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Queen's University
 

Guidelines for Self-Assessing the HST

Introduction

This document has been compiled to assist individuals in determining if there is a need to and how to self assess Harmonized Sales Tax (HST) on purchases made at Queen’s University.  To self assess means to calculate how much tax should be paid on the purchase of a good or service, and then to remit the tax.

It is the responsibility of the individual initiating the purchase to indicate to Accounts Payable that tax needs to be self assessed using the check box on the cheque requisition form to indicate self assessment is required

Please note that this document is intended as a basic guide only. The most up to date and accurate information concerning self-assessment can be found in official documentation from the Canada Revenue Agency.

General Rules

Under the current place of supply rules, Queen’s is required to self-assess tax on any supply of property or service made outside a participating province for use in a participating province. Queen’s may then claim rebates on tax paid according to the rebate rules for Public Service Bodies: 67% of the federal HST, 78% of the provincial HST, 100% of the federal HST on printed books.  A participating province is a province that charges HST.

Queen’s is also required to self-assess HST on any supply of property or service made in a participating province with a lower HST rate for use in a participating province with a higher HST rate. For example, if Queen’s is charged the BC HST at 12% but the supply is consumed in Ontario, Queen’s must self assess another 1% provincial HST to bring the total to the Ontario rate of 13%. Queen’s may then claim the Public Service Body rebates on any taxes paid.

Suppliers in non-participating provinces are required to charge HST if the place of supply is in a participating province.  If a supplier instead charges GST only or GST and another province’s tax, the supplier should be notified so that the invoice can be changed. Ultimately, the responsibility falls on the supplier to charge correctly. In some cases, the place of supply may actually be in another province (many travel expenses for example), in which case the supplier will correctly charge a different type of tax. Queen’s cannot claim a Public Service Body rebate on provincial tax that is not HST.

Exceptions

Queen’s is not required to self-assess HST on:

  1. Goods or services that are normally tax-exempt.
  2. Goods or services that are not consumed in a participating province (reimbursement of travel expenses for example).
  3. Goods that are for commercial resale (a full input tax credit is available)
  4. Printed books (printed books are exempt from the provincial HST and a 100% rebate on the federal HST is also available for Queen’s) 

If You Purchase Tangible Personal Property

Most common case: Self-assess the provincial HST at 8%, Queen’s receives a 78% rebate

What is Tangible Personal Property?

Tangible personal property in this case refers to items that are physically shipped across the border.
Common examples include:

  1. Lab Equipment
  2. Books
  3. Computers   

How to Self-Assess the HST on a Tangible Supply

Typically, such items are assessed 5% tax by the customs broker. If HST is not charged by the vendor (the most common case for foreign suppliers), Queen’s is required to self assess the HST at the same rate an Ontario vendor would have charged it. If the customs broker has already assessed 5% federal HST, Queen’s must self-assess the 8% provincial component of the HST.

Examples

Example 1: Queen’s purchases a piece of lab equipment from a supplier in the United States for $1000.00. The supplier does not charge HST. The item is shipped across the border and the customs broker charges Queen’s the 5% federal component of the HST at $50.00. Queen’s is then required to self assess the other 8% at $80.

Example 2: Queen’s purchases furniture from a supplier in the United States for $1000 and $130 HST. Since the supplier charged the full HST, there is no requirement for self-assessment.

Example 3: Queen’s purchases software from a supplier in the United States for $100 and the software is shipped to Queen’s in the form of a CD-ROM.  The supplier charges the 5% federal component of the HST only at $5. Queen’s must self assess the other 8% - $8.

Example 4: Queen’s purchases a book from a supplier in Germany for use in the library. The supplier charges 5% federal HST. In this case Queen’s would not have to self assess the 8% provincial HST since printed books (does not include ebooks or electronic databases) are eligible for a point of sale rebate on the provincial HST. Queen’s is also eligible for a 100% book rebate on the federal HST instead of the usual 67% university rebate (provided that the books are not for resale).


If you purchase Intangible Personal Property

Most Common Case: Self-Assess HST at 13%, Queen’s claims a mixed rebate of 73.77%

What is Intangible Personal Property?

Intangible personal property typically refers to the supply of electronic goods or rights to access content. If the intangible property can be used in a participating province, self-assessment is required. Common examples include

  1. Electronic Subscriptions (library databases, site access)
  2. License agreements (software, intellectual property)

How to Self-Assess the HST on Intangible Personal Property

Intangible supplies do not go through customs. Unless the vendor charges the HST, no tax will be charged. Queen’s is required to self assess the full HST on any taxable intangible supplies that are consumed in a participating province.

Examples

Example 1: Queen’s purchases the right to access an electronic database of research journals from a supplier in the United States for $10,000.00. The supplier does not charge tax and the item is not shipped so our broker does not assess any tax. The database is for use in Ontario so Queen’s must self-assess the full 13% HST at $1,300.00.

Example 2:  Queen’s purchases access to an electronic database that can be used in the United States only. The supply is not being consumed in a participating province so no self-assessment is required. 


If You Purchase a Service

Most Common Case: Self-Assess HST at 13%, Queen’s claims a mixed rebate of 73.77%

For services that relate to a location specific event or tangible goods: Queen’s is required to self-assess the HST if the service is performed in relation to tangible property that is located in a participating province or a location specific event that takes place in a participating province.

For services that are not in relation to tangible personal property or a location specific event: Queen’s is required to self assess the HST if the service takes place in a participating province OR the service provider obtains a billing address in a participating province.

Examples

Example 1: A contractor from the UK is hired to inspect a piece of equipment that is located in the UK. The service takes place entirely in the UK so no HST is due.

Example 2:  A consultant from the United States is hired to assist in the completion of a report that is to be used in Ontario. He does not charge HST. Since the supply is to be used in Ontario, Queen’s must self-assess the HST at 13%.

Example 3:  A consultant bills Queen’s for advice he gave over the phone while he was in the United States. He does not charge any HST. Since the consultant billed Queen’s at its address in Ontario, the place of supply is Ontario and Queen’s must self assess HST at 13%.

Kingston, Ontario, Canada. K7L 3N6. 613.533.2000