Preparing the Return

QuickBooks Online users can obtain additional information HERE (step 6).

QuickBooks Desktop users can obtain additional information HERE.

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Summary

Companies charge HST on most products and services sold in Canada. The rate for Ontario is 13% (see below for all HST rates). Returns are normally filed quarterly. The return is due 30 days after the quarter end date.

The Quick Method

Quick method users keep a portion of the HST charged to their customers and do not claim input tax credits (ITCs) on their expenses (except for capital assets purchases eg. furniture, computers, equipment).

Complete the HST form as follows:

  • Line 101 – sales for the quarter, excluding HST —based on invoices prepared, even if not paid
  • Line 105 – HST charged to customers—based on invoices prepared, even if not paid LESS HST you are allowed to keep (see below for calculation)
  • Line 108 – HST paid on capital purchases (computers, equipment, furniture)
  • Line 109 – Line 105 minus line 108. If the amount is negative, write a – sign in the box beside line 109
  • Line 114—If line 109 is negative (i.e. refund), enter it again here.
  • Line 115—If line 109 is positive, enter it again here.

Calculating the HST you are allowed to keep: If you charged HST @ 13% on all invoices, multiplying the HST charged by 24%. Ontario companies that charged only 5% GST (eg. sales to Quebec) can keep 62% of the GST charged to those customers. Ontario companies that charged 15% HST can keep 20% of that HST charged. In the period your annual sales exceed $30,000, add an additional $300 (once per year).

This method is for businesses with annual sales less than $400,000. You must file an election with CRA before you can use this method.

The Regular Method

Complete the HST form as follows:

  • Line 101 – sales for the quarter, excluding HST —based on invoices prepared, even if not paid
  • Line 105 – HST charged to customers—based on invoices prepared, even if not paid
  • Line 108 – HST paid (expenses, computers, equipment, furniture)
  • Line 109 – Line 105 minus line 108. If the amount is negative, write a – sign in the box beside line 109
  • Line 114—If line 109 is negative (i.e. refund), enter it again here.
  • Line 115—If line 109 is positive, enter it again here.

Filing the Return

Returns with a negative or zero balance can be Netfiled if there is an access code printed on your return.

Returns with a balance owing can be filed and paid via your bank’s online government tax & filing system.

If mailing, send a cheque along with Part 2 of the original CRA return to CRA Tax Centre, PO Box 6000 Stn Main
Shawinigan-Sud QC  G9N 7W2.

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HST Rules & Rates

The tax that you charge will normally depends on where your customer is located.
For retail operations, the customer is located where the store is located.
The detailed rules can be found below – see link for CRA place of supply rules.

Customers located outside of Canada are not charged GST or HST.

Customers located in a HST province are charged the HST applicable to that province:
Ontario – 13%
New Brunswick – 15% (was 13% prior to July 1, 2016)
Nova Scotia – 15%
Newfoundland – 15% (was 13% prior to July 1, 2016)
PEI – 15% (was 14% prior to October 1, 2016)

Customer located in a non-HST province  are only charged 5% GST:
Quebec
Alberta
Saskatchewan
Manitoba
British Columbia (was a HST province until April 1, 2013)

If your company is located in Quebec:
Charge 5% GST & 9.975% TVQ to customers located in Quebec
Charge 13% HST to customers located in Ontario
If your supplier is located in Quebec, you will be charged GST & TVQ
If your supplier is located outside of Quebec, you will be charged GST only

The Ontario Government and its agencies pay HST (13%) effective July 1, 2010.
Ontario 8% PST continues to be charged on insurance. This PST is NOT recoverable.

CRA Place of Supply Rules: http://www.cra-arc.gc.ca/E/pub/gm/b-103/b-103-e.pdf
CRA Rate Table  http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rts-eng.html#rt
Quebec QST Information: http://www.revenuquebec.ca/en/entreprise/taxes/tvq_tps/

 

 

Frequently Asked Question

Q. I am using the HST regular method and forgot to claim the HST on a purchase, what do I do?

A. Add the amount to line 108 of your next HST return. You have up to four years to claim input tax credits.


Historical Rates

13% – July 1, 2010 (Ontario)
5% – January 1, 2008 to June 30, 2010
6% – July 1, 2006 to December 31, 2007
7% – January 1, 1991 to June 30, 2006