Nova Scotia HST Reduction – Effective April 1, 2025

If you have customers in Nova Scotia, be aware that the Harmonized Sales Tax (HST) rate drops from 15% to 14% today, April 1, 2025. This reduction applies to the provincial portion of the HST, as announced in October 2024 and legislated in December 2024. The Federal Department of Finance has enacted supporting regulations, including transitional rules.

Key Changes

Effective April 1, 2025, taxable supplies of goods, services, real, and intangible property will generally be subject to 14% HST, following the place of supply rules. Businesses should update billing and accounting systems accordingly.

Transitional Rules Overview

The general rule:

  • If HST becomes payable before April 1, 2025, the 15% rate applies.
  • If payable after March 31, 2025, the 14% rate applies.

HST is payable on the earlier of:

  • The date payment is made.
  • The date payment becomes due (based on invoice date or written agreement terms.)

Additional considerations:

  • Real Property Sales: 15% HST applies if ownership or possession transfers before April 1, 2025; otherwise, 14% applies.
  • Deemed Taxable Supply: 15% applies if the change occurs before April 1, 2025; 14% if after.
  • Imported Good & Services: The reduced rate of 14% applies to non-commercial imports and taxable services acquired for use in Nova Scotia after March 31, 2025.
  • Financial Institutions & Pension Plans: The rate reduction impacts taxable benefit rules and streamlined accounting systems, including Quick Methods.

Next Steps to Ensure Compliance

  • Ensure billing systems, accounting software, and tax modules reflect the new rate.
  • Update website shopping carts and offline tax calculations.
  • Review tax settings for compliance with transitional rules.
  • Be mindful that applying 15% instead of 14% may create customer issues and potential CRA audit concerns.

At Achen Henderson CPAs, we specialize in indirect taxes like HST and PST. Let us help you navigate these changes and stay compliant with Canadian tax regulations and customs and trade matters.

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