Sales Tax Harmonization
View this page in: FrançaisManage any compliance challenges when accommodating the new value added tax system
2011-09-30: QST Harmonization Announcement
Quebec and the federal government announced today the signing of an agreement regarding sales tax harmonization. Under this agreement, Quebec will obtain financial compensation of $2.2 billion from the federal government for the harmonization of the QST with the GST. Both governments will make their best efforts to enter into a Canada-Quebec Comprehensive Integrated Tax Coordination Agreement by April 1, 2012. The changes that Quebec has agreed to make to the QST should be implemented on January 1, 2013. The most important changes to the QST system arising from the agreement on harmonization with the GST system are as follows:
- The QST will apply on the selling price excluding GST
- All the QST exemptions will be maintained
- Harmonization of the QST rules with the GST for financial services and financial institutions, and elimination of the Quebec compensatory tax on financial institutions.
- Phase out of the restrictions on input tax refunds for large businesses during a phase-out period of not more than three years starting in 2018.
- Revenue Quebec will continue to administer the GST/HST/QST in Quebec, except for selected listed financial institutions and specified financial institutions for which the GST/HST/QST will be administered by the Canada Revenue Agency
As a result of the 2010 Harmonized Sales Tax (HST) implementation in Ontario and British Columbia, affected organizations continue to have work to do to ensure they have properly accounted for these revised tax systems. Businesses that revamped their accounting systems and compliance and reporting procedures must now ensure these changes result in appropriate tax collection and remittance. They may also need to replace interim fixes and workarounds with permanent cost-effective solutions.
Layer onto these changes the subsequent elimination of the British Columbia HST and the reinstatement of Provincial Sales Tax (PST) and Goods and Services Tax (GST) on April 1, 2013 and there are many changes to manage. The transitional rules for the return to British Columbia PST, when released, may impact buying decisions as companies that fully recover HST on business purchases may accelerate capital and other acquisitions pre-April 1, 2013, while those that do not enjoy full HST recovery may choose to defer purchases that qualify for exemption under the PST.
Quebec’s announced harmonization of its Quebec Sales Tax rules with the GST to take place on January 1, 2013 will result in further changes to systems and reporting.
This is an unusual time of change and activity in how the various provinces are structuring their indirect tax regimes resulting in necessary vigilance by the taxpayer to ensure compliance.
How PwC can help
PwC Canada's Indirect Tax team has significant experience in addressing these tax reform changes for our clients. We can assist with post-HST implementation reviews by evaluating processes, calculations and compliance in conjunction with applicable transitional rules to gauge correct collection of tax, claims for input tax credits, and tax adjustments.
Our team can also assist companies in preparing for the transition in British Columbia and Quebec.
For more information on the HST, contact a member of our Indirect Tax team or read the HST-related publications below.
Tax memo: QST to be harmonized with GST by 2013Learn about the implications of the September 30, 2011 announcement by the Quebec government to harmonize the QST with the GST.
Tax facts and figures: Canada 2011
PwC's Tax Rates BlackBerry™ application and annual publication will save you time and effort by providing up-to-date personal and corporate tax information. Download them now.
Tax memo: 2011 Manitoba Budget: Tax Highlights
On April 12, 2011, Manitoba´s Minister of Finance, Rossan Wowchuk, presented the province´s 2011 budget.
Tax Memo: British Columbia Harmonized Sales Tax — Recapture of Input Tax Credits (Updated November 9, 2010)
Some corporations may be required to record significant adjustments to future tax balances and income tax expense, to reflect corporate tax rate reductions implemented by Bill C-28, which received royal assent on December 14, 2007.
Tax Memo: Ontario Harmonized Sales Tax — Recapture of Input Tax Credits (Updated November 10, 2010)
Read this PwC Tax Memo for the updates to three Ontario HST documents on recapturing input tax credits.
Tax Controversy and Dispute Resolution: Tax Memo -- Auditor General Gives the CRA’s Commitment to Service a Positive Review
Get details on the CRA’s new process for handling service-related complaints from taxpayers in this special Tax Memo issue.
Tax Memo – Major GST/HST Changes for Pension Plans
Two rules will change the way pension plans and employee sponsors are treated for GST/HST purposes. Learn more about them and how PwC can help evaluate their impact.
Tax Memo: New GST/HST Electronic Filing Requirement
HST implementation in July 1, 2010, now means some registrants must file their GST/HST returns electronically. Read this Tax Memo to understand how the change affects your business.
Tax Memo: Sales Tax Harmonization in British Columbia and Ontario – Manufacturing
Under the HST, manufacturers pay more tax overall on their purchases but, they can recover most of it by claiming ITCs on their GST/HST returns. Learn more in this publication.
Tax Memo: Sales Tax Harmonization in British Columbia and Ontario – A Guide for Non-Residents
HST implementation is the most substantial tax reform in British Columbia and Ontario in several years. This Tax Memo highlights key potential implications.
Tax Memo: Sales Tax Harmonization – Financial Services (Updated August 4, 2010)
Harmonization substantially increases the tax burden for the financial sector. Read this Tax Memo to learn how to address the move to the HST.
Tax memo: HST Transitional Rules for Ontario and British Columbia Released (Updated August 5, 2010)
This Tax memo covers the phasing out of the PST and how to manage the transition to the HST.
HST— July 2010
This brochure discusses what Canadian retailers need to know about the new harmonized sales tax for British Columbia and Ontario. It includes background, transitional rules and actions required of retailers.
Tax Memo: 2010 Ontario Budget
On Thursday, March 25, 2010, Ontario's Minister of Finance, Dwight Duncan, presented the province's 2010 budget. Get PwC Canada's analysis and contact us for help determining the budget’s impact.
Tax Memo: 2010 Manitoba Budget: Tax Highlights
Manitoba’s Minister of Finance Rosann Wowchuk presented the province’s budget. Read this Tax Memo for PwC's analysis.
In Print: Semantics Antics: More on “arranging for”
This article highlights the challenges taxpayers continue to face when complying with the Ministry of Finance’s December 14, 2009 release, complicated by the ongoing revelations following the CRA’s Notice 250.
Tax Memo: HST Place of Supply Rules Overhauled
This Tax Memo provides a brief overview of the main place of supply rules under the new regime and as outlined in Bulletin B-103.
Tax Memo: 2010 British Columbia Budget
Get PwC Canada's response to the BC budget in this Tax Memo and contact us for help determining the budget’s impact on your business.
Tax Memo: British Columbia Harmonized Sales Tax —Recapture of Input Tax Credits
BC’s Ministry of Finance released details on a temporary restriction of ITCs on the HST’s provincial portion for big businesses, including financial institutions. Get PwC’s analysis in this Tax Memo.
Tax Memo: Ontario Harmonized Sales Tax — Recapture of Input Tax Credits
On February 1, 2010, Ontario’s Ministry of Revenue released three documents proposing large businesses repay input tax credits attributed to the HST’s provincial component. Learn more in this Tax Memo.
Tax Harmonization 2010 Webcast
Get an idea of the HST’s impact on organizations doing business in Ontario and British Columbia from this PwC webcast.
Tax Memo: GST/HST: Retroactive Legislation Proposed to Tax Discretionary Investment Management Services
The Department of Finance plans to announce legislation to clarify that discretionary investment management services are subject to the GST. Get PwC’s perspective in this Tax Memo.
Tax Memo: Ontario Sales Tax Harmonization – Input Tax Credit Restrictions
This November 2009 publication, released by Ontario’s government, details special restrictions on ITCs for the provincial portion of the HST paid by large businesses.
Transcript: Tax Tracks – A PwC Tax Management Services Podcast Series -- Episode 7
Do you grasp harmonization and the transitional rules for BC and Ontario? Get a better understanding by reading the transcript of PwC’s Tax Tracks podcast episode on the topic.
Tax Memo: HST Transitional Rules for Ontario and British Columbia Released
Read our Tax Memo to learn how the transitional rules will affect the application of the HST on the sale of goods, services and other areas in Ontario and BC.
Tax Memo: British Columbia Sales Tax Harmonization
BC's minister of finance announced the province will harmonize its sales tax system on July 1, 2010. This PwC Tax Memo analyzes the impact of the announcement on your business.
In Print: Ontario PST Harmonization
This article discusses the characteristics of the proposed Ontario Value-Added Tax (VAT).
In Print: Ontario to Harmonize their Sales Tax with the GST
Learn how Ontario's harmonized tax system will impact the information technology (IT) sector.
Tax Memo: Application of Ontario's Single Sales Tax to New Homes
A new Ontario bulletin confirms province's 2009 budget announcement concerning a new single sales tax launch on July 1, 2010. The bulletin introduces rebates, transitional rules and disclosure requirements.
Insurance Review: Spring 2009
The Spring 2009 edition of PwC's Insurance Review discusses managing fraud during an economic crisis, vendor management, Ontario sales tax harmonization, and the risks insurers face.
In Print: Goods and Services Tax Reaches a Difficult Age
This PwC In Print issue identifies the GST's successes and failures.
In Print: HST and Retail Issues
This PwC 1997 CICA Symposium paper details why tax inclusive pricing remains a risk for "PST provinces" such as Ontario, that will proceed with melding sales taxes with the GST.
2009 Ontario Budget
Ontario Finance Minister Dwight Duncan presented the province’s 2009 budget on Tuesday, March 26, 2009. Read PwC's analysis of the budget.
Tax Memo: Ontario Sales Tax Harmonization
Read PwC's industry-specific Tax Memos to learn the impact of the HST on your Ontario-based business and how to plan for transition.
Developments: SR&ED Planning for Ontario Corporate Tax Harmonization
This Developments issue highlights the key and opportunities issues facing SR&ED claimants after the harmonization of the Ontario and federal corporate tax systems.
Ontario Corporate Tax Harmonization for Insurance Companies
This Tax Memo addresses Ontario corporate tax harmonization issues that affect insurance companies.
Insurance Review, Year-end 2007
The Centre for the Study of Financial Innovation earlier this year completed its inaugural Insurance Banana Skins survey of leading members of the insurance industry to find out their concerns about the soundness of the financial markets.
You are in: Services > Tax > Sales Tax, VAT and Trade