This article are provided for information purposes only, and are not intended as legal advice.

Business strategies, are you ready for HST?

March 3rd, 2010

You operate your own business and you know that the tax changes that happen on July 1 do not impact you for several months, have you started to think about how you will be able to deal with the transition, when does it affect you.  Many people may not realize that things you do now could have an impact on whether you charge GST or HST in Ontario and British Columbia.


The law has passed but the details of the legislation are found in the regulations but they have not all been published yet therefore there is still some uncertainty of all the rules and regulations.  Effective may 1, 2010, HST will apply on the consideration for certain property and services provided by businesses on or after July 1, 2010.  On July 1, 2010, HST is implemented in Ontario.


Businesses have to consider the transitional rules, that will be the most complicated, hopefully the transition will be quick but you need to consider how you handle a transaction. According to CRA, GST/HST is affected by when the consideration becomes due, and when consideration is paid without having become due.


Generally, consideration becomes due on the earliest of the date of the invoice, the day the supplier first issues the invoice, if undue delay has occurred before issuing the invoice, the day the supplier would have the issued the invoice, and the day the recipient is required to pay under a written agreement.


It gets complicated when a person has purchased a product before July 1 and exchanged it for something after July 1.   If you go to a retail store, the sales slip will state, goods returns and a different product purchased.  The original transaction may have included PST and GST, the purchase of the new product may result in HST even though the goods may have been the same value. 


If you have a cash register, can it handles these issues?  Do you need to make changes to your hardware and software, do you need to hire an accountant to help you implement the changes and determine how the new rules affect your business?  Waiting until July 1 will not allow you time to plan.

Filed under: Business strategies — Gary Landa @ 1:47 pm

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