What is the Harmonized Sales Tax (HST)?
On October 18th, 1996, the Government of New Brunswick and the Government of Canada signed the Comprehensive Integrated Tax Coordination Agreement (CITCA), which led to the implementation of the Harmonized Sales Tax. Effective April 1, 1997, New Brunswick harmonized its Provincial Sales Tax with the federal Goods and Services Tax to create a harmonized sales tax (HST). The HST is a value-added tax and is composed of the federal GST ( 5% ) and a provincial component of 8%. The HST is applied to the same base of goods and services as the federal GST base. This means the 13% HST is applied to all goods and services taxable under the federal Excise Tax Act. Other participating provinces include Newfoundland and Labrador, Ontario, British Columbia and Nova Scotia. The HST is administered by the federal government through the Canada Revenue Agency (CRA). As a result, registrants (businesses or individuals registered to collect the HST on taxable sales) collect one sales tax and remit and rep
Starting July 1, 2010, the provincial sales taxes in Ontario and British Columbia would be replaced by a value-added tax structure and combined with the federal Goods and Services Tax (GST) to create a single, federally administered Harmonized Sales Tax (HST). The HST would be applied on most supplies of property and services made in those provinces at a blended rate of 13% in Ontario and 12% in British Columbia. With some exceptions, the HST would apply to the same base of property and services as the GST.2. Who would pay the HST? Almost everyone would have to pay the HST on purchases of taxable property and services (other than zero-rated supplies) supplied in those provinces. Businesses can recover the GST or the HST by claiming input tax credits (ITCs) for the tax that they pay or owe on purchases and expenses used in their commercial activities. Usually, commercial activities are those undertaken to provide taxable (including zero-rated) property and services. Only customers with
