Sales Taxes -> GST/HST -> Place of Supply Rules -> Self-assessment of the provincial component of the HST
Goods & Services Brought Into a Participating Province
A participating province is a province which charges HST.
Under the current self-assessment rules, if you purchase goods or services in a non-participating province (one in which only GST is charged), but you use, consume or supply them within a participating province, you are required to self-assess the provincial portion of the HST. This does not apply if you would be getting an input tax credit for the GST/HST.
Due to the fact that the provincial component of the HST varies between provinces, the self-assessment rules are being expanded. Generally, the existing exemptions from the requirement to self-assess would continue under the new rules.
Under the new rules, if the amount of tax to be self-assessed is less than $25 in a calendar month, there is no requirement to self-assess.
Tangible Personal Property Brought Into a Participating Province
The expanded self-assessment rule also applies if goods are purchased in a participating province, and are then brought into another participating province where the provincial component of the HST is higher. The amount of tax to be self-assessed would be calculated by taking the difference in the provincial components, and multiplying by the lesser of
Example: An Ontario resident purchases a wedding dress in BC for $3,000, paying 12% HST, or $360. Ontario's HST rate is 13%. On return to Ontario, the Ontario resident would be required to self-assess tax on the $3,000 at the rate of 1% x $3,000, or $30. If the wedding dress had been purchased in Alberta, which charges 5% GST and no provincial sales tax, the self-assessed tax amount would be 8% x $3,000, or $240.
Services and Intangible Personal Property (IPP)
The expanded self-assessment rule for services and intangible personal property (IPP) would also apply when IPP or a service is acquired in a province for consumption, use or supply "significantly" (generally, 10% or more) in participating provinces for which the provincial component of the HST is higher than in the province of acquisition.
The rules on self-assessment can be found in the Canada Revenue Agency GST/HST Technical Information Bulletin B-079, Self-Assessment of the HST on Supplies Brought Into a Participating Province.
Revised: January 31, 2021
Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved. See Reproduction of information from TaxTips.ca