Friday, March 15, 2013

April 1: BC to Revert to the PST While PEI Implements HST

We post here occasionally about developments in the Canadian tax system to keep our readers aware of important changes and new requirements.

For instance, back in 2011, we wrote that voters in British Columbia had decided to discontinue the Harmonized Sales Tax (HST) and return to the provincial sales tax, or PST. As part of this deharmonization, BC taxpayers had to repay the $1.6 billion of transitional funding received from the federal government. BC officials also had to re-implement the PST. Officials have completed their work and BC will revert back to the PST on April 1. (Taxpayers, of course, will still owe 5% GST on certain goods and services after April 1, as well.) Current PST laws and regulations are all now available on BC’s PST website here. Retailers are also required to register for the PST and can do so online here. Note that even if a business was registered under the prior PST, that business must now re-register.

In other news, Prince Edward Island will join New Brunswick, Newfoundland and Labrador, Nova Scotia, and Ontario, when it implements the HST on April 1. PEI will have a HST rate of 14%, of which 5% represents the federal component and 9% represents the provincial component. This represents a reduction in the total tax rate applicable in PEI, which was formerly 15.5%. PEI has produced a helpful checklist of tasks retailers should complete before April 1. For instance, retailers should determine whether they must self-assess the provincial part of the HST for supplies purchased after February 1, 2013, and should determine whether any tax is due on the provincial part of the HST for any payments due or paid to them after November 8, 2012. Retailers should be sure to file their final PST returns by April 20, 2013, as well.

Vendors should take a close look at their current tax practices and make sure their systems are updated to reflect both the return to the PST in BC and the implementation of the HST in PEI. And if that’s alphabet soup to you, our readers, you might consider contacting your tax professionals to make sure any sales you make into these or any other Canadian provinces comply with local taxes in effect!

No comments:

Post a Comment