As we noted in the July 2012 Global VAT/GST Newsletter (the "July 2012 Newsletter"), the Canadian sales tax landscape is undergoing many changes over the next few months with (i) the exit of British Columbia ("BC") from the harmonized sales tax ("HST") system and its reinstatement of a provincial retail sales tax; (ii) the entry of Prince Edward Island into the HST system, which will take effect on 1 April 2013; and, (iii) the further harmonization of the Quebec Sales Tax ("QST") with the federal goods and services tax ("GST"), which takes effect on 1 January 2013. The QST changes will have a significant impact on financial institutions as supplies of financial services, which are currently zero-rated, become exempt. Businesses are also reminded that as of 1 January 2013, GST will no longer be part of the QST base and the QST rate will increase to 9.975 percent.

In Ontario, as part of the transition from Ontario retail sales tax ("RST") to HST, the provincial government initially announced that taxpayers generally could apply for refunds or rebates of RST paid until the time limit for claiming the rebate expires or on 30 June 2014, whichever is earlier. However, as we noted in the July 2012 Newsletter, the Ontario Government subsequently reduced the period for claiming RST refunds or rebates such that taxpayers generally are required to apply for refunds or rebates of RST paid no later than the deadline for claiming the rebate or 31 December 2012, whichever is earlier. The restriction does not apply to refunds and rebates of RST paid in respect of insurance premiums and private transfers of used vehicles, which remain subject to the general four-year limitation period for claiming refund and rebate of RST overpayments. We strongly recommend that clients review their books and records to ensure that they file claims to recover RST overpayments before the time for doing so expires.