POS Reminder - 5% GST / 13% HST as of January 1, 2008

The GST rate will be reduced by one percentage point from 6% to 5%, effective January 1, 2008. To facilitate the transition to the lower rate, transitional rules for determining the GST rates applicable to transactions that straddle the January 1, 2008 implementation date have been enacted.

Effective January 1, 2008, the rate of the GST and the federal component of the HST will be reduced from 6% to 5%. The provincial component of the HST will remain at 8%. This means that the rate of HST will be reduced from 14% to 13%. Please note that the HST applies only to purchases made in or imported into New Brunswick, Nova Scotia, and Newfoundland and Labrador (the participating provinces) and the GST applies to supplies made in the rest of Canada.

For most purchases, the rate of tax will be determined by the date the GST/HST becomes payable or is paid. If GST/HST became payable or was paid in 2007, the old GST rate of 6%, or HST rate of 14%, applies. Otherwise, the reduced GST rate of 5%, or HST rate of 13%, applies if the tax became payable on or after January 1, 2008, or was paid on or after January 1, 2008 without having become payable before that day.

Read Full Text of Notice and access info sheets HERE