Wednesday, July 21, 2010

HST for List Brokers - Media Buying

Attention List Brokers:

Effective July 1 st, 2010 Harmonized Sales Tax (HST) will be implemented in Ontario and British Columbia. This tax will replace the current Goods and Services Tax (GST). As part of this implementation the government has made substantial changes to “place of supply” rules for intangible personal property (IPP) that will impact the taxation of list rentals. In addition to the aforementioned, the pre-existing Nova Scotia HST will be increased by 2% to 15% on July 1, 2010. The following indicates the impact of these changes on list rentals.

Canadian Lists (Lists containing only Canadian names/addresses)

Effective July 1, 2010, for all brokers located in Canada, List Management Services will be charging GST/HST based on the invoicing address of the broker.

Lists invoiced to parties located outside of Canada must also have GST/HST applied as the list contains Canadian rights and must be taxed based on IPP place of supply rules regardless of the acquirer’s residency. This tax will be charged at the rate of 13% and will only apply when the list owner is registered for GST/HST purposes.

If you are not registered and conduct business in Canada you may wish to register for GST/HST to allow you to recover taxes paid.

U.S.A. Lists (Lists containing only U.S.A names/addresses)

Lists rented in the U.S.A. containing only non-Canadian names and addresses will have no GST/HST applied as the lists contain no Canadian rights.

Please refer to Canada Revenue Agency GST/HST Technical Information Bulletin B-103 for further information on “place of supply” rules.

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