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 facts and figures: Canada 2014