Harmonized Sales Tax (HST) FAQ
The Ontario government implemented the Harmonized Sales Tax (HST) on July 1, 2010. The HST is a combination of Provincial Sales Tax (PST) and the Federal Goods and Services Taxes (GST). PST will no longer be applied after the HST is introduced. The GST will be applied and collected as part of the HST.
What is the HST?
The HST is a combination of Provincial Sales Tax (PST) and the Federal Goods and Services Taxes (GST).
Why do I see PST, GST and HST charges on my bill?
Due to the timing of the delivery of the services and the timing of our bill delivery some customers may see PST, GST and HST charges during the transition.
Why am I being charged HST before July 1, 2010?
Starting May 1, 2010, you may see HST charges on your bill for services that you will be using after July 1, 2010. For example, if you pre-pay your services for 1 year in advance, PST and GST will be applied on services delivered before July 1, 2010 and HST will be applied to services delivered after July 1, 2010.
Will I be paying more in taxes?
With the new HST system effective July 1, 2010, all Execulink Telecom services will be subject to HST. Some customers may see an increase in their total Sales Tax Payable; however, HST and GST are subject to a rebate process as part of your filing with the Federal Government.
Will I be paying HST on my Internet Service?
Currently some of our services, such as Internet services in Ontario are exempt from PST. With HST, Internet services in Ontario will be considered a taxable service and as a result will be subject to HST. In BC, the rules are more open-ended and allow for refunds/rebates to be provided to the customer after the October 31, 2010 cut-off date. Any Provincial Sales Tax (BC PST) necessary refunds/rebates can continue to be processed after this date.
I currently qualify for GST exemption, will this still apply?
Customers who qualify for the GST exemption today under the Excise Tax Act will qualify for an HST exemption after July 1, 2010 as the HSTs fall under the jurisdiction of the Excise Tax Act.
I currently qualify for PST exemption, will this still apply?
With the new HST system, PST exemptions that are in place currently will no longer apply after July 1, 2010. Although exemptions from PST can be due to multiple factors, here are a few examples that will no longer apply when HST comes into effect:
- Customers that are PST exempt because the possess and Indian Status Card
- Customers purchasing the goods/service for the purpose of resale, such as our Wholesale Resellers because in the HST system, there are no resale exemptions
Will my bill be changing?
The summary and detailed portion of your bill will change to identify the HST by province.
Execulink Telecom must calculate tax on a per line/item basis on the invoice as we need to determine the place of supply of each item, potentially resulting in multiple jurisdictional taxes on one invoice. For example, an Ontario customer may use a calling card in Quebec to call a Quebec phone number, as a result we would need to charge QST, not HST (Ontario)
As a result of the per line item calculation the tax calculation as summed at the bottom of the invoice is correct, however the detail is not provided to make invoice presentation more readable. If a customer took each line item, applied the appropriate taxes (to two decimal places) and summed the taxes it would match what is on the bottom. Mathematically you may not be able to take the total of services times the tax rate and get the total taxes to match an Execulink Telecom invoice due to individual line calculations because of our requirement to do place of supply tax calculations per item.
What are some of the other major changes with this new tax?
The other important areas to note are specifically around the “transition” period of moving from the existing tax system to the new one, there are key dates and processes to be aware of. The “transition guidelines” are posted on the respective websites for the Ontario and British Columbia provincial governments.
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