As part of the comprehensive tax reforms underway in Ontario, the provincial sales tax is being harmonized with the federal goods and services tax (GST), which means businesses need to be aware of how the transition to this new “Harmonized Sales Tax” will affect them.
Although businesses will benefit from harmonization, most businesses will have to adjust their practices before and after the sales tax changes take effect on July 1, 2010. Such steps include updated customer invoices to reflect the harmonized sales tax (HST).
As with current practice, GST/HST registered businesses must continue to disclose to customers if they are paying the HST. Fortunately, the disclosure and invoicing requirements for the HST in Ontario will follow the existing GST requirements. As such, as in other Canadian provinces with a harmonized sales tax, invoices will generally show the total HST amount or the total HST rate.
For more information on the OCC’s tax reform efforts on behalf of members, please contact Derek Picard, Senior Policy Analyst, 416-482-5222 or derek.picard@occ.on.ca.
