Tax memo: HST Transitional Rules for Ontario and British Columbia Released (Updated August 5, 2010)
Effective July 1, 2010, Ontario and British Columbia joined Newfoundland and Labrador, Nova Scotia and New Brunswick in implementing the Harmonized Sales Tax (HST). The HST applies at a rate of 13% in Ontario, and 12% in British Columbia (consisting of a 5% federal part and an 8% or 7% provincial component, respectively). In each province, the HST replaced the former provincial retail sales tax (PST) system.
On October 14, 2009, the Ontario and B.C. governments released publications outlining the transitional rules governing how the HST and each province’s PST will apply to transactions occurring around the HST implementation date. On April 6, 2010, British Columbia revised its publication and on May 31, 2010, Canada enacted the New Harmonized Value-added Tax System Regulations, SOR/2010-117, which includes the Ontario and B.C. general HST transitional rules. These rules intend to provide an orderly transition to the new system.
Read this Tax memo to learn more about the special transitional rules and how to manage the transition.
