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206 V O L . 7 5 P A R T 2 M A R C H 2 0 1 7 THE ADVOCATE province11 (either a non-participating province or a participating province) are as follows: THE NON-PARTICIPATING STATUTORY THE PARTICIPATING STATUTORY PROVINCES RATE OF GST PROVINCES RATE OF GST British Columbia 5% Ontario 13% Alberta 5% New Brunswick 15% Saskatchewan 5% Nova Scotia 15% Manitoba 5% Prince Edward Island 15% Quebec 5% Newfoundland and Labrador 15% Yukon 5% Nunavut 5% The Northwest Territories 5% It is very important that lawyers12 charge (i.e., levy and collect) the correct amount of GST on each supply of services made to their clients. If a lawyer charges more GST than is required, the client will be financially prejudiced. Conversely, if a lawyer fails to charge GST, or charges insufficient GST, the lawyer will be personally liable for the uncollected GST.13 For this reason, each service that a lawyer intends to render to a client should be carefully considered in order to determine whether the particular service will be subject to GST, and if so, the statutory rate of GST that is applicable. For example, a supply of a legal service made to a non-resident of Canada in connection with criminal, civil or administrative litigation before a British Columbia court or tribunal would be a zero-rated supply (and therefore would be subject to GST at the rate of 0 per cent) if the legal service were rendered prior to the commencement of such litigation and would be a taxable supply that is subject to GST at the rate of 5 per cent if it were rendered after the commencement of such litigation. In these circumstances the client would pay less GST if the lawyer treated the legal services rendered prior to the commencement of litigation separately from the legal services rendered thereafter. In order to treat the provision of these legal services as two distinct supplies for GST purposes, the retainer letter entered into between the lawyer and the client should stipulate that the legal services rendered by the lawyer during the course of the engagement shall be recorded under any number of distinct file numbers according to their particular nature and that the legal services recorded under any par-


March Pages 2017
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