Effective April 1, 2025, the Harmonized Sales Tax (HST) has been reduced from 15% to 14%. This change will only impact invoices that have been created after April 1, 2025. Invoices generated prior to April 1, 2025, will not require adjustments and the 15% HST will apply.

The Nova Scotia government has outlined specific transitional rules to determine the applicable tax rate, which can be found on their official website. According to these rules, the applicable tax rate is based on the earlier of the invoice date or the payment date. Invoices created and payable before April 1 will be subject to the 15% HST rate, while those created and paid after April 1 will benefit from the reduced rate of 14%.

The example below was adapted from the CRA website click here, which also provides clarification on the transition.

A professional association issuing invoices on March 10, 2025, for annual taxable memberships in the association. The membership year is from April 1, 2025, to March 31, 2026, and payment is due in full 30 days after the invoice date. On April 8, 2025, a member pays their membership fee for the April 1, 2025, to March 31, 2026, period. Which HST rate applies?

The HST at 15% applies to the membership since the consideration for the membership is deemed to become due on the earliest of the four dates. In this case, the earliest is the date the invoice is issued, which is March 10, 2025 (that is, before April 1, 2025).

For more detailed information, please refer to the provincial government website. HERE