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what is the gst/hst?

Goods and services tax (GST) - a tax applies to most supplies of goods and services made in Canada.

The harmonized sales tax (HST) - is implemented in participating provinces where GST is harmonized with their provincial sales tax.

Who has to register for a gst/hst account

GST/HST registrants have to collect the GST/HST on all taxable supplies of property and service they provide to their customers.

You have to register for a GST/HST account if both situation apply:

  • You make taxable sales, leases, or other supplies in Canada
  • You are not a small supplier

If you provide exempt supplies only, you cannot register for a GST/HST account.

how does the gst/hst work

If you are a GST/HST registrant, you have to 

  • charge and collect the GST/HST on taxable supplies you make in Canada, and
  • file regular GST/HST returns to report that tax

You can claim Input Tax Credits (ITCs) on your GST/HST return to recover the GST/HST paid or payable on purchases and expenses to the extent you use, consume, or supply them in your commercial activities. 

You can deduct your ITCs from the GST/HST you charged your customers when you complete the GST/HST return. The result is your net tax.

US & Canada Tax - Lily Lo CPA Professional Corporation - Edmonton, Alberta

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