Canada: HST rate increase officially cancelled for Newfoundland and Labrador

Canada: HST rate increase officially cancelled

The new government of Newfoundland and Labrador officially confirmed that the rate of harmonized sales tax (HST) will remain at 13%, and that the proposed HST rate increase to 15% (originally planned for January 2016) has been cancelled.

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In a provincial bulletin released 14 December 2015, the province confirmed that the federal government agreed to its request to cancel the proposed increase and that the related transitional rules are no longer applicable.

Keeping the new HST rebate for municipalities

Newfoundland and Labrador also confirmed that the HST rate increase cancellation will not affect its new 25% public service body (PSB) rebate of the provincial component of the HST for municipalities, effective 1 January 2016. The bulletin: 

  • Reiterates the transitional rules related to this new PSB rebate (previously released in July 2015) 
  • Includes a related anti-avoidance rule
  • Provides details for municipalities on the streamlined accounting methods

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