Canada’s sales tax rates chart must be changed again as Prince Edward Island increases its sales tax rate to 15% as at October 1, 2016. Canadian businesses and foreign businesses carrying on business in Canada must update their systems to reflect the new rate for PEI.
Canadian Sales Tax Rates Chart
As at January 1, 2016
|Province/Territory||Provincial Sales Tax||GST/HST Rate||GST Included in PST Tax Base||Combined Rate|
|Prince Edward Island||N/A||15%||Yes||15%|
The HST rate for Newfoundland/Labrador increased to 15% from 13% effective July 1, 2016.
The HST rate for New Brunswick increased to 15% from 13% effective July 1, 2016.
The HST rate for Prince Edward Island increased to 15% from 14% effective October 1, 2016.
The ITC recapture rate in Ontario decreased to 50% as of July 1, 2016.
Steps To Take
- Are you charging the correct amount of sales tax?
- Sales departments/accounts receivable departments that have programmed HST-included pricing will need to update the sales tax rates in their systems.
- Even companies that calculate sales tax separately will need to make sure that computer programs have been updated.
- Are you paying the correct amount of sales tax?
- Payroll departments will need to review invoices in the months following the sales tax increases to ensure that they are being charged the correct amount of sales tax.
- This means not paying the higher rate for property and services provided before July 1, 2016 and paying the higher rate, if applicable, after July 1, 2016.
- Are you claiming the correct amount of ITCs?
- The finance department will need to make sure that computerized programs that break out the amount of HST payable on invoices have been updated to reflect the higher HST rates.
- Are Ontario businesses not giving too much back?
- The ITC recapture rate in Ontario has decreased to 50% from 75%. This means the amount of ITCs that companies can claim may have increased for some large businesses.
- Have you updated your computerized records to reduce the recapture rate?