If GST/HST becomes payable, or is paid without having become payable, before

January 1, 2008, the 6% GST rate or the 14% HST rate will apply.

If GST/HST becomes payable on or after January 1, 2008, without having been paid before that date, the 5% GST rate or the 13% HST rate will apply.

If GST/HST is paid on or after January 1, 2008, without having become payable before that day, the 5% GST rate or the 13% HST rate will apply.

If either the date of an invoice, or the payment date under a written agreement, is earlier than the day the invoice is issued, GST/HST becomes payable on the earlier date.

Provisions of the Excise Tax Act that normally determine when the GST/HST is payable will apply to determine the appropriate rate of tax. For example, in the case of a lease,

GST/HST becomes payable on the earliest day the payment is required to be made under the lease agreement.

*Source: Department of Finance and Canada Revenue Agency, November, 2007.

The majority of CFIB members have told us that the GST/HST rate reduction is a positive move by the federal government to help lessen the high level of taxes placed on small- and medium-sized businesses and consumers. As a business owner who collects and remits GST/ HST, there are some steps that you will need to take prior to the new lower rates taking effect on January 1, 2008.

To assist you, CFIB is providing a checklist of various areas you may need to address, as well as highlights of the general transitional rules. Given that the GST/HST tax affects businesses differently, this checklist should be used as a general guide for your business. For detailed information on the GST/HST rate reduction you should consult your accountant or the Canada Revenue Agency.

CFIB Checklist