The federal finance ministry has released proposed transitional rules for eliminating the Harmonized Sales Tax (HST) in British Columbia by March 31, 2013.
As a result of a provincial referendum last summer, the HST will be replaced by the federal Goods and Services Tax (GST) and the Provincial Sales Tax (PST) on April 1, 2013.
The transitional rules lay out how and when the HST would stop applying to business transactions, including employer-provided taxable benefits that straddle the elimination date. The proposed rules would affect the way in which employers calculate the amount of HST that they need to remit to the Canada Revenue Agency on taxable benefits they provide to employees.
For taxable benefits other than automobile operating cost benefits, the calculation rate currently used for employees who report to work in B.C. is 11 per cent. With the elimination of the HST, the transitional rules propose that for 2013, the rate would be 5.75 per cent. Beginning in 2014, the rate would be four per cent as it is for other provinces where the GST applies.
For automobile operating expense benefits, the rate currently used in B.C. is five per cent. For 2013, the rate would be 3.5 per cent. Beginning in 2014, it would be three per cent, as it is in other provinces where the GST applies.
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