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Latest Wave of Indirect Tax Changes 

Canadian Tax Adviser

 

September 27, 2012

 

In the latest wave of Indirect Tax changes on September 26, 2012, the federal government released more than 30 pages of new GST/HST regulations. While the new regulations relate mostly to the upcoming transition by the province of British Columbia from the HST back to the GST on April 1, 2013, they also amend other GST/HST regulations. The new regulations include various coming into force dates which should be carefully reviewed.

The new regulations confirm some previously announced transitional rules related to B.C.’s transition to the GST.

 

B.C. HST measures - Get ready to adjust your systems
The new regulations address the transition from HST to GST in B.C. for many different business transactions and circumstances, including:

 

  • The general rules for the transition from HST to GST (e.g., when B.C. HST applies or ceases to apply to a supply)
  • The elimination of the B.C. HST input tax credit recapture requirements
  • The elimination of the partial B.C. HST rebates for qualifying public service entities
  • B.C.’s specific rates for the streamlined accounting method and special quick method for qualifying public service bodies
  • The elimination of the point-of-sale rebates in B.C.
  • The factors for calculating GST/HST for employee and shareholder benefits for 2013
  • The calculations for rebates for qualifying employees and partners
  • The rules for performance bonds and related qualifying "contract payments" that become due before April 1, 2013 or after March 31, 2013
  • The calculation of tax on imports into the province
  • The calculations under the GST/HST pension plan rules of the tax payable by participating employers and the rebates for pension entities for claim periods that include April 1, 2013
  • The calculations after February 16, 2012 of the "basic tax content" for real property or tangible personal property situated in B.C.
  • The calculations after February 16, 2012 of the "basic tax content" of property of selected listed financial institutions
  • The calculations of input tax credits for manufacturers' rebates.

 

The new regulations also include anti-avoidance rules related to the transition from HST to GST in B.C.

 

Other GST/HST measures
The new regulations confirm other previously announced GST/HST related measures including the new GST/HST streamlined accounting thresholds announced in the 2012 federal budget and the new place of supply rules for specified motor vehicles and airport screening services.

 

KPMG observation
Registrants should carefully review these new regulations and as well as the relevant coming into force provisions as they prepare their systems and processes for the upcoming transition from the HST system to the GST in B.C. The regulations related to the new PST are expected later in the fall.

 

For more information, contact your KPMG adviser.

 

 

 

 

Information is current to September 27, 2012. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG’s National Tax Centre at 416.777.8500.

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