Introduction of the Harmonized Sales Tax (HST) in Ontario - Update

Circular Note No. XDC-0850 of May 3, 2010

The Department of Foreign Affairs and International Trade (Office of Protocol) presents its compliments to Their Excellencies the Heads of Diplomatic Missions and notified Chargés d’affaires, a.i. accredited to Canada, and the Heads of International Organizations and other Offices established in Canada, and has the honour to refer to its Circular Note No. XDC-0034 of January 20, 2010 regarding the introduction on the Harmonized Sales Tax (HST) on purchases made in the Province of Ontario.

The Department requests in particular that diplomatic missions transmit the content of this Note to all consular posts established in Ontario and consular officers whose consular district extends to that province.

Effective July 1, 2010, the Ontario Retail Sales Tax (RST) and the federal Goods and Services Tax (GST) will be replaced by a single value added sales tax, the HST. While a number of foreign representatives, spouses and common-law partners, are currently entitled to purchase taxable goods and services in Ontario exempt from RST by showing their Identity Card to the vendor, this measure will no longer be in effect starting July 1, 2010. Identity Cards issued by the Office of Protocol following the implementation of the HST will no longer indicate “ON” on the back.

The new HST will be administered by the federal government and will have the same tax base and structure as the federal GST, with a few exceptions. The HST will have a combined rate of 13% and the exemption will be extended by reimbursement only.

Missions and International Organizations should be aware that a transition period will be in effect from May to July during which the HST will be applied on a limited number of goods and services. In other instances, some retailers may start refusing to exempt individuals from the RST at point-of-purchase. In this specific regard, individuals may wish to keep their receipts and submit a rebate claim to the Ontario Ministry of Revenue, as per the Department’s Circular Note XDC-0346 of February 27, 2006. Sources: Ontario Ministry of Revenue website for the General Application form.

How to claim a reimbursement from the HST

To find out how to claim a reimbursement from the HST, please refer to the Department’s Circular Note NO. XDC-1433 of July 3, 2008. The Canada Revenue Agency will process reimbursement claims in accordance with existing bilateral arrangements and other statutory instruments.

Mission and International Organizations, as well as their accredited members, who are currently eligible for the GST rebate program will be eligible for the HST rebate program to the extent of current conditions and limitations, unless otherwise indicated by the Department. Missions and International Organizations should refer to their respective bilateral arrangement for details about their HST rebate eligibility.

Customs privileges unaffected

All persons entitled to the privilege of importing goods duty and tax free under the Foreign Missions and International Organizations Act will be relieved of the HST at the time of release. For details regarding importation privileges, missions and international organizations should refer to the following document: MEMORANDUM D21-1-1.

Additional information with regards to eligibility for the GST/HST rebate program and applicable restrictions should be addressed to the Office of Protocol’s Privileges and Immunities Unit at 343-203-3002.

The Department of Foreign Affairs and International Trade (Office of Protocol) avails itself of this opportunity to renew to Their Excellencies the Heads of Diplomatic Missions and notified Chargés d’affaires, a.i. accredited to Canada, and to the Heads of International Organizations and other Offices established in Canada, the assurances of its highest consideration.

Ottawa, May 3, 2010