Goods and Services Tax Reduced to 5% on January 1, 2008

The Goods and Serices Tax ("GST") rate will go down from 6% to 5% on January 1, 2008.

What rate applies to legal services that a lawyer provided in 2007, but billed in 2008?

According to Canada Revenue Agency's GST/HST Notice dated December 18, 2007, lawyers should collect 5% on all bills rendered on or after January 1, 2008, even if the services were provided before January 1, 2008.

If a lawyer bills his or her client before January 1, 2008, 6% GST is payable, even if the client waits until 2008 to pay.