GST rate cut
January 4, 2008
The rate of GST was reduced from 6% to 5% effective January 1, 2008.
Generally, the new 5% GST rate will apply to the supply of taxable goods, intangible property (such as rights), and services:
- if GST becomes payable on or after January 1, 2008 without having been paid before that day; or
- if GST is paid on or after January 1, 2008 without having become payable before that day.
If GST/HST becomes payable or is paid in 2007, the 6% GST rate will apply.
Regarding work in progress, this is from the Government of Canada's website:
"I am an accountant issuing an invoice after January 1, 2008 for services performed from September to December 2007. What rate of tax do I charge on these services?
Since the invoice was issued after January 1, 2008, you would charge the reduced 5% GST or 13% HST rate."
We see no reason why lawyers would be treated differently from accountants in a similar situation.
The full text of the Government's Notice may be found at: http://www.cra-arc.gc.ca/E/pub/gi/notice226/notice226-e.html.
If you require further clarification, contact Dave Bilinsky, Practice Management Advisor, at 604-605-5331 or firstname.lastname@example.org.