovables)
  • operation of a pipeline, rail terminal or truck terminal used for the transportation of oil, natural gas or related or ancillary products (the addition of this activity was announced on August 8, 2022, and it is considered a prescribed activity effective January 1, 1991)

Under the GST/HST system, the prescribed activities are listed in the Joint Venture (GST/HST) Regulations (SOR/91-36).

Under the QST system, they are listed in section 346R1 of the Regulation respecting the Québec sales tax (chapter T-0.1, r. 2).


Activities related to the sale or leasing of non-residential real property (immovables) are not prescribed activities where a participant, or any person associated with or related to the participant, uses all or part of the property less than 90% of the time in commercial activities, and:

  • the participant has not acquired a taxable right to use, occupy or possess the real property (immovable); or
  • the participant has acquired such a right but does not pay the tax or pays the tax on an amount that is less than the fair market value of the right to use, occupy or possess the real property (the immovable).

The acquisition of real property (immovables) is not a prescribed activity.

Note Important

If a joint venture's primary activity is the construction of real property (immovables), activities related to feasibility studies, design work, development activities, and the tendering of bids can be considered prescribed activities. However, unless the joint venture is responsible for the construction of real property (immovables), any architectural and engineering services it provides are not prescribed activities. For example, a joint venture cannot make the election if it is hired to draw up the plans and specifications for real property (an immovable) but is not responsible for building it.

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The election to designate the operator of a joint venture as the person in charge of accounting for tax can only be made if all the following conditions are met:

  • The joint venture is not set up as a partnership, corporation, or trust.
  • The joint venture is engaged in the exploration or exploitation of mineral deposits or in a prescribed activity.
  • The operator is a participant in the joint venture.
  • There is a written agreement governing the joint venture.
  • The operator is a GST/HST and QST registrant or is required to be so registered (however, the participants other than the operator do not have to be GST/HST registrants to make the election).

Nominee corporations and agents whose primary responsibility is to hold property titles are not eligible to be the operator. For more information, see GST/HST Notice 284, Bare Trusts, Nominee Corporations and Joint Ventures, available at canada.ca/taxes.

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Effect of the election

While the election is in effect, any supply, acquisition, importation, bringing into Québec or transfer into a participating province of property or services by the operator on behalf of the participants that made the election in the course of the joint venture's activities is considered to have been carried out by the operator and not by the participants who made the election. The operator is therefore considered to have billed the GST/HST and QST on all property and services supplied, and to have paid the GST/HST and QST on all property and services acquired, imported, brought into Québec or transferred into a participating province on behalf of the participants in the course of the joint venture's activities. The operator must therefore account for that GST/HST and QST.

The operator and participants making the election are jointly and severally liable for all GST/HST and QST obligations arising from any activity the operator performs on behalf of the participants under the joint venture agreement.

A supply of property or of a service made by the operator to a participant is not subject to GST/HST and QST if the election is in effect and the participant is acquiring the property or service to consume, use or supply it in the course of the joint venture's commercial activities.

Note Important

When the operator acquires, imports, brings into Québec or transfers into a participating province property or a service on behalf of the participant in the course of the joint venture's commercial activities, the operator is not considered to have acquired, imported, brought into Québec or transferred into a participating province said property or service if the property or service is not for consumption, use or supply in the course of commercial activities and if the operator:

  • is a government; or
  • is not required to pay GST/HST or QST.

In such a case, the operator must not take into account the GST/HST or QST paid on the acquisition, importation, bringing into Québec or transfer into a participating province of the property or service, and the participant is considered to have paid all the applicable GST/HST and QST. The participant must therefore claim the input tax credits (ITCs) and input tax refunds (ITRs) to which the participant is entitled.

The participants registered for the GST/HST and the QST (or required to be so registered) can claim ITCs and ITRs to recover the GST/HST and QST they paid on expenses related to the joint venture that were incurred directly by the participants, provided the participants would have been entitled to claim the ITCs or ITRs in question had the election not been made.

Where a person acquires an interest in a joint venture from a participant that made an election with the operator, that person is considered to have made the same election with the operator at the time the interest in the joint venture was acquired.

Participants that do not make this election must account for the GST/HST and QST billed on taxable supplies made through the operator and can claim ITCs and ITRs in respect of the purchases made by the operator on their behalf.

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Making or revoking the election

The participants in a joint venture governed by a written agreement can make a joint election with the joint venture's operator at any moment during the joint venture's existence. The effective date of the election must be specified in Part 4 of form FP-621-V, Election to Have the Operator of a Joint Venture Account for the GST/HST and QST, or Revocation of Such an Election. The election remains in effect until any of the eligibility requirements cease to be met, or until the operator and the participants jointly revoke the election.

The operator and the participants can jointly revoke the election using form FP-621-V.

Keeping the form

Each participant, including the operator, must keep a copy of the duly completed form in their files for a period of six years following the date on which the election ceases to be in effect, as the document may be required in the course of an audit.

The operator must keep the election form, as it relates to all the participants over the life of the joint venture.

Participants must keep this form for as long as it applies to their situation during their participation in the joint venture.

Note Important

Do not send us this form.

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