With the implementation of the Harmonized Sales Tax (HST), effective July 1, 2010, some registrants will be required to file their GST/HST returns electronically.
This will differ from the current paper filing system that most registrants use and will affect registrants currently filing their returns quarterly or monthly.
For reporting periods ending after June 30, 2010, GST/HST registrants will be required to file their returns electronically if they:
- have annual taxable supplies (on an associated group basis) exceeding $1.5 million (charities excepted);
- are referred to as “large businesses” and are required to recapture input tax credits (ITCs) for the provincial portion of the HST on certain expense categories; or
- are builders that must report:
– transitional tax adjustments;
– transitional new housing rebates (provincial portion of HST);
– sales of grandparented housing (i.e., ownership and possession transferred to purchaser after June 30, 2010, under written agreements of purchase and sale entered into before June 19, 2009) if the purchaser is not entitled to claim GST/HST new housing or new residential rental property rebates; or
– housing sales that are subject to HST, if the builder purchased housing on a grandparented basis.
The recapture of ITCs and the transitional taxes applicable to builders will be reported in separate information fields on a schedule that accompanies the GST/HST return. For registrants affected by the ITC restrictions, the restricted or recaptured ITCs will be calculated as:
Failure to file GST/HST returns electronically may result in penalties being imposed by the Canada Revenue Agency.