PEI Raise HST to 15% October 1, 2016.

Prince Edward Island will be raising their Harmonized Sales Tax (HST) to 15% (from 14%) beginning October 1, 2016.

This decision was made on April 19, 2016, when the PEI Government announced its intention to increase the Provincial rate of the HST (PST) to 10% effective October 1, 2016, resulting in an HST rate of 15% when added to the 5% GST.

PEI set out transitional rules to determine which rate – the existing 14% HST, or the new 15% HST – should apply in respect of transactions that straddle October 1st and under these rules suppliers would generally be required to charge the 15% HST on any consideration that becomes due without having been paid, or is paid without having become due, on or after October 1, 2016, for taxable supplies of property or services.

Under the Excise Tax Act (ETA), the consideration, or a part thereof, for a taxable supply generally becomes due on the earliest of:

  • The day the supplier first issues an invoice in respect of the supply for that consideration or part thereof;
  • The date of that invoice;
  • The day the supplier would have, but for an undue delay, issued an invoice in respect of the supply for that consideration or part thereof; and
  • The day the recipient of the supply is required to pay that consideration or part thereof to the supplier pursuant to a written agreement.

 

Regarding real property transactions, supplies of services are to charge the 15% HST rate to any consideration that becomes due without having been paid, or is paid without having become due, on or after October 1, 2016.

Conversely, the 14% HST rate applies to any consideration that becomes due or is paid before October 1, 2016.

 

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