HST rate in Newfoundland and Labrador to increase on July 1, 2016

Residents of Newfoundland and Labrador will see a rise in the provincial HST rate this Canada Day.

Effective July 1, 2016, the government is increasing the provincial portion of the HST from 8 percent to 10percent . The new HST rate of 15 percent is a combination of the 5 percent federal Goods and Services Tax (GST) combined with the 10 percent provincial portion.

The Department of Finance says under the transitional rules, suppliers would generally be required to charge the HST at the rate of 15 percent on any consideration that becomes due without having been paid, or is paid without having become due, on or after July 1, 2016 for taxable supplies of property or services. Under the Excise Tax Act (ETA), the consideration, or a part thereof, for a taxable supply generally becomes due on the earliest of:

• the day the supplier first issues an invoice in respect of the supply for that consideration or part thereof;
• the date of that invoice;
• the day the supplier would have, but for an undue delay, issued an invoice in respect of the supply for that consideration or part thereof; and
• the day the recipient of the supply is required to pay that consideration or part thereof to the supplier pursuant to a written agreement.

Special transitional rules would apply in respect of certain real property transactions.

More information can be found here.

As mentioned in a previous blog post, New Brunswick is also preparing for an increase in their provincial HST rate, also effective July 1, 2016.

The Government of Prince Edward Island is introducing a raise to the HST rate on October 1, 2016. We will update the blog with more information in the fall.

If you have questions about how this rate increase will affect you, or the application of GST/HST to the goods and services you supply to your customers, please contact us and we will be happy to assist.

This information is correct as of the date of posted. Rates are subject to change.