| British Columbia and Ontario implement HST beginning July 1, 2010 |
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(Toronto, June 30, 2010)… The Harmonized Sales Tax (HST) will be implemented in the provinces of Ontario (13%) and British Columbia (12%) effective July 1, 2010.
What is HST?
The HST is a combination of the federal (GST) and provincial (PST) taxes.
Is HST applied to imported commercial goods?
No. At time of import, commercial goods are not subject to HST and will remain taxable (where applicable) at the federal rate (GST portion) of 5%.
Is HST applied to Customs Brokerage Services?
Yes, if the services take place in Ontario (13%) or British Columbia (12%). Determining the applicable province/HST rate depends on the type of customs brokerage service (Release of Goods Services vs Post Entry Services):
Release of Goods Services:
Under the new Place of Supply (GST/HST) Regulations, a “customs brokerage service” means a service of arranging for the release of imported goods or of fulfilling, in respect of the importation, any requirement under the Customs Act or the Customs Tariff to account for the goods, to report, to provide information or to remit any amount.
HST on customs brokerage services, as ruled by the Canada Revenue Agency (CRA), is based upon the province in which the goods were physically located when they were customs cleared. For example, goods destined for Ontario that are customs cleared in the province of Alberta (non-HST province) will only attract the 5% GST on brokerage services. However, goods destined for Alberta that are customs cleared in Ontario will attract HST of 13% on brokerage services.
Post Entry Services:
A service supplied in relation to an objection, appeal, re-determination, re-appraisal, review, refund, abatement, remission or drawback, or in relation to a request for any of the foregoing, however, is subject to the above general place of supply rules for services to determine the province in which the supply is made. For these services, the province in which the service is conducted will determine the rate of HST applied. For example, the service fee on a refund claim prepared in Ontario would attract HST at 13%.
When is the HST applicable in Ontario and British Columbia?
HST will apply to customs brokerage service fees for shipments released on or after July 1, 2010. Post entry services invoiced on or after July 1, 2010 will also attract the HST.
For more information, please contact Brian Rowe, General Manager – Customs Consulting Services (905) 882-4880.
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