Whether you live in Canada or outside of it, you should know about the Harmonized sales tax. This tax is a tax on the sale of goods and services that applies to employees as well as employers. It is a consumption tax that is administered by the Canadian Revenue Agency.
Canadian Revenue Agency administers the HST
Among the federal government’s major taxes, the Harmonized sales tax is a value added tax that is applied to taxable goods and services in Canada. The tax is administered by the Canadian Revenue Agency (CRA) and consists of a provincial and federal component. The tax is used to fund input tax credits for businesses. The tax applies to all types of goods and services.
The Harmonized sales tax is administered by the federal government and has a combined rate of 13 per cent. It is based on the same legislation that governs the federal GST. The tax is applied to most goods and services that are purchased in Canada.
The federal government signed agreements with Newfoundland and Labrador and Nova Scotia to ensure that they use the same tax base. This allows consumers in those provinces to avoid paying both the provincial and federal tax on the same item. There is also a formula for sharing the revenue with the HST participating provinces.
For vendors, the GST/HST system is administered by the CRA. The agency processes applications, collects the tax, and remits it to the appropriate government agency. Those with taxable revenue above $30,000 must register for GST/HST.
The Excise and GST/HST Rulings and Interpretations Service provide information on the law. The CRA has also published service standards on technical GST/HST issues. These service standards include filing requirements and deadlines. The CRA publishes a newsletter, Excise, and GST/HST News, to keep the public informed of legislative changes. The information in the publication covers the latest developments in the administration of the Excise and GST/HST taxes.
There are also special rules for certain cases. For example, individuals who buy a newly constructed house may be eligible for the RST Transitional New Housing Rebate.
It does not apply to sales of goods or services outside of Canada
Generally speaking, a Harmonized sales tax is a value added tax imposed on goods and services by the federal government. It is collected by the Canada Revenue Agency and remitted to the participating provinces. Depending on where in Canada the sale takes place, the rate of the tax will vary.
Unlike VAT, which is a tax on the goods itself, GST is a tax on the service. It is calculated as a percentage of the cost of the sale. It is added to the goods at the point of sale. Some goods are exempt from the tax.
A GST/HST credit is available to businesses that do business in Canada. These credits to offset the costs of the HST. Typically, these credits are issued in quarterly installments. They are based on the costs of doing business in a previous year.
There are many supplies of a public service nature, that are exempt from the tax. These include supplies of health related services and used housing. These types of supplies are also referred to as zero rated supplies.
An input tax credit is a rebate provided by the federal government for businesses that do business in Canada. These credits are awarded to persons who produce zero rated supplies. They are similar to the input tax credit for HST.
A small supplier is an individual who has sold no more than $30,000 worth of goods in the past four quarters. This is one of the largest incentives provided by the government.
A small supplier is defined in the Excise Tax Act as an individual that does not have a total sales turnover of more than $300,000 in a calendar year. The effective date of this exemption will vary depending on when the business no longer qualifies.
It generates $215 million in revenue every year
Despite its lack of popularity, the Ontario sales tax is a legitimate revenue generator. Its revenue would support infrastructure renewal and help the province’s economy grow. Unlike its counterpart in the other province, Ontario’s sales tax does not apply to the financial services sector.
In a nutshell, the Ontario sales tax is the HST. The new tax would generate $215 million in revenue for the coming fiscal year, according to the Ministry of Finance. This is in addition to the hefty $1.5 billion in revenue the province has already received from the federal government. As well, the province has signed sales tax harmonization agreements with the provinces of Quebec and Nova Scotia. These arrangements allow the province to make payments to the other provinces without any further appropriation from Ottawa.
The province’s total budget is expected to be $187.0 billion in the coming fiscal year. The budget includes a number of measures to stimulate the economy. The province will also take advantage of unused contingency funds to shrink its debt position. Among the measures are a zero-rate GST for selected industries and a revamped sales tax system.
Those wishing to get the most from their tax dollar should consider a hybrid tax system in which a portion of the income generated by the sales tax is returned to the taxpayer in the form of a rebate. The resulting tax rate would be about 0.5 percent. The revenues would be roughly equal to the current tax rate and the system would be revenue neutral. The budget does not propose changes to the current tax structure, but the province is considering changes to the tax system in the near future.
It is a consumption tax
Currently, five provinces in Canada have implemented the harmonized sales tax, which is a combination of the federal goods and services tax (GST) and provincial sales tax. These provinces include: Ontario, Quebec, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island.
The harmonized sales tax is administered by the Canada Revenue Agency and is collected by businesses. It is applied to the same base of goods and services as the federal GST. In addition, the federal government collects and distributes the appropriate amounts to participating provinces. The tax is also applied to the proportional interest in a vehicle.
The Harmonized Sales Tax was created to combine the provincial and federal taxes, as well as to allow the provincial governments to levy a single tax on a broad range of goods and services. It applies to all goods and services that are taxable under the Excise Tax Act (Canada) and the provincial taxes.
There are certain exemptions for purchases, which are available to consumers. Some examples of these exemptions are long-term rentals of residential accommodation, educational services, health care services, and legal aid services. In the past, there was a point-of-sale rebate available to people who buy qualifying property in British Columbia.
The federal Conservative government undertook a study to decide whether to transfer PST to consumers. Some Liberals opposed the idea, arguing that the transfer of PST would disadvantage BC businesses and promote exportation. In the end, a referendum was held. In the end, voters decided that the conversion of the tax system to PST/GST was the best course of action.
On July 1, 2010, the harmonized sales tax went into effect in British Columbia. The tax was originally set at 3% but later rose to 7%. The province’s net HST revenue is expected to be $410 million more than the revenue generated by the PST. The government argues that this money will be returned to residents through personal income tax reductions.
It applies to employee benefits
Unlike the BC PST the HST will not sneeze you out of your wallet. It may be a relic of yore, but that is not to say that it has not been around for many years. The best part about the HST is that it isn’t just about you and your business. The most notable exception is your competitors. After all, is your customer base as hot as they were in the heyday of the good ol’ days? For this reason alone, the HST will not sneeze your customers out of their wallets. The HST isn’t the only obstacle for you, but it will be your biggest boobie thorn. The best way to tackle this challenge is to educate yourself on the subject. The most effective course is to read up on the best way to woo your employees.
