Group benefits GST/HST update for British Columbia and Prince Edward Island

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On April 1, 2013, British Columbia (BC) and Prince Edward Island (PEI) are implementing changes to the GST/HST.

BRITISH COLUMBIA

The tax changes being implemented in BC are as follows:

  • Elimination of the current harmonized sales tax (HST) at a rate of 12%.
  • Return to a provincial sales tax (PST as 7%) and federal goods and service tax
    (GST at 5%) system. 

What this means

Contracts that are currently charged the BC HST will be subject to the GST only.  The BC transition rules to change the tax system indicate that invoice/statements prepared on or after April 1, 2013 will be subject to the GST only.

PRINCE EDWARD ISLAND

The tax changes being implemented in PEI are as follows:

  • Introduction of harmonized sales tax (HST) at a rate of 14%, where the provincial portion is 9% and the GST portion is 5%.

What this means

Contracts that are currently charged GST and the governing law provision in the contract is PEI, will be subject to HST at 14%.  The PEI transition rules to change the tax system indicate that invoice/statements prepared for services rendered on or after April 1, 2013 will be subject to the HST.

What services do these changes affect?

Services that are currently subject to GST or HST include the following examples:

  • Administrative services only (ASO) contracts without stop loss insurance
  • HealthyRETURNS
  • Salary Continuance Services and Absence Analytics and Support
  • RightDirections
  • Health spending account (when it is the only ASO arrangement)

Reminder: Services currently exempt from GST or HST will continue to be exempt. Examples of these exempt financial services include:

  • Group insurance premiums
  • ASO with stop loss insurance

A reminder about these changes will be included with the first invoice/statement you receive that shows changes in effect.

Questions?

Contact your Sun Life Financial group benefits representative.