March 27, 1997
(Finance)
Minister advises businesses on
transition to harmonized sales tax system
The Parliament of Canada has passed federal
legislation to establish the harmonized sales tax (HST) in Newfoundland and
Labrador, Nova Scotia and New Brunswick on April 1, 1997. Under the new
system which will be administered by Revenue Canada, sales taxes in
Newfoundland and Labrador will reduce from almost 20 per cent currently on
most goods, to 15 per cent.
Provincial Finance Minister Paul Dicks
announced today that in keeping with the transition to the harmonized tax
system, provincial sales tax offices in Clarenville and Grand Falls-Windsor
will close effective April 25, 1997. Provincial offices will remain in St.
John's and Corner Brook. Revenue Canada will establish a presence in
Clarenville, Grand Falls-Windsor and Corner Brook. Details will be available
at a later date.
The minister also advises that provincial
Retail Sales Tax (RST) Seller Numbers, a six-digit number which gives
businesses the authority to collect RST, will no longer be valid effective
12:00 a.m. April 1, 1997. Businesses requiring more information on how to
register for the new HST should telephone Revenue Canada at 1-800-959-8286.
However, all businesses registered for the GST will automatically be
registered for the HST.
It is anticipated that the Department of
Finance will require approximately four years to complete the required RST
audits. Collection efforts will continue until all RST has been collected.
During this period, all penalties and interest will apply.
Individuals requiring more information on
provincial tax matters should contact the St. John's office at
1-877-729-1695, or write the Department of Finance at P.O. Box 8720, St. John's,
NF, A1B 4K1.
Contact: Karen McCarthy, Director of
Communications, (709) 729- 0110.
_________________________
HST Highlights
for Businesses in Newfoundland and Labrador
WHAT'S NEW?
- The new harmonized sales tax (HST) will
have a single tax base, a single combined rate and a single
administration (Revenue Canada). Starting April 1, 1997, businesses
buying or selling taxable (other than zero-rated) goods or services in
Newfoundland and Labrador, Nova Scotia and New Brunswick will have to
pay or collect 15 per cent HST. Registered businesses outside the three
participating provinces that sell taxable (other than zero-rated) goods
and services in the three provinces, including any goods or supplies
shipped or mailed to the region, will also have to collect HST.
Registrants can claim input tax credits
for the seven per cent GST or 15 HST payable on purchases for their
commercial activities. Those who pay 15 per cent HST but are not
entitled to full input tax credits may be eligible for rebates.
Goods are considered to be sold in a
participating province if they are delivered or made available in that
province (including by common carrier, mail or courier). Special rules
apply to rented or leased supplies. Generally, a service is considered
to be provided in one of the three participating provinces if 90 per
cent or more of the service is performed in that province.
WHAT'S THE SAME?
- Under the HST, a number of things remain
the same:
- HST applied to the same base of goods and
services as GST.
- Goods and services that are exempt and
zero-rated goods under the GST will be exempt and zero-rated under the
HST.
- Businesses already registered for GST are
automatically registered for HST.
- As with GST, businesses with annual
revenues of $30,000 or less from taxable sales, generally do not have to
register for or collect HST.
- Requirements for remitting tax, filing
returns, and establishing fiscal and reporting periods stay the same
under the HST.
- Businesses do not have to report
separately for federal and provincial parts of HST.
- Businesses can generally use the current
GST returns to calculate the net amount of HST owing or to be refunded.
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