If you operate a business in Canada, you are likely familiar with the Harmonized Sales Tax (HST). The HST is a combination of the federal Goods and Services Tax (GST) and the provincial sales tax, creating a single, federally administered tax.


Most goods and services supplied in Newfoundland and Labrador are subject to the Harmonized Sales Tax (HST). This province has been a participating province since July 1, 1997.

The HST operates the same way as the GST, which is in place across Canada and is applied to the same types of goods and services.

Effective July 1, 2016, the Government of Newfoundland and Labrador increased the provincial portion of the HST from 8% to 10%, making the new HST rate 15% (a combination of the 5% federal GST and the 10% provincial portion).

You may wonder what gives the province the authority to change the HST rate. The HST is levied by the Government of Canada, pursuant to the federal Excise Tax Act. Participating provinces have entered into a federal-provincial agreement called the Comprehensive Integrated Tax Coordination Agreement (CITCA). This agreement allows provinces to change the tax rate applied to the provincial portion of the tax once in any twelve-month period.

CITCA agreements provide for the GST and provincial sales tax to use the same tax base and include a formula for the sharing of revenue between the federal government and HST participating provinces.

The Canada Revenue Agency (CRA) handles the administration of the HST, including the administration of the HST transitional rules. All individuals and businesses must deal directly with the CRA for any of these or other administrative issues.

As a business owner, it is important to understand the HST and how it applies to your business. This tax can affect your bottom line and should be factored into your pricing strategy. Additionally, keeping accurate financial records and understanding the HST rules and regulations can help you avoid costly mistakes and penalties.


At JD Bookkeeping, we are committed to providing high-quality and reliable bookkeeping services to our clients. We stay up-to-date with industry practices and Canadian bookkeeping laws and rules, including those related to the HST. Our goal is to empower businesses by delivering comprehensive financial solutions that enable them to make informed decisions and thrive in their respective industries.

If you need assistance with your bookkeeping, including managing the HST, don't hesitate to contact us. We are here to help you achieve your financial goals. To contact us, please click here or call us at (519) 949-2918.