In Canada, value-added taxes are structured in several different ways. Some provinces/territories use a combination of GST and PST while others have adopted the newer HST. The HST uses a value-added tax structure that will allow most businesses to claim input tax credits (ITC) on the HST paid which is a higher rate than GST (12%, 13%, 14% or 15% depending on the province/territory). This is unlike the PST which applies to many purchases made by a business and is not refunded, leaving the PST embedded in the price of the finished goods and services as a sunk cost to the business. One of the purposes of the HST is to take away the hidden tax as well as lower administrative costs incurred by businesses.
While it is not mandatory for most businesses to register and collect HST until 29 days following the single calendar quarter or four consecutive calendar quarters in which they first exceed worldwide sales of $30,000, we generally recommend that any business register as soon as possible. We can:
- Plan for your HST/GST liability/refund
- Interpret the legislation & advise you on the current trends in the court decisions
- Prepare your Business Activity Statements
As always, it is up to you to decide to do the work the easy way or the hard way. In any case, we are always available to answer your questions. Feel free to contact us by e-mail or telephone at 519-229-6320