Tax Memo: Ontario Harmonized Sales Tax — Recapture of Input Tax Credits

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(Update November 10, 2010)

On February 1, 2010, Ontario’s Ministry of Revenue released three documents related to the Ontario Harmonized Sales Tax (HST):

• Information Notice No. 5 and Tax Tip #1 deal with the recapture of input tax credits (ITCs) that relate to the provincial portion of HST and
• Tax Tip #2 deals with HST invoicing requirements and indicates that the HST will follow the GST disclosure and invoicing rules. Invoices must reflect the total HST amount or the total HST rate, apparently with no requirement to identify the federal and provincial portions of HST separately.

Information Notice No. 5 was updated on May 14, 2010, to include changes to the meaning of ‘specified energy’ and ‘specified telecommunications service.’ Further, on June 17, 2010, regulations were released with respect to the recapture of input tax credits, in Part 6 of the New Harmonized Value-Assess Tax System Regulations No. 2.