top 3 hst issues facing organizations today
DESCRIPTION
Finding it difficult to keep track of all the rules relating to HST? Looking for direction and guidelines on HST requirements to know where to focus your attention? Is the myriad of HST rules confusing you? Seeking deeper knowledge of the CRA audit process so that you can be prepared when it's your turn to be audited? Connect with our experts as they present & discuss the following issues: • "Place of Supply" rules • The CRA audit process • Dealing with Non-Residents of Canada Follow along with our tax experts as they outline these 3 HST issues and help you understand how they apply to you and your business or not-for-profit organization. To listen to the webinar, please visit our webinar library page: http://www.welchllp.com/resource-centre/webinars/TRANSCRIPT
Welcome to Today’s Webinar:
Top 3 HST Issues Facing Organizations Today
Questions
Ground Rules
• Attendees are in listen-only mode • This webinar is being recorded for future on-demand playback • Your participation represents acknowledgement that we are recording
• Tweet questions & comments to: #Welchtax
Windows Mac Tablet
Garth Steele, CPA, CA Indirect Tax Partner [email protected] www.welchllp.com Twitter: @garthsteele http://ca.linkedin.com/in/garthsteele
Presenters
Dineen Beath Lawyer – Taxation, Tax Planning & Tax Litigation [email protected] www.lwlaw.com Twitter: @LWConnect http://ca.linkedin.com/pub/dineen-beath/3b/196/a92
Issue #1: Place of Supply Rules Introduction
• Introduced July 1, 2010 but still confusion
• Necessary to determine which rate of HST to charge
• Five provinces harmonized (ON, PEI, NB, NS, NF)
• Three provinces not harmonized (BC, MAN, SASK)
• One province has no sales tax (AB)
• Quebec – distinct value added tax like the HST
Rules
• Designed to force every transaction with a customer to
be made in a specific province
• Rules vary based on nature of supply:
o Goods by way of sale
o Goods by way of lease
o Real Property
o Intangible Personal Property
o Services – General
o Services – Specific
Challenges
• Sale of Goods is “easy” –
based on where goods are delivered
• What about:
o Professional services
o Conference registration
o Electronic subscription to database
or journal
Issue #2: Dealing with Non-Residents Introduction
• HST is a tax on supplies made in Canada
• Canadian businesses may buy from Non-Residents
• Canadian businesses may sell to customers outside of Canada
Canadian businesses buying from Non-Residents
• Is the Non-Resident registered for HST?
• 5% GST will be paid at the border on all
commercial imports
• Who is the importer of record?
• Avoid non-recoverable GST/HST
• Self-assessing HST
Canadian businesses selling to Foreigners
• Is the supply made in Canada?
• What about registering for foreign taxes?
• Internet sales can be complex
• Services: Potentially zero-rated even if place of supply is within Canada
Issue #3: CRA Audit & Objection Process Forms of Audit
• “Desk Audit” or “examination”
o Likely triggered by large refund
claim or unusual transaction levels
• Full On-Site audit
How to Respond
• CRA will ask for information. Be co-operative.
• CRA will issue a “proposal letter” giving you 30
days to provide more information
• Formal assessment
• Objection to CRA Appeals Division within 90
days
• Appeal to Tax Court within 90 days of CRA’s
confirmation of assessment
Approach to Take
Don’t delay in dealing with the audit and appeal
Be courteous but firm with the auditor/appeals officer
Perhaps ask for questions in writing and respond back in writing
Ask for a meeting with the auditor and his/her supervisor in certain
circumstances
Involve your external tax advisors right away
Garth Steele, CPA, CA Indirect Tax Partner [email protected] www.welchllp.com Twitter: @garthsteele http://ca.linkedin.com/in/garthsteele
Q & A
Dineen Beath Lawyer – Taxation, Tax Planning & Tax Litigation [email protected] www.lwlaw.com Twitter: @LWConnect http://ca.linkedin.com/pub/dineen-beath/3b/196/a92