Important when we are talking with our clients to ensure they are aware of the various rates BC 12%AB 5%SK 5% + 5% PSTMB 5% + 8 % PSTON 13%QC 5% + 8.5 % QSTNS 15%NB 13%PEI 5% + 10% PSTNFLD 13%Territories 5%
Talk about issues The rules to determine the rate of tax are complicated and vary depending on whether you are selling services or goods. The following examples will illustrate how the rules apply to sales of wine.
Vendor would be required to charge only 5% GST, if registered for PST they would also charge PST, Purchaser would have a requirement to self assess PST unless the goods are being purchased for resale
In this example the vendor is required to charge HST as the goods are delivered in BC
The winery will be delivering the wine to Saskatoon and has arranged for the shipping. Therefore the winery only charges the 5% GST. There will be liquor taxes that the purchaser will have to self assess.
In this case we would have to charge GST & PST as the business is located in SK.
Associated for GST/HST purposes includes an IndividualThere have been many phone reviews of this situation. Important to provide CRA with the correct information
Review of Enhanced RebatesNew Housing or Rental Rebates - eligible to recover up to 71.43 % of the provincial part of the HST max $42,500Also Rebate for vacation homes – outside of Vancouver and the Capital - this is the same amounts but applied for directly with the province – max 6 months to request.
Direct Shipping and GST/HST
Direct Shipping and GST/HST July 12, 2012
GST / HST BasicsTaxable, Exempt and Zero Rated• What is the difference?• What are the implications?• When do you need to register?
HST Review – Two Years Later• Rates across the country - what are they• If you are registered for GST you are registered for HST• HST is applicable to everything GST is applicable to• Ability to claim ITC’s if you are carrying on taxable activities
GST/HST & PST Rates• BC 12% HST• AB 5% GST• SK 5% GST and 5% PST• MB 5% GST and 7% PST• ON 13% HST• QC 5% GST and 9.5% QST• PEI 5% GST and 10% PST• NS 15% HST• NB 13% HST• NFLD 13% HST• Territories 5% GST
Direct Shipping Rules• What are you selling?• Where are you selling?
Place of Supply - Examples• Wine – Winery is in BC – Trucking Co. from BC delivers case of wine to Moosejaw – Terms of contract are FOB Penticton – Winery arranges for delivery and adds freight charge to invoice – What rate of tax is applicable? 12% or 5%? – Is there any PST applicable?
Examples• Wine and T-shirts ( 10 cases of each) – Winery is located in Oliver – Customer is located in Markham, ON – Terms are FOB Oliver – Customer sends their own truck to pick up the goods – What is the rate of tax applicable?
Examples – Online Sales• Mr. Orchard wants to order some limited edition wine from his favourite winery in Naramata.• Mr. Orchard lives in Calgary and completes the transaction online from his home in Calgary.• Mr. Orchard is coming to the Okanagan so has made arrangements to pick up the wine on his next trip here.• What rate of tax is payable?
Shipping• Mr. and Mrs. Smith are visiting Kelowna for a summer vacation. They decide to order three cases of wine from their favorite winery. As they are flying they arrange with the winery to have the winery ship the wine back to their home in Saskatoon after they finish their holiday.• What rate of tax is applicable?
What Happens After April 1, 2013We will go back to the GST at 5% and PST at 7%, (Liquor tax at 10%)Legislation was released May 2012Regulations – with all the details will be released in the Fall of 2012
GST & PST• Invoices issued after April 1, 2013 will be subject to GST and PST if applicable• Example:• Your accountant is working on your year end in March of 2013 and everything is finished April 2013. The invoice for the work is issued April 18, 2013. The invoice will just have GST at 5%
GST & PST examplesPurchase of wine making equipment. Contract is negotiated in February of 2013. The equipment is shipped and delivered on May 1, 2013. Once the equipment is delivered the supplier issues an invoice.What rate of tax is applicable? 12% HST, 5% GST, 7% PST or a combination?
Final Year of HST in BC• Biggest impact is for residential construction• Enhanced Rebates available for Residential projects• Penalties applicable to builders who do not provide proper disclosure
What do You Need to Do Now?• Review your computer systems and other processes• Review ongoing long term projects• Review Inter-corporate Transactions• Call MNP
We Can Help Any Questions?Heather Weber, CGA 250-979-2575