Important Horror Flick - CRA Web Cast on Transition Rules for Reporting, Collecting and Self-assessing the HST (May - July 2010)
The Canada Revenue Agency has released an important new Web Cast on transition rules for reporting, collecting and self-assessing the harmonized sales tax (HST) during the May 1, 2010 - July 1, 2010 transition period. The purpose of this Web Cast is to provide information on how to report the HST where amounts become due, or are paid without having become due, on or after May 1, 2010 and before July 2010, for taxable property and services supplied on or after July 1, 2010. The Web Cast also provides information to certain businesses and public service bodies which are required under the HST transition rules to self-assess the provincial part of the HST on any amount that becomes due, or is paid without having become due, after October 14, 2009 and before May 2010, for taxable property or services supplied on or after July 1, 2010.
As we have been discussing, there will be situations under the transition rules where May 1, 2010 is the key date and where the HST is applicable prior to July 1, 2010. In these situations, the supplier of the property or service would be required to (1) charge the provincial part of the HST from the purchaser, and (2) account for that tax in the GST/HST reporting period that includes July 1, 2010. That being said, the supplier would be required to account for the GST on time and in the GST/HST return in the period in which the supply occurred.
This Web Cast provides suppliers with the necessary instructions so that they can comply with the new reporting rules (which are counter-intuitive to a certain degree). This is one of the more complex aspects of the HST transition rules.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
