Canadian Sales Tax Rates (as at October 1, 2016)

Canadian Sales Tax Rates Chart
As at October 1, 2016

 

Province/Territory Provincial Sales Tax GST/HST Rate GST Included in PST Tax Base Combined Rate
British Columbia 7% 5% N/A 12%
Alberta Nil 5% N/A 5%
Saskatchewan 5% 5% No 10%
Manitoba 8% 5% No 13%
Ontario N/A 13% N/A 13%
Quebec 9.975% 5% N/A 14.975%
New Brunswick N/A 15% N/A 15%
Nova Scotia N/A 15% N/A 15%
Newfoundland/Labrador N/A 15% N/A 15%
Prince Edward Island N/A 15% Yes 15%
Northwest Territories Nil 5% N/A 5%
Yukon Nil 5% N/A 5%
Nunavut Nil 5% N/A 5%

The HST rate for Newfoundland/Labrador increased to 15% from 13% effective July 1, 2016.

The HST rate for New Brunswick increased to 15% from 13% effective July 1, 2016.

The HST rate for Prince Edward Island increased to 15% effective October 1, 2016.

The ITC recapture rate in Ontario decreased to 50% as of July 1, 2016.

Steps To Take

  1. Are you charging the correct amount of sales tax?
    • Sales departments/accounts receivable departments that have programmed HST-included pricing will need to update the sales tax rates in their systems.
    • Even companies that calculate sales tax separately will need to make sure that computer programs have been updated.
  2. Are you paying the correct amount of sales tax?
    • Payroll departments will need to review invoices in the months following the sales tax increases to ensure that they are being charged the correct amount of sales tax.
    • This means not paying the higher rate for property and services provided before July 1, 2016 and paying the higher rate, if applicable, after July 1, 2016.
  3. Are you claiming the correct amount of ITCs?
    • The finance department will need to make sure that computerized programs that break out the amount of HST payable on invoices have been updated to reflect the higher HST rates.
  4. Are Ontario businesses not giving too much back?
    • The ITC recapture rate in Ontario has decreased to 50% from 75%.  This means the amount of ITCs that companies can claim may have increased for some large businesses.
    • Have you updated your computerized records to reduce the recapture rate?

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com. Alternatively, visit www.lexsage.com.

This Blog/Web Site is made available by Cyndee Todgham Cherniak and LexSage Professional Corporation for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your province.

The law firm LexSage does not have any connection with this Blog/Web Site.

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