With the Ontario Harmonized Sales Tax ("HST") of 13% coming into effect on July 1, 2010, many owners of small to mid-sized businesses are particularly concerned about this tax change and how it will impact them. Some questions that may come to mind are:

• Other than changing the sales tax rate from 5% to 13% in our accounting software, what else should we be considering?
• Can our company claim a full Input Tax Credit ("ITC") on all HST paid to suppliers?
• When must the final Provincial Sales Tax ("PST") return be filed by?
• Will a new form replace the existing Goods and Services Tax (GST) return?
• Will the transition to HST impact what we charge to customers outside the province of Ontario?
• Will this tax change put my company at a competitive disadvantage against companies selling the same goods/services in other provinces with only the 5% GST in effect?
• Will I need to change my line of credit with the bank to manage my cash flow?
• Our company sells many goods to U.S. customers which are zero-rated for GST purposes. Will this continue to be the case with the implementation of the HST?

To help business owners get answers to the above questions and a few others, we are pleased to put together a series of Newsletters dealing with the transition to HST. The following Newsletters will be released in the weeks leading up to the July 1, 2010 Canada Day implementation date and will focus on specific areas relating to the HST transition:

HST Transition Newsletter #1: Overview of the HST
HST Transition Newsletter #2: Impact of HST on Businesses Selling Goods
HST Transition Newsletter #3: Impact of HST on Businesses Selling Services
HST Transition Newsletter #4: Impact of HST on Construction and Real Estate Developers
HST Transition Newsletter #5: Restriction on Input Tax Credits for Large Businesses

If, at any point, you have questions or need further clarification on how the HST transition will impact your business, please give us a call at (416) 598-4557.

Other relevant details can be found at: www.cra.gc.ca/harmonization