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    March 25th, 2009

    ♫  Let me tell you how it will be,
    There’s one for you, nineteen for me,
    ‘Cos I’m the Taxman,
    Yeah, I’m the Taxman.
    Should five per cent appear too small,
    Be thankful I don’t take it all.
    ‘Cos I’m the Taxman,
    Yeah yeah, I’m the Taxman…

    Lyrics and  music by George Harrison, recorded by The Beatles: “Taxman”.

    The Vancouver Sun reported today that Ontario is set to harmonize the PST and GST.

    Final details will have to come from the Budget once announced this week, but this could signal that Ontario will join BC in having legal services taxed at both the Federal (GST) and Provincial (PST) levels. At a time when the economy is in a downswing, this cannot be good news for lawyers in Ontario. Furthermore, if Ontario implements this, will the rest of the country be far behind?

    While tax news is never good, at least if Ontario makes all professional services taxable, then at least all professionals will be on the same playing field. BC has long suffered under the fact that legal services were taxable Provincially but services by other professionals were not.

    This had strange implications: when mediation services were rendered by a lawyer, in some cases they were classified as being taxable, but the same mediation services rendered by a mediator who was not a lawyer were not. There were other similar distortions that placed BC lawyers at a disadvantage – arising under the Interjurisdictional Practice Protocol. Perhaps Ontario lawyers can avoid the strategic disadvantages that have occurred in BC by the uneven application of the provincial taxation rules.

    One thing is for certain: It appears that Ontario lawyers cannot avoid the two great certainties in life: dealing with death and dealing with the Taxman.

    This entry was posted on Wednesday, March 25th, 2009 at 5:51 pm and is filed under Budgeting, Firm Governance, Issues facing Law Firms, Law Firm Strategy, Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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