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Source: CICA
Companies that conduct business in British Columbia or Ontario are preparing to harmonize their provincial sales tax with the federal GST on July 1, 2010. In addition, the HST would generally apply to prepayments starting on May 1, 2010 for goods or services that would be provided on or after July 1, 2010. Currently businesses cannot deduct the PST from the cost of materials and other products they buy. Under harmonization, businesses will be able to claim tax credits for these purchases, the intent being that the cost of goods will be more competitive and the environment more attractive for new business.
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What does the HST mean for your industry?
Businesses need to prepare for the HST by adjusting accounting systems and operations and reviewing financial budgets, capital expenditure budgets and human resource allocations. David Schlesinger, National Leader, Indirect Tax at KPMG, suggests that businesses consider whether their systems are prepared to deal with the effect of tax rate changes on sales tax matrices and the effect of the HST on tax-inclusive existing contracts. Although he believes most businesses will benefit from the HST, there are variations across industries.
To find out what the change means for your business, visit http://www.kpmg.ca/en/ms/pstgst/
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Preparing for the transition
The Canadian Revenue Agency has released transitional rules to help businesses in Ontario and B.C. understand and determine which tax – the existing provincial retail sales tax or the provincial part of the HST – will apply to transactions that straddle the July 1, 2010 implementation date.
www.cra-arc.gc.ca/tx/pstr/trnstnl/menu-eng.html
In Ontario
The Ontario government’s general transition rules include support for small business, rebates for new housing purchases and rentals, and point-of-sale rebates.
For general transition rules, see www.rev.gov.on.ca/en/notices/hst/03.html.
To become HST ready, it is also important to know key dates relating to RST accounts in Ontario www.rev.gov.on.ca/en/taxchange/transition.html.
In B.C.
The B.C. government’s general transition rules help guide businesses and consumers in a smooth changeover to the HST and include technical details about paying the HST in the period around July 1, 2010.
For more information, see HST General Transitional Rules.
As well, BDO’s Tax Bulletin The Transition to the HST in British Columbia illustrates how rules impact business and provides information on how to prepare and implement the HST and wind down the B.C. Social Services Tax (PST).
www.bdo.ca/library/publications/tax/documents/the-transition-to-the-hst-in-british-columbia.pdf
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HST Place of Supply rules change sales tax landscape
On February 25, 2010, the Department of Finance announced amendments to the existing HST place of supply (POS) rules which have been in existence since Newfoundland, New Brunswick and Nova Scotia harmonized their provincial sales taxes with the federal GST in 1997. The amendments, in conjunction with the harmonization of Ontario and B.C., are drastically changing the sales tax landscape not only for those businesses located in one of the harmonized provinces, but also for all Canadian businesses that make supplies of goods or services to persons or businesses located in the harmonized provinces. Fasken Martineau’s recent taxation bulletin provides more details.
www.fasken.com/taxation_bulletin-march_2010/
Companies that conduct business in British Columbia or Ontario are preparing to harmonize their provincial sales tax with the federal GST on July 1, 2010. In addition, the HST would generally apply to prepayments starting on May 1, 2010 for goods or services that would be provided on or after July 1, 2010. Currently businesses cannot deduct the PST from the cost of materials and other products they buy. Under harmonization, businesses will be able to claim tax credits for these purchases, the intent being that the cost of goods will be more competitive and the environment more attractive for new business.
/////
What does the HST mean for your industry?
Businesses need to prepare for the HST by adjusting accounting systems and operations and reviewing financial budgets, capital expenditure budgets and human resource allocations. David Schlesinger, National Leader, Indirect Tax at KPMG, suggests that businesses consider whether their systems are prepared to deal with the effect of tax rate changes on sales tax matrices and the effect of the HST on tax-inclusive existing contracts. Although he believes most businesses will benefit from the HST, there are variations across industries.
To find out what the change means for your business, visit http://www.kpmg.ca/en/ms/pstgst/
/////
Preparing for the transition
The Canadian Revenue Agency has released transitional rules to help businesses in Ontario and B.C. understand and determine which tax – the existing provincial retail sales tax or the provincial part of the HST – will apply to transactions that straddle the July 1, 2010 implementation date.
www.cra-arc.gc.ca/tx/pstr/trnstnl/menu-eng.html
In Ontario
The Ontario government’s general transition rules include support for small business, rebates for new housing purchases and rentals, and point-of-sale rebates.
For general transition rules, see www.rev.gov.on.ca/en/notices/hst/03.html.
To become HST ready, it is also important to know key dates relating to RST accounts in Ontario www.rev.gov.on.ca/en/taxchange/transition.html.
In B.C.
The B.C. government’s general transition rules help guide businesses and consumers in a smooth changeover to the HST and include technical details about paying the HST in the period around July 1, 2010.
For more information, see HST General Transitional Rules.
As well, BDO’s Tax Bulletin The Transition to the HST in British Columbia illustrates how rules impact business and provides information on how to prepare and implement the HST and wind down the B.C. Social Services Tax (PST).
www.bdo.ca/library/publications/tax/documents/the-transition-to-the-hst-in-british-columbia.pdf
/////
HST Place of Supply rules change sales tax landscape
On February 25, 2010, the Department of Finance announced amendments to the existing HST place of supply (POS) rules which have been in existence since Newfoundland, New Brunswick and Nova Scotia harmonized their provincial sales taxes with the federal GST in 1997. The amendments, in conjunction with the harmonization of Ontario and B.C., are drastically changing the sales tax landscape not only for those businesses located in one of the harmonized provinces, but also for all Canadian businesses that make supplies of goods or services to persons or businesses located in the harmonized provinces. Fasken Martineau’s recent taxation bulletin provides more details.
www.fasken.com/taxation_bulletin-march_2010/
