GST Rate Change - January 1, 2008
REDUCTION OF THE GST RATE TO 5%
The transition will occur as follows:
- if the GST becomes payable on or after January 1, 2008 without having been paid before that day, the GST is 5%
- if the GST is paid on or after January 1, 2008 without having become payable before that day, the GST is 5%
- if the GST becomes payable or is paid before January 1, 2008, the GST is 6%
The Canada Revenue Agency has provided a helpful series of questions and answers that explain the change using specific examples. Here is the link to that page on their website:
http://www.cra-arc.gc.ca/E/pub/gi/notice226/notice226-e.html
Some highlights of the transition to 5%:
For services provided prior to January 1 but not invoiced until after January 1, the GST rate will generally be 5% - that would include construction services, legal services, utilities etc. The GST included in lease payments will drop to 5% for payments due after January 1, 2008 The GST applicable on the sales of new or substantially renovated homes hinges on the timing of the sale agreement and the transfer of ownership and possession. In certain cases purchasers will be eligible for a "Transitional Rebate".
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