After the EU VAT changes as of January 01, 2010 this year it is Canada's turn for major change in its sales tax system. The Value Added Tax ("VAT") known as the Goods and Services Tax ("GST") is migrating on July 01, 2010 to two of the most significant Canadian Provinces in terms of trade Ontario and British Columbia as they are parting with their provincial sales taxes ("PST"). The new tax which is an extension of the GST will be called the harmonized sales tax ("HST") and will incorporate the federal GST rate and the provincial sales tax component. As a result Ontario will merge its 8% PST with the federal 5% GST for a combined 13% HST. British Columbia will merge its 7% PST with the 5% federal GST for a combined 12% HST. For your information we will be including Ontario HST rules as part of our March 2010 Content release so you will be able to test your company transactions. British Columbia has not passed the legislation yet so we are unable to do the same at this time.
Both provinces have approved transitional rules that will be incorporated in the HST legislation to provide consumers and businesses with guidance to determine where the existing PST or the new HST will apply to transactions that straddle July 01, 2010.
Are You Ready for These Important Dates?
October 14, 2009 - Generally, signifying that certain businesses and public sector bodies engaged in GST exempt business activities may be required to self-asses the provincial component of the HST on payments that become due or are prepaid after this date and before May 01, 2010 for property and services to be provided on or after July 01, 2010.
May 01, 2010 - Generally, signifying that HST will apply to payments that become due or are prepaid on or after May 01, 2010 for property or services to be provided on or after July 01, 2010.
July 01, 2010 - HST implementation date
October 31, 2010 - Outstanding Ontario PST will become payable by this date if not invoiced.
Part two of this blog posting will highlight scenarios that show how the application of the general transitional rules depend on the type of transactions involved. Stay tuned.
Both provinces have approved transitional rules that will be incorporated in the HST legislation to provide consumers and businesses with guidance to determine where the existing PST or the new HST will apply to transactions that straddle July 01, 2010.
Are You Ready for These Important Dates?
October 14, 2009 - Generally, signifying that certain businesses and public sector bodies engaged in GST exempt business activities may be required to self-asses the provincial component of the HST on payments that become due or are prepaid after this date and before May 01, 2010 for property and services to be provided on or after July 01, 2010.
May 01, 2010 - Generally, signifying that HST will apply to payments that become due or are prepaid on or after May 01, 2010 for property or services to be provided on or after July 01, 2010.
July 01, 2010 - HST implementation date
October 31, 2010 - Outstanding Ontario PST will become payable by this date if not invoiced.
Part two of this blog posting will highlight scenarios that show how the application of the general transitional rules depend on the type of transactions involved. Stay tuned.
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