Canada: Transitional rules, HST rate increase in Prince Edward Island

Canada: Transitional rules, HST rate increase in P.E.I.

Transitional rules have been released by Prince Edward Island for the upcoming increase in the rate of the harmonized sales tax (HST) to 15% (from 14%) effective 1 October 2016. Certain businesses—especially builders—are affected by these rules starting 16 June 2016.

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For many supplies, the transitional rules generally require suppliers to collect 15% HST on the consideration that becomes due without having been paid, or is paid without having become due, on or after 1 October 2016. For GST/HST purposes, the consideration for a supply generally becomes due on the earliest of:

  • The day the supplier issues an invoice for the supply
  • The date on the invoice
  • The day the supplier would have, but for an undue delay, issued an invoice for the supply
  • The day the purchaser is required to pay that consideration pursuant to a written agreement

The province also notes other specific transitional rules that apply for certain transactions, including real property transactions.


Read a June 2016 report prepared by the KPMG member firm in Canada: P.E.I. HST Increase — Transitional Rules Take Effect

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