Services and intangible personal property brought into a participating province
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Services and intangible personal property brought into a participating province
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Services
You pay GST when you receive a supply of a service that is made in a non-participating province. If you are a resident of a participating province and you acquire a service in a non-participating province for consumption, use or supply more than 10% in the participating provinces, you will have to self-assess the provincial part of the HST.
The same rule applies for a supply of a service that is made in a participating province where 10% or more of the service will be used, consumed, or supplied in participating provinces for which the rate of HST is higher.
Note
You do not have to self-assess the provincial part of the HST if you are a registrant and the service is consumed, used, or supplied at least 90% in your commercial activities or on certain transportation and telecommunication services, legal services, or where the service is for goods that are removed from the participating province as soon as the service has been performed.
IPP
If you are a resident in a participating province and you receive a supply of IPP (such as franchise rights) that is made in a non-participating province that you acquired for use, consumption, or supply 10% or more in the participating province, you have to self-assess the provincial part of the HST.
The same rule applies for a supply of IPP that is made in a participating province that you acquired for use, consumption, or supply 10% or more in participating provinces for which the rate of HST is higher.
Note
You do not have to self-assess the provincial part of the HST if you are a registrant and the IPP is used, consumed or supplied 90% or more in your commercial activities. You also do not have to self-assess the provincial part of the HST on certain supplies of IPP including IPP supplied by way of certain leases and licences and in certain instances where the person previously paid tax on the IPP.
Self-assessing for services and IPP
The amount of tax to be self-ssessed is determined by the formula:
A × B × C
A is:
- the provincial part of the HST (10% in New Brunswick, 10% in Newfoundland and Labrador, 8% in Ontario, 10% in Prince Edward Island, or 10% in Nova Scotia) in the participating province where consumption, use or supply is to occur, where a supply of a service or IPP was originally made in a non-participating province, or
- for a supply of a service or IPP that was made in a participating province that is for consumption, use or supply in a participating province for which the rate of HST is higher the difference between the rate of HST in the province of acquisition and the rate of the other province;
B is the value for the service or IPP that is paid or payable at that time; and
C is the percentage that you consume, use, or supply the service or IPP in the participating province for which you are making the calculation.
Example
You are a registrant who lives in Nova Scotia. You operate two retail stores, one in Ontario and one in Nova Scotia. You make both taxable and exempt supplies from your stores. In October 2016, you acquire accounting services from Help Accounting Ltd., located in Alberta, and the accounting firm determines that the place of supply is Ontario. The yearly fee charged for the service is $5,000 + 13% HST (the HST rate for Ontario).
Sixty percent of the service relates to your Nova Scotia store and the 40% to your store in Ontario. Using the formula for self-assessment, you would be required to self-assess $60.
A × B × C
where:
A is 2% (% difference of provincial part of HST between Nova Scotia and Ontario);
B is $5,000;
C is 60% use in Nova Scotia by the registrant. 1% × $5,000 × 60% = $30
You generally can claim an ITC for the tax that you self-assessed to the extent that the services were consumed, used, or supplied in your commercial activities.
How to self-assess
The tax is payable when the payment for the service or IPP is paid or becomes due. If you are a registrant, enter the amount on line 405 of your GST/HST return. You can also claim an ITC for the tax you self assessed on these services and IPP to the extent that they are for consumption, use, or supply in your commercial activities.
If you are not registered for GST/HST and have to self-assess the part of HST, use Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).
- Date modified:
- 2016-09-30