Provincial Tax Changes to Take Effect on April 1st
On April 1st, PEI will implement a harmonized sales tax (HST) of 14%. Harmonizing at a 9% provincial rate will result in a decrease of 1.5 percentage points of tax on goods and services currently subject to the PST.
While PEI is preparing for the adoption of HST, British Columbia is getting ready to abolish it.
During the summer of 2011, British Columbians voted in favour of eliminating the HST in a province-wide referendum. Following the vote, the BC government committed to transition back to a PST/GST system as quickly as responsibly possible. Effect April 1st, PST on the majority of good and services will be 7%, and GST will be 5%. In order to prepare for this change, businesses who will be providing taxable goods or services in BC need to register for PST on or before April 1, 2013 (http://www2.gov.bc.ca/gov/topic.page?id=A613037D98294F319378D9B33829B3FC&title=Register%20to%20Collect%20PST). Generally speaking, the date taxable goods/services are invoiced will determine the tax calculated on the invoice, so taxable goods and services invoiced after April 1, 2013 will be subject to 7% PST and 5% GST.
Businesses providing taxable goods and/or services to customers in BC or PEI should be mindful of the April 1st deadline so that they can ensure they are charging the correct tax and the correct amount of tax on invoices sent to their clients.
For more information regarding the transition in PEI and BC, the CRA has a helpful website (http://www.cra-arc.gc.ca/gncy/hrmnztn/menu-eng.html), as does the BC Government (http://www2.gov.bc.ca/gov/topic.page?id=D9A34ECE8F384848ADEF899426F4F6CF) and the PEI government (http://www.peihst.ca/index.php3?lang=E).