Industry Advisory - HST

 

As you are aware the Harmonized Sales Tax (HST) comes into effect in Ontario on July 1, 2010. Essentially the introduction of HST will not affect Registrants remittances to TICO.

 

 

Ontario Retail Sales Tax (RST) currently applies at a rate of 8 percent to premiums for certain types of insurance, including group insurance, contributions paid into funded plans or on benefits paid out of unfunded plans as well as payments made into insurance schemes or compensation funds established under an Act of Canada or Ontario. The Travel Industry Compensation Fund falls into this category.

 

Generally, insurance premiums are currently exempt from the federal Goods and Services Tax (GST) as financial services and the treatment under HST will be the same as under GST.

 

Ontario will continue its application of tax at a rate of 8 per cent on the same types of insurance premiums currently taxed under RST.

 

 

TICO Registrants will continue to remit 8% RST on their semi-annual contributions to the Compensation Fund.

 

 

Currently GST does not apply to Registration and Renewal Fees. This means that HST will also not apply when it is introduced in July 2010.