HST to benefit B.C. film industry
While the negative impacts of the HST have garnered much attention, Ken Ghag, executive director for commodity tax at Ernst & Young, told the Straight that the film and television industries will benefit from the taxation change.
Ghag, who has conducted three HST seminars for the film industry, explained by phone that film-production companies—as well as suppliers of catering and lighting—that are currently paying seven-percent PST on rental equipment, props, costumes, and other goods will be able to recover the 12-percent HST after July 1. “That means that yes, they will be paying a higher rate of tax at 12 percent, but the full 12 percent will be fully recoverable by them on their GST returns, which means that effectively they’re not paying that tax,” he said.
Ghag noted that self-assessments will no longer be necessary. “The film-production industry would have before been registered for the provincial sales tax and would have been doing some self-assessing of provincial sales tax for costumes and equipment brought from other provinces [or the U.S.] into British Columbia.”¦And they would have to self-assess provincial sales tax on all that equipment. Well, they’re no longer going to have to do that whole compliance process, so that’s not only going to save them some tax but also some compliance costs,” he said.
Streamlining the filing process will provide additional savings. Ghag explained that now only one return, auditor, and administrator will be required instead of two of each.
Ghag added that companies do need to meet some accounting requirements and take internal steps in order to benefit from the HST.