GST

Canada: Prince Edward Island PST increase

On April 19th 2016, the finance minister for the Canadian province of Prince Edward Island, announced the fiscal 2016-17 budget. Whilst it contained no new taxes or further increases to income tax, it did contain an increase to the Provincial tax part of the Harmonised Sales Tax (HST), taking this from 14% to 15%. This is made up of 10% PST and 5% GST and will be effective as of the 1st of October 2016.

This is the third province this year to announce a rise in PST, see links below to earlier announcements.

New Brunswick increase HST (published April 2016).
New Foundland and Labrador to raise HST rate (published August 2015).

Newfoundland – Canada to raise its HST rate in 2016

Canada’s rising Harmonised Sales Tax

The Canadian province of Newfoundland and Labrador is planning to raise its Harmonised Sales Tax (HST) rate from 13% to 15% on the 1st of January 2016. HST is a combined tax made up of federal Goods & Services Tax (GST) and local Provincial Sales Tax (PST), the GST rate will remain at 5% but the PST will increase from 8% to 10%.

The recoverable amount will also be changing in 2016 and 2017; Municipalities and local service districts will receive a partial rebate on the provincial portion of the HST of:

• 25% effective January 1, 2016
• 57.14% effective January 1, 2017

So this will only be effective on the 10% PST.

India Increase service tax rate

India raises service tax rate to 14%

As of the 1st of June 2015 India’s service tax has increased to 14%, this is a 1.64% rise in the effective VAT rate which was previous 12.36% made up of 12% Service Tax and 2% surcharge for education on the 12%. The service tax currently affects all services except for a select few.

This is part of the transition over to Goods and Services Tax (GST) which is set to roll out in April 2016, the GST Bill seeks to streamline India’s tax administration by eliminating different tax structures in different states, as India operates one of the most intricate and ineffective consumption tax regimes in the world. There are a number of taxes, including:
 
• Indian VAT levied on goods separately by most of the 29 Indian states
• Indian Service Tax which is charged on services
• CENVAT a VAT on the supply of goods charged by the central government
• Professional Tax

This means that often the taxes over lap resulting in double taxation, and also imposes a heavy administration burden on businesses, meaning that the government finds it hard to forecast a budget as the tax system is so unstable they cannot predict revenues accurately. This is why they plan to introduce the country-wide GST. GST will be levied on the supply of goods and services, with potential reduced rate and exempt supplies for essential supplies such as foodstuffs and public transport, which is expected to be implemented at around 16%, the current rise to 14% is just the first stage in this tax overhaul.

Guernsey rejects GST proposal

The possible introduction of GST was proposed in the Personal Tax, Pensions, and Benefits Review. The measure has met with strong local opposition, especially from the retail sector, as the lack of a value-added tax is seen as a key appeal to tourists.

Guernsey’s Parliament has rejected a proposal to introduce a 5% GST rate into Guernsey, which means it will not be following in Jerseys, the other large island forming part of British Crown dependency, footsteps as it introduced GST in 2012. The council ruled out the sales tax by 28 votes to 18, with many believing that GST is not suitable for the Island and its economy despite a predicted £50m revenue generation. However it is yet to be ruled out for the future with many minsters believing the debate will make a comeback.

Malaysian GST registration

How to check if a Business is registered for Malaysian GST

Malaysian GST has now gone live. This new Goods and Services Tax has replaced the old Service Tax.

Their GST is based upon widely accepted OECD standards, which includes full liability across the whole production chain with the right to deduct, and on imports. This is fundamental change from the existing consumption taxes which are only charged once, which have no ability to deduct.

Since the introduction of GST on 1st April 2015, businesses that have registered with the Royal Malaysian Customs have started charging GST on the goods and services that they provide, unless these goods or services fall under the exemptions or zero rated lists or the customer is granted relief from GST.

If you are now receiving invoices with GST charged you must ensure that you are only paying GST to businesses registered and authorised to charge it.

 

How to check a company’s GST status

So how can you check if a company is registered for GST? Continue Reading

What is the difference between GST and VAT?

What is the difference between GST and VAT?

For all intensive puposes VAT and GST are essentially the same type of indirect tax and work in virtually the same way.  Going on the pure defininition VAT is linked to tangible goods, whilst GST is linked to both tangible goods and services. However in most countries that apply VAT, especially European ones, VAT is applied to both goods and services, which would indicate little difference between the two. Yet  there is a big difference between Sales and Use Tax, used in places such as America, and VAT/GST.

Where there is  a requirement to split between goods and services this can easily be accommodated in your Oracle ERP System.

Why MY GST is nothing like Singapore or Australia and more like Europe!

Recently, when setting up the new Malaysian GST, I took to the task assuming that it would be nice and simple and done in a few hours, following the same structure as I would for Singapore which has one of the more simplistic GST setups in Oracle R12 or Fusion. It did not take long however to realize that Malaysia was a complete different animal when it came to the GST solution.

At its bare minimum, there is a 6% GST and a 0% GST rate but unfortunately, as those that know about indirect taxation, its not just about the tax rate but why and as such, VAT or GST is also about information as to why you are charging a certain rate or to provide statistical information to the relevant tax authorities. As such, there are well over 20 different GST tax reporting codes that need to be considered that need to be included on the GST returns for Malaysia.

Indeed, the Malaysian GST was based on the tax regimes of the UK, Singapore and Australia and that is very evident as there is more of a European style with the requirements for reverse charging than anything like Singapore GST.

So before you foolishly go ahead and set the MY GST up in the footprints of SG GST, make sure you do your research and get the right advice or you will soon fall foul of the Malaysian Customs when you start submitting those GST returns.

For more information on Malaysian GST please see our previous posts.

Review of ‘E-Business Suite R12: Malaysia Goods and Services Tax (GST)
Are you ready for the 2015 Malaysian GST?

Are you ready for the 2015 Malaysian GST?

Oracle R12 and Fusion Tax – Malaysian 2015 GST Implementation – Accounting (Tax) Software Compliance and Requirements

On 01 April 2015, the Royal Malaysian Customs Department will implement Goods and Services Tax (GST) replacing the current Consumption Tax. The introduction of GST is part of the Government’s tax reform programmed to enhance the efficiency and effectiveness of the existing taxation system.

As a consequence of this change, companies have to ensure their Accounting Software in use for business is in compliance with new requirements. Developing/Enhancing the accounting software will be necessary to produce additional electronic files, listings, reports, etc. This is something that eBiz Answers has been working on for some time and now has an off-the-shelf solution available for Oracle R12 and Oracle Fusion. Continue Reading