Goods and Services Tax (GST) is a value-added tax levied by the federal government. The combined Harmonized Sales Tax (HST) is also a value-added tax, a single, blended combination of the PST and GST.
HST is used in provinces where both the federal goods and services tax (GST) and the regional provincial sales tax (PST) have been combined into a single value added sales tax.
GST/HST applies to most supplies of good and services made in Canada. The basic rule regarding charging GST/HST is the place of supply rules for services.
Non-residents who carry on business in Canada must register for the GST/HST if they make taxable supplies in Canada and are not small suppliers. A non-resident person is not necessarily considered to be carrying on business in Canada for income tax purposes simply because that person is considered to be carrying on business in Canada for GST/HST purposes.
Likewise, a person who is considered to be carrying on business in Canada for income tax purposes is not necessarily considered to be carrying on business in Canada for GST/HST purposes.
The quick method is another accounting option available to help small businesses calculate their net tax for GST/HST purposes. This method reduces paperwork and makes it easier to calculate GST/HST remittances and file GST/HST returns because it eliminates the need to report the actual GST/HST paid or payable on most purchases.
Developers are affected by GST/HST in the same way as all other businesses making taxable supplies and must be mindful of the cash flow effects of GST/HST. They must register, collect, and remit GST/HST on all taxable supplies and are entitled to claim input tax credits for the GST/HST payable on all related purchases of property and services.
Rents paid under commercial leases are subject to GST/HST. Accordingly, like other businesses making taxable supplies, commercial landlords register for GST/HST purposes, collect and remit the tax on all commercial rents, and are entitled to claim input tax credits for the GST/HST paid on all related purchases of property and services.
Purchasers of new houses for occupation by them as residences are eligible for the new housing rebate.
Contact us to get your GST/ HST right
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