Time to transition from HST

With the transition from HST to PST completed Monday, more than 100,000 businesses need to register to make the transition.

With the transition from HST to PST completed Monday, the B.C. government says more than 100,000 businesses will need to register to make the transition.

To help ease the transition, the government has provided online instructions at bgov.bc.ca/etaxbc/register.

The PST and GST tax rates will be five and seven per cent, respectively.

“The new PST is being implemented under a more modern and streamlined Provincial Sales Tax Act that is, for technical taxation legislation, clearer, easier to understand and comply with, easier to administer, and which better reflects modern technology and business practices,” the government website states.

Canada Revenue Agency has provided a question and answer catalogue which you can download at www.cra-arc.gc.ca/E/pub/gi/notice270/notice270-e.pdf.

The following are a few of the questions answered in the catalogue:

Q: I invoice a customer before April 1. The customer pays the invoice on or after April 1. What rate of tax do I charge on this sale?

A: Since the GST/HST became payable on the date of the invoice and this is before April 1, you would charge the customer the 12 per cent HST.

Q: What rate of tax would apply to a magazine subscription renewal if it is accepted and paid by the customer before April 1 but the magazines would be provided to the customer on or after April 1?

A: If the magazine subscription renewal payment is made before April 1, or becomes due before April 1, the amount would be subject to 12 per cent HST, even though the magazines would be provided on or after April 1.

Q: How do I calculate the new rate of tax on a tax-included invoice?
A: The invoice or receipt should show the rate of GST/HST that has been charged. The amount of the GST on a tax-included amount of consideration is 5/105 of the amount. To calculate the amount of consideration payable on the invoice excluding the GST, multiply the tax-included amount by 100/105.

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