{"id":9838,"date":"2021-07-22T09:25:08","date_gmt":"2021-07-22T09:25:08","guid":{"rendered":"https:\/\/accountingtoronto.ca\/staging\/?p=9838"},"modified":"2023-02-21T12:39:13","modified_gmt":"2023-02-21T12:39:13","slug":"gst-hst-for-business-and-self-employed-individuals-101","status":"publish","type":"post","link":"https:\/\/accountingtoronto.ca\/staging\/gst-hst-for-business-and-self-employed-individuals-101\/","title":{"rendered":"GST\/HST for Business and Self-employed Individuals 101"},"content":{"rendered":"\n

GST\/HST is an integral part of running a business, and not understanding the rules surrounding sales tax can be damaging for your business. Self-employed Canadians and businesses should be aware that they might need to register for a GST\/HST account<\/strong> and start remitting sales tax <\/strong>to the CRA.<\/p>\n\n\n\n

<\/div>\n\n\n\n

What is the Difference Between GST, HST and PST<\/strong>?<\/h3>\n\n\n\n

There are three different types of sales tax in Canada:<\/p>\n\n\n\n

    \n
  1. GST (Good and Services Tax)<\/strong><\/li>\n\n\n\n
  2. PST  (Provincial Sales Tax)<\/strong> – In Manitoba, PST is also known as RST while in Quebec, it is known as QST<\/li>\n\n\n\n
  3. HST (Harmonized Sales Tax)<\/strong> – HST is a combination of PST and GST. From the chart below, provinces and territories who collect HST, don\u2019t collect GST and PST separately.<\/li>\n<\/ol>\n\n\n\n

    Below is a chart that composes all the different sales tax and their specific rates in each province and territory:<\/p>\n\n\n\n

    <\/div>\n\n\n
    \n
    \"GST\/HST<\/figure><\/div>\n\n\n
    <\/div>\n\n\n\n

    GST\/HST<\/strong><\/h2>\n\n\n\n
    <\/div>\n\n\n\n

    How do I know if I Need to Charge GST\/HST?<\/strong><\/h3>\n\n\n\n

    For most businesses, GST and HST apply to most goods and services. <\/strong>GST applies to real property<\/strong> (land, building) and intangible property<\/strong> (trademarks, patents). These are known as taxable supplies<\/a><\/u><\/strong>.<\/p>\n\n\n\n

    However, some goods and services are exempt from GST\/HST<\/strong> and are known as exempt supplies<\/a><\/u><\/strong>. There are also goods and services that have a GST\/HST rate of 0%,<\/strong> they are known as zero-rated supplies<\/a><\/u><\/strong>.<\/p>\n\n\n\n

    Once, you have established whether your goods and services are taxable, exempt or zero-rated supplies. You can now determine if you need to start charging GST\/HST<\/strong> and remitting it to the CRA by filing a GST\/HST return.<\/strong><\/p>\n\n\n\n

    At SDG Accountant, our accountants can determine whether or not your business is required to charge GST and HST! We assist in filing GST\/HST returns as well. For more information, admin@sdgaccountant.com<\/a><\/strong> for assistance or schedule a free consultation<\/a><\/u>.<\/strong><\/p>\n\n\n\n

    <\/div>\n\n\n\n

    What is the Difference Between Taxable, Exempt and Zero-Rated Supplies?<\/strong><\/h3>\n\n\n
    \n
    \"GST\/HST\"<\/figure><\/div>\n\n\n

    The significant difference between them is their entitlement to input tax credits<\/a><\/u><\/strong> which will be explained in the following section.<\/p>\n\n\n\n

    <\/div>\n\n\n\n

    What are Input Tax Credits (ITC) and Why are They Useful?<\/strong><\/h3>\n\n\n\n

    When filing your GST\/HST return, your business can claim a sum of GST\/HST paid on purchases and expenses for your business<\/strong>. These are known as input tax credits (ITC)<\/a><\/strong> and are extremely useful!<\/p>\n\n\n\n

    The only purchases and expenses which your business cannot claim ITC<\/strong> are:<\/p>\n\n\n\n