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Countdown to the HST

Countdown to the HST. Hosted by the Certified General Accountants Association of BC. T. Charlotte Hoggard, CGA. HST Transition. BC HST Transitional Dates. Point of Sale Rebates. Public Service Sector Rebates. PST to HST Transition. Point 1 Point 2 Point 3 Point 4.

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Countdown to the HST

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  1. Countdown to the HST Hosted by the Certified General Accountants Association of BC

  2. T. Charlotte Hoggard, CGA

  3. HST Transition

  4. BC HST Transitional Dates

  5. Point of Sale Rebates

  6. Public Service Sector Rebates

  7. PST to HST Transition • Point 1 • Point 2 • Point 3 • Point 4

  8. Special Transition Issues • Continuous supplies • Budget purchase arrangements • Direct sellers using alternate collection • Combined supplies

  9. Candace Nancke, CGA

  10. HST Real Estate Transitional Rules

  11. Overview • Grandparented sales can be assigned in many situations, but not all • Builder disclosure agreements after Nov. 1, 2009 and before July 1, 2010 – be careful • Rental housing, owner built homes, resellers – rules are close but variations – be careful

  12. Overview – Continued • Some housing types do not qualify for grandparenting • Grandparenting does not apply to all purchasers

  13. HST/REBATE Quick Reference Table

  14. HST/REBATE Quick Reference Table

  15. BC New Housing Rebate • Unlike GST rebate, it is not reduced • Will be administered by CRA, similar to GST rebate • Builders will have the option of providing the rebate at the time of sale • A rental rebate has been proposed

  16. HST/REBATE Quick Reference Table

  17. Transitional Tax Adjustment • Paid by builder • Based on % of completion at July 1, 2010 – documentation will be important

  18. HST/REBATE Quick Reference Table

  19. Transitional New Housing Rebate • Rebates for single unit homes can be claimed by builder or purchaser • Rebates for residential condominiums must be claimed by builder • Will be administered by CRA

  20. Transitional New Housing Rebate – Continued • Builder will require clearance certificate from the Province to claim • Purchaser will require certificate of percentage of completion from builder (as at July 1, 2010)

  21. HST/REBATE Quick Reference Table

  22. John Pankratz, FCGA

  23. HST Thresholds

  24. Small Supplier Threshold • The $30,000 small supplier threshold that currently exists under current GST provisions will continue • Businesses with taxable supplies under the threshold amount can “voluntarily register”

  25. Recapture of Input Tax Credits (RITC) – Large Business Threshold • Affects “large businesses” making taxable supplies more that $10 million annually and certain financial institutions • Based on taxable supplies made in the last fiscal year • Restricts Input Tax Credit claim on the provincial portion of HST paid on certain expenditures (BCVAT)

  26. Property/Services Subject to RITC Specified road vehicles • Motor vehicle licensed for use on public roadways with weight less than 3,000 kg • Applies to parts and services in respect to specified road vehicles • Does not apply to routine repairs or maintenance of a specified road vehicle

  27. Property/Services Subject to RITC (cont.) Specified energy • Generally includes electricity, gas, fuel and steam • Does not apply to energy used by producers used directly in the production process and farmers • Does not apply to convention use • Optional “production proxy” method based on North American Industry Classification System (96%/87%/70%)

  28. Property/Services Subject to RITC (cont.) Specified Telecommunication Services • Generally applies to telephone, television, fax/email, audio and computer link-ups • Does not apply to internet access services, web-hosting services, toll-free telephone services or convention use purposes

  29. Property/Services Subject to RITC (cont.) Specified Meals and Entertainment • Applies to food, beverages and entertainment that are subject to the existing 50% ITC restriction under the ETA • Does not apply to “re-supply” situations, events where all employees from a location are invited, or expenses included in an employees income as taxable benefits

  30. RITC Reporting • Large businesses will be required to report “Gross ITCs” and RITC in separate input fields on future GST/HST returns • Option to use Estimation/Installment/Reconciliation approach to reporting RITC amounts

  31. RITC Phase Out RITC system will apply as follows: • 100% - July 1/10 to June 30/15 • 75% - July 1/15 to June 30/16 • 50% - July 1/16 to June 30/17 • 25% - July 1/17 to June 30/18 • 0% after July 1/18

  32. Other HST Thresholds • Electronic filing of GST/HST returns - $1.5 M • BC HST New Housing Rebate (7% - 2% x purchase price) maximum $525,000 (max. rebate $26,140)

  33. Questions?

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