Tax memo: HST Place of Supply Rules Overhauled

On February 25, 2010, the Department of Finance announced major changes to the Harmonized Sales Tax (HST) place of supply rules and the Canada Revenue Agency released GST/HST Technical Information Bulletin B-103 ‘Harmonized Sales Tax – Place of supply rules for determining whether a supply is made in a province.’

The place of supply rules determine the province where a supply is made in order to determine which tax rate GST/HST registrants should charge on taxable supplies made in Canada. Effective May 1, 2010, registrants in all provinces will have to contend with a new regime of place of supply rules that may require substantial changes to their billing systems. In addition, supplies made after February 25, 2010, and before May 1, 2010, will be subject to these changes if the consideration for the supply has not become due, and has not been paid, before May 1, 2010.

Some of the key changes migrate from taxing based on the location of the supplier to taxing based on the location of the purchaser, i.e., the place of consumption. 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: HST Place of Supply Rules Overhauled (80 KB)