Do I Have to Charge HST/GST?

Are you worried about the tax implications of your business & the rules of HST/GST can be complicated to understand, so let us break it down for you.

Below is the break down of the current tax rates varies per province.

✓ New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island have 15% HST.

✓ Alberta, British Columbia, Manitoba, Quebec, Saskatchewan, Northwest Territories, and Yukon have 5% GST .

✓ Ontario has 13% HST.

• It Depends on the Business.

Whether you have to charge GST/HST depends on the type of business you’re running. Charging/collecting GST/HST isn’t mandatory for all self-employed individuals. The CRA categorizes goods and services into three distinct groups as follows:

✓ Exempt: GST/HST is not charged/collected and you typically cannot claim any tax credits (ITC) for GST/HST paid. Examples of exempt supplies include: medical and dental services, child care services, music lessons, non-profits, and educational services.

✓ Taxable: GST/HST is charged/collected and tax credits may be claimed for GST/HST paid to produce your goods/services. Examples of taxable supplies include: advertising, hotel accommodation, legal and accounting services, and most products.

✓ Zero-rated: GST/HST is not charged/collected. However, you may still be able to claim tax credits (ITC) for GST/HST paid to produce your goods/services. Examples of zero-rated supplies include: most groceries, agricultural products, medical devices, and prescription drugs.

Once you are required to collect GST/HST, proper bookkeeping becomes vital to avoid consequences. At Waterdown Bookkeeping and Accounting, we help take away the stress of bookkeeping so you can focus on what you do best.

For more information contact us now!