GST/HST
Preparing for the HST (see below for "Preparing the GST Return" instructions)
Effective date: Transactions dated July 1, 2010 or later
If you are currently registered for GST, then you are automatically registered for HST. The existing GST return will be used to report GST & HST transactions
Sales:
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 under additional information - CRA place of supply rules].
If your customer is located in a HST province (see below), you will charge the HST rate applicable to that province.
If your customer is located in a non-HST province (including Quebec), you will only charge GST (5%).
If your customer is located outside of Canada, you will not charge GST or HST.
Quebec companies: If your customer is located in Quebec, you will continue to charge GST & TVQ.
HST provinces:
Ontario (13%)
New Brunswick (13%)
Nova Scotia (15%)
Newfoundland (13%)
British Columbia (12%)
The Ontario Government and its agencies did not pay GST. However they must be charged HST (13%) starting July 1, 2010.
Purchases:
All suppliers who charged you GST @ 5% should now charge you HST @ 13% effective July 1, 2010.
Quebec companies:
You will continue to pay GST & TVQ if your supplier is located in Quebec, and you will pay GST only if your supplier is located outside of Quebec.
Additional Information:
http://www.intuit.ca/small-business-information/hst-provincial-tax.jsp [Intuit - Preparing for HST]
http://www.cfib-fcei.ca/cfib-documents/DIN0739.pdf [CFIB checklist]
http://www.cra-arc.gc.ca/E/pub/gm/b-103/b-103-e.pdf [CRA place of supply rules]
http://www.intuit.ca/small-business-information/new-hst.jsp [Intuit - HST Demystified]
Preparing the GST Return (for transactions up to June 30, 2010)
Summary
The Regular Method
The Quick Method
Blank GST Form (PDF)
Frequently Asked Questions
Returns can be mailed to:
CRA Tax Centre
PO Box 6000 Stn Main
Shawinigan-Sud QC
G9N 7W2
Summary
Companies must charge GST on most products and services sold in Canada. The current rate is 5%. [The rate was 6% from July 1, 2006 to December 31, 2007 and 7% prior to July 1, 2006]. Returns are normally filed quarterly. The return is due 30 days after the quarter end date.
The Regular Method
Complete the GST form as follows: QuickBooks users can obtain additional information here.
- Line 101 - sales for the quarter, excluding GST—based on invoices prepared, even if not paid
- Line 105 - GST charged to customers—based on invoices prepared, even if not paid
- Line 108 - GST paid on expenses and 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. Returns with NIL balances or refunds can be Netfiled (http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/gsthst-tpstch-ntfl/fl-eng.html) if there is an access code printed on your return.
- Line 115—If line 109 is positive, enter it again here. Prepare a cheque payable to the Receiver General. Many banks allow you to complete the return online and to make an electronic payment.
The Quick Method
This method is for businesses with annual sales less than $200,000. You must contact CRA if you wish to use this method. QuickBooks users can obtain additional information here.
Complete the GST form as follows::
- Line 101 - sales for the quarter, including GST—include only invoices where GST was charged
- Line 103 - GST charged to customers—based on invoices prepared, even if not paid
- Line 104 - the total on line 103 multiplied by 24.4%. When your annual sales exceed $30,000, add an additional $300 once per year
- Line 105 - Line 103 minus line 104
- Line 108 - GST 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. Returns with NIL balances or refunds can be Netfiled (http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/gsthst-tpstch-ntfl/fl-eng.html) if there is an access code printed on your return.
- Line 115—If line 109 is positive, enter it again here. Prepare a cheque payable to the Receiver General. Many banks allow you to complete the return online and to make an electronic payment.
Q. I am using the GST regular method and forgot to claim the GST back on a purchase, what do I do?
A. Add the amount to line 108 of your next GST return. You have up to four years to claim input tax credits.