Effective July 1, 2010, the Harmonized Sales Tax (HST) will replace the GST and provincial sales tax (PST) in British Columbia.
Some products and services will see an increase in the amount of tax charged as a consequence of the HST, but the taxes on legal services will not increase. Legal services are already subject to both GST and PST and so costs will not increase with the implementation of the HST in B.C. Legal fees for services rendered (lawyer time and disbursements on the clients behalf) prior to July 1, 2010 are being taxed at 12% (GST 5% + PST 7%), and similar charges after the July 1st transition date will be subject to 12% HST.
In order to avoid the complications that result from having pre and post HST time and disbursements recorded on files, our law firm has elected to bill matters with outstanding entries prior to July 1, 2010 to clear accounts up to the effective date.
For clients who are not billed prior to this transition date, their bill may show GST and PST for services rendered up to June 30, 2010, and HST for services rendered after July 1, 2010 but without duplication.
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