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Harmonized Sales Tax

The Harmonized Sales Tax (HST) is a value added tax that combines the provincial sales tax with the federal Goods and Services Tax (GST), to create a single, federally administered HST.

Most goods and services supplied in Newfoundland and Labrador are subject to the Harmonized Sales Tax (HST). Newfoundland and Labrador has been an HST participating province since July 1, 1997.

The HST operates the same way as the Goods and Services Tax (GST), which is in place across Canada and is applied to the same types of goods and services.

Effective July 1, 2016, the Government of Newfoundland and Labrador will increase the provincial portion of the HST from 8% to 10%. The new HST rate of 15% is a combination of the 5% federal Goods and Services Tax (GST) combined with the 10% provincial portion.

While the HST rate will increase by 2 percentage points, the basic features of the HST will not change.

Transitional rules are required to set out which tax rate (the existing HST rate of 13% or the new rate of 15%) would apply in respect of certain transactions that straddle the July 1, 2016 implementation date.

What gives the province the authority to change the HST rate?

The HST is levied by the Government of Canada, pursuant to the federal Excise Tax Act.

Participating provinces have entered into a federal-provincial agreement called the Comprehensive Integrated Tax Coordination Agreement (CITCA) PDF.

The agreement allows for the province to change the tax rate applied to the provincial portion of the tax once in any twelve-month period.

CITCA agreements provide for the GST and provincial sales tax to use the same tax base and include a formula for the sharing of revenue between the federal government and HST participating provinces.

Administration of the HST

Administration of the HST, including the administration of the HST transitional rules, is performed by the Canada Revenue Agency.

The Canada Revenue Agency collects HST, processes applications, and makes rulings and interpretations on the application of HST policy. All individuals and businesses must deal directly with the CRA for any of these or other administrative issues.

For more information please contact the Canada Revenue Agency opens new window.

Disclaimer: This is intended to provide information respecting the Harmonized Sales Tax (HST) in the Province of Newfoundland and Labrador under the Excise Tax Act (Canada). This should not be regarded as a replacement of the laws, regulations or administrative documents to which it refers.

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