Consumption Taxes (GST/HST/QST)

In Canada, consumption taxes exist at the federal and provincial levels. At the federal level, the Goods and Sales Tax (“GST”) is a tax that applies to the supply of most property and services in Canada.  Some provinces are participating, meaning their provincial sales tax is harmonized with the GST to create the Harmonized Sales Tax (“HST”). Generally, the HST applies to the same base of property and services as the GST. Quebec administers its own consumption tax, Quebec Sales Tax (“QST”), which is similar to the GST. Other provinces (excluding Alberta) also have their own consumption tax which is not HST, but rather is charged based on the type of supply and service provided.

Businesses are generally responsible for collecting and remitting these taxes to the taxation authorities. Businesses that are required to have a GST/HST and QST registration number are called registrants.  Registrants collect the GST/HST and QST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim an input tax credit to recover the GST/HST and QST paid or payable on the purchases they use in their business activities.

In certain industries, services and goods are exempt from GST/HST and QST, while others are considered zero-rated. A meeting with Ivan can help you determine if you fall under these categories. Certain industries have different rules applied (i.e. garment) with relation to these taxes as do the threshold limits for registering.

Ivan can assist you in filing your monthly, quarterly or annual GST/HST and QST returns. He can also assist you in registering for numbers (becoming a registrant), explain the specific exclusions of claiming input tax credits, and how to set-up your accounting system to capture the related taxes paid and charged to customers.

(For further info please refer to Tax Center under GST/HST and QST Number Validation)