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How GST/HST worksOn this page ...
If you are involved in commercial activities in Canada, you may have to register for GST/HST. If you are a registrant, you have to collect GST/HST from your customers and remit it to us. You can claim input tax credits (ITCs) to recover the GST/HST you pay or owe on purchases and operating expenses you use, consume, or supply in your commercial activities. For example, if you buy taxable goods to resell in your store, you can recover the GST/HST you paid on those goods by claiming an ITC. You cannot claim an ITC to recover the GST/HST you paid or owe on purchases related to supplies of exempt goods and services, or those for personal use. If you are a GST/HST registrant, you have to send us a GST/HST return at regular intervals. When you complete your return, deduct your ITCs from the GST/HST you charged or collected from your customers. This includes the GST/HST you charged on all goods and services during a reporting period, even if you have not collected the tax. If the GST/HST you charged or collected from your customers is more than your ITCs, send us the difference. If it is less, claim a refund. The difference between what you charged or collected from your customers and what you paid or owe on your business purchases is your net tax. If you qualify to claim a rebate (such as the public service bodies' rebate or the rebate on printed books), deduct that amount from your net tax. For more information on rebates, see "Public service bodies' rebate". Types of goods and servicesFor GST/HST purposes, there are three types of goods and services:
Goods and services taxable at 6% or 14%Most goods and services supplied in Canada are subject to GST/HST at the rate of 6% or 14%. As a registrant, when you supply these goods and services, you usually have to charge GST/HST to your customers. You can claim ITCs for the GST/HST you pay or owe on purchases for use in your commercial activities. Examples of goods and services taxable at 6% or 14% include the following:
Goods and services taxable at 0% (zero-rated)A limited number of goods and services are taxable at the rate of 0%. They are called zero-rated. As a registrant, when you supply zero-rated goods and services, you do not charge GST/HST to your customers, but you can claim ITCs for the GST/HST you paid or owe on purchases you made for use in your commercial activities. Examples of zero-rated goods and services include the following:
Exempt goods and servicesSome goods and services are not subject to GST/HST and have been designated as exempt. You do not charge GST/HST when you supply exempt goods and services, and you cannot claim an ITC for the GST/HST you pay or owe on purchases that relate to the supplies of such goods and services. However, as explained in the section "Public service bodies' rebate", certain qualifying non-profit organizations can claim a rebate for part of the GST/HST paid on expenses for which they cannot claim ITCs. In addition, you cannot register for GST/HST if you supply only exempt goods and services. Examples of exempt goods and services include the following:
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