Importing to Ontario after July 1: pay GST twice?
06-23-2010 | 08:39 PM
#1
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From: Ontario Canada
Importing to Ontario after July 1: pay GST twice?
I know it's counterintuitive, but it's starting to look like Ontarians who import a US car will pay GST at the border, and then 13% RST when plating. This effectively means we will be paying GST twice.
I actually called the Ministry this afternoon, and the first line customer service girl confirmed this. I sure hope she's not right.
In looking at CBSA webpages about the Maritime HST, they pay GST at the border and then a reduced HST to compensate for the prepaid GST. One would assume (or at least hope) that this would be the case in Ontario.
I actually called the Ministry this afternoon, and the first line customer service girl confirmed this. I sure hope she's not right.
In looking at CBSA webpages about the Maritime HST, they pay GST at the border and then a reduced HST to compensate for the prepaid GST. One would assume (or at least hope) that this would be the case in Ontario.
06-23-2010 | 09:38 PM
#3
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Since after July 1st there will be no such thing as GST anymore in Ontario ( all GST numbers/accounts are automatically being converted to HST) I would assume they will collect the full HST amount at the border and then all you would pay at the DMV are the registration costs. Someone please correct me if I am wrong, but this is what would seem to be most logical.
06-23-2010 | 10:10 PM
#4
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Since after July 1st there will be no such thing as GST anymore in Ontario ( all GST numbers/accounts are automatically being converted to HST) I would assume they will collect the full HST amount at the border and then all you would pay at the DMV are the registration costs. Someone please correct me if I am wrong, but this is what would seem to be most logical.
There is no way you'll be paying 21% sales tax (13% HST + 8% PST).
06-24-2010 | 06:22 PM
#5
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I spent about an hour on the phone getting escalated from person to person, eventually ending up with a guy who specializes in tax decisions. He said what will happen is that you'll pay GST at the border, for which you will get a receipt, and you will show this receipt to MTO when you plate the car. All told, it will be the same 13% as it's always been.
06-24-2010 | 08:41 PM
#6
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I spent about an hour on the phone getting escalated from person to person, eventually ending up with a guy who specializes in tax decisions. He said what will happen is that you'll pay GST at the border, for which you will get a receipt, and you will show this receipt to MTO when you plate the car. All told, it will be the same 13% as it's always been.
06-25-2010 | 06:02 PM
#7
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So I did some digging on the website where they publish Ontario laws. When I read the following, I come to the conclusion that no RST (PST) is payable on a US car. What do you folks think - any people familiar with tax law on here?
Tax on specified vehicles
4.2 (1) Subject to subsection (5), every purchaser of a specified vehicle shall pay to Her Majesty in right of Ontario a tax in respect of the consumption or use of the specified vehicle computed at the rate of 8 per cent of the fair market value of the specified vehicle if the purchaser acquires the vehicle before July 1, 2010 and shall not pay tax in respect of the consumption or use of the specified vehicle under section 2. 2009, c. 34, Sched. R, s. 10 (1).
Same, purchases after June 30, 2010, etc.
(1.1) Every purchaser of a specified vehicle shall pay to Her Majesty in right of Ontario a tax in respect of the consumption or use of the specified vehicle computed at the rate of 13 per cent of the fair market value of the specified vehicle if the purchaser,
(a) acquires the vehicle in Ontario after June 30, 2010; or
(b) acquires the vehicle in Canada but outside Ontario and,
(i) brings the vehicle into Ontario after June 30, 2010, or
(ii) receives delivery of the vehicle in Ontario after June 30, 2010. 2009, c. 34, Sched. R, s. 10 (1).
4.2 (1) Subject to subsection (5), every purchaser of a specified vehicle shall pay to Her Majesty in right of Ontario a tax in respect of the consumption or use of the specified vehicle computed at the rate of 8 per cent of the fair market value of the specified vehicle if the purchaser acquires the vehicle before July 1, 2010 and shall not pay tax in respect of the consumption or use of the specified vehicle under section 2. 2009, c. 34, Sched. R, s. 10 (1).
Same, purchases after June 30, 2010, etc.
(1.1) Every purchaser of a specified vehicle shall pay to Her Majesty in right of Ontario a tax in respect of the consumption or use of the specified vehicle computed at the rate of 13 per cent of the fair market value of the specified vehicle if the purchaser,
(a) acquires the vehicle in Ontario after June 30, 2010; or
(b) acquires the vehicle in Canada but outside Ontario and,
(i) brings the vehicle into Ontario after June 30, 2010, or
(ii) receives delivery of the vehicle in Ontario after June 30, 2010. 2009, c. 34, Sched. R, s. 10 (1).
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06-25-2010 | 09:56 PM
#8
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and then line (1.1)(i)brings the vehicle into Ontario after June 30, 2010,
it is clear that HST will be charged on a vehicle that you bring from outside Ontario to register in Ontario. Before July 1 if you brought a car in from the US you would pay GST (5%) at the border and then RST (8%) when you registered the car at the license bureau. You're still paying the same amount, it just has a new name.
06-25-2010 | 10:22 PM
#9
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It's not clear from the lack of indenting, but the last two subclauses (labeled i and ii) relate to (b) i.e. they relate to cars bought in Canada. This law doesn't seem to make US cars subject to RST, but that's pretty counterintuitive so I must be missing something.
06-25-2010 | 10:51 PM
#10
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Good point about the indents...it's getting late. I found this on the Ontario Ministry of Revenue site:
http://www.rev.gov.on.ca/en/taxchang...l#Footnote_4_4
HST does not apply; however, Ontario will maintain the PST on private transfers of used vehicles at a rate of 13 per cent to help ensure a level playing field between sales by dealerships and private sales.
This doesn't specify the origin of the vehicle but it does seem to cover all vehicles registered in Ontario. I suspect the origin is irrelevant.
http://www.rev.gov.on.ca/en/taxchang...l#Footnote_4_4
HST does not apply; however, Ontario will maintain the PST on private transfers of used vehicles at a rate of 13 per cent to help ensure a level playing field between sales by dealerships and private sales.
This doesn't specify the origin of the vehicle but it does seem to cover all vehicles registered in Ontario. I suspect the origin is irrelevant.
06-25-2010 | 10:58 PM
#11
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Yah, but that note is just a summary of the actual law I quoted. I don't want to argue too vociferously because I'm pretty sure I'm wrong, and even if I'm not I'm sure the loophole will be plugged as soon as the legislature resumes in September. Wouldn't it be great if this was the summer of PST-free US Porsches?
06-25-2010 | 11:19 PM
#12
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Yah, but that note is just a summary of the actual law I quoted. I don't want to argue too vociferously because I'm pretty sure I'm wrong, and even if I'm not I'm sure the loophole will be plugged as soon as the legislature resumes in September. Wouldn't it be great if this was the summer of PST-free US Porsches?
06-27-2010 | 10:11 PM
#13
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So I spoke to a tax lawyer and she said all imported noncommercial goods are subject to HST, and she thinks we'll pay 13% at the border.
It was fun calculating all the tax I was going to be saving while I was misinformed though. :-)
It was fun calculating all the tax I was going to be saving while I was misinformed though. :-)
