A reminder that registrants are now required to charge the 8% Ontario portion of HST on invoices and payments received for goods or services that are to be delivered after June 30th, 2010.

The Ontario HST must be disclosed on the invoice and is to be remitted with the HST return for the period that includes July 1, 2010.  It is important to note that 13% HST is not being charged, rather the 5% GST and 8% Ontario portion HST. 

For example, a landscaper is a monthly filer for GST and collects a $1,000 payment plus taxes in May for work to be performed entirely in August.  The vendor must collect both GST and the Ontario portion of HST on the amount.  The 5% GST ($50) is remitted with the May GST return (due by the end of June).  The Ontario portion of HST ($80) is remitted with the July HST return (due by the end of August). 

GST registrants may have to self assess the Ontario portion of HST on amounts paid before May 1, 2010 (but after Oct 14, 2009) for the part of the service delivered after July 1^st, 2010.

For example, a GST registrant business in Ontario paid $5,000 plus tax in April for landscaping services (mowing, trimming and flowerbeds maintenance) from May 1 to September 30^th (5 months).  The payment was $5,250 ($5,000 + $250 GST).  Since the contract extends for three months after July 1^st, the registrant will have to self assess on their HST return that includes July 1^st, the Ontario portion of HST (8% and 3/5 of $5,000 = $240).  If the registrant is entitled to input tax credits, the ITC can also be claimed that period.