Ontario Sales Tax Harmonization with the Federal Goods and Services Tax
On March 26, 2009, the Ontario Minister of Finance announced, as part of the annual Budget, that the Ontario Retail Sales Tax (ORST) would be eliminated, effective July 1, 2010, in favour of an additional 8% provincial component to the existing federal Goods and Services Tax (GST). This new tax is referred to as the Harmonized Sales Tax (HST) and will apply at the rate of 13% on supplies of taxable goods and services made in the province of Ontario in approximately 15 months time.
This publication will provide an overview as to the application of the new HST in Ontario. Please keep in mind that at the time of writing this publication, many questions remain to be answered as to the exact rules that will be implemented. It is entirely possible, and in fact, quite likely, that changes will be made to the application of the HST prior to its implementation date in July of 2010. As a result, readers are cautioned to seek out updates to this information as the implementation date draws near.
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