BRITISH COLUMBIA AND PRINCE EDWARD ISLAND
CHANGES AS OF APRIL 1, 2013
Further changes are expected in your systems to reflect changes in sales taxes following the announcement by British Columbia (“BC”) to revert to the combined GST and provincial sales tax (“PST”), and by Prince Edward Island (“PEI”) to harmonize with the HST. Here’s an overview of the changes.
British Columbia
The general PST rate will be 7%. RST is generally applied to :
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Retail sale or rental of goods, including the import of CB goods
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Software
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Accommodation
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Legal services
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Services for the installation or repair of goods
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Telecommunications services
Anyone making a taxable CB supply* must register and collect PST. Certain exceptions apply for non-resident businesses and small vendors (under $10,000). Purchases for resale are generally exempt from PST. The sale or rental of real estate is generally exempt.
Prince Edward Island
The HST rate will be 14%, with a federal component of 5% and a provincial component of 9%. The HST has the same tax base as the GST. ÎPE will apply the same restrictions applicable in Ontario to the provincial component of certain expenses for companies with sales in excess of $10 million, including associated companies.
Restricted expenses are :
- Road vehicles under 3000 KG
- Energy
- Meals and entertainment
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Telecommunications
Transitional rules
General rules apply depending on when the tax becomes payable. Tax generally becomes payable on the date shown on the invoice or the payment date indicated in a written agreement. As of April 1, 2013, GST/PST will begin to apply in BC, while HST will begin to apply in PEI.
General rules apply depending on when the tax becomes payable. Tax generally becomes payable on the date shown on the invoice or the payment date indicated in a written agreement. As of April 1, 2013, GST/PST will begin to apply in BC, while HST will begin to apply in PEI.
Goods and services
The GST/PST combination applies to taxable supplies for which tax became payable on or after April 1, 2013 and was not paid before. If the tax becomes due more than once, it applies to any part of the consideration that becomes due on or after April 1, 2013.
The GST/PST combination applies to taxable supplies for which tax became payable on or after April 1, 2013 and was not paid before. If the tax becomes due more than once, it applies to any part of the consideration that becomes due on or after April 1, 2013.
Building
GST applies to a sale of real property if both ownership and possession are transferred after March 2013. The same rule applies to the leasing of real estate as to the leasing of movable property or services.
Similar rules apply to PEI’s HST.
Should you require any further information regarding the changes effective April 1, 2013, please do not hesitate to contact :
Benoît Vallée, CPA, CGA
Senior Director, Indirect Taxes
Telephone: 514-878-0240
bvallee@demersbeaulne.com
Senior Director, Indirect Taxes
Telephone: 514-878-0240
bvallee@demersbeaulne.com
