Importation and exportation issues surrounding HST/GST do not just exist when taxable supplies cross the Canadian border but also when taxable supplies are imported to participating provinces.
These issues arise as a result of some of the provinces being participating which means that the province has harmonized its provincial sales tax with the GST and therefore charge HST (harmonized sales tax). These provinces are:
- New Brunswick 15%
- Newfoundland and Labrador 15%
- Nova Scotia 15%
- Ontario 13%
- Prince Edward Island 15%
The remaining provinces and territories have not harmonized and therefore charge GST of 5%.
The requirement to self assess the provincial portion of the HST exists when you import a taxable supply into a participating province from a non-participating province, or into a participating province that has a higher HST rate than the one the supply was purchased in. The requirement to self assess exists when the taxable supply is to be used at least 10% or more in a participating province (or province of greater tax) and the self assessed tax payable in a calendar month is greater than $25.
For goods, this requirement exists when the taxable good is brought into the participating province. There are some exceptions to this requirement, the main 2 are:
- You are a registrant and the taxable good is to be used at least 90% in your commercial activities;
- Motor vehicles because this will be assessed at the provincial licensing authority.
For services and intangible personal property (IPP) this requirement exists when you are a resident of a participating province and acquire a taxable service or IPP in a non-participating province (or participating province of lower tax) for consumption, use or supply participating province. The self-assessment is based upon the proportion of use in each particular participating province. Again, there are some exceptions to this requirement:
- You are a registrant and the taxable supply is to be used at least 90% in your commercial activities;
- Certain transportation and telecommunication services;
- Legal services;
- Service is for goods removed from participating province as soon as service has been performed.
To report the self assessed HST, if you are registered this should be included on line 405 of your GST/HST return, for which you maybe entitled to claim an ITC. If you are not registered, you will have to self assess and report using Form GST489, Return for Self-Assessment of the Provincial Part of HST.
If you are in the opposite situation where you are importing goods, services or IPP from a participating province into a non-participating province or participating province with lower HST you may be eligible for a rebate of the provincial portion of the HST. This can be applied for on Form GST495 Rebate Application for Provincial Part of HST.
If you feel that you may be required to self assess HST or are entitled to a rebate due to taxable supplies moving between provinces, please feel free to contact us so that we may assist you with determining if this requirement applies to your situation and assist in calculating the amount of tax or rebate due.