Entrepreneurship & Small Business

Ask me your GST/HST (and maybe PST and QST) questions!

  • Last Updated:
  • Jun 23rd, 2017 8:39 am
Tags:
Sr. Member
User avatar
Jan 1, 2009
782 posts
130 upvotes
Vancouver
BlueMorpho1 wrote:
Jan 16th, 2016 2:40 pm
Thanks.

now in the case of having not charged it on shipping (my error, I thought you didn't need to), do I just self assess?
Unless the uncollected tax on shipping is material, I would start charging the GST/HST on the freight going forward.

You can always file an amended GST/HST return to report the uncollected tax if the missed amount is however material. Section 224 of the Excise Tax Act allows you to go after the customer and even sue them to recover the missed tax once you do report the uncollected tax on an amended GST/HST return, and make the remittance. It is more common practice to remit the missed amount out of your own profit and be done with it.

Sources:
Right of supplier to sue for tax remitted
http://laws-lois.justice.gc.ca/eng/acts ... ml#docCont
Newbie
Jul 28, 2012
26 posts
6 upvotes
EDMONTON
Im new to this and really need some basic tips on recording transactions.
If I run a business, and want to expense a client meal, how would I go about in doing this?

The meal was $100, tax was $10, and tip was $20, for simplicity.
Im trying to record it such that $5 tax is booked to "GST PAID ON PURCHASES" to remit to CRA at the end of my reporting period.

DR Meals & Entertainment, $125
DR GST Payable $5
CR Cash $130

Is this correct? How would I do this in QuickBooks?
Member
Jun 6, 2008
297 posts
30 upvotes
Hi
I have a corporation in Ontario. I am a director and a shareholder.
Can I claim the premiums i pay for my life insurance as an expense?
Sr. Member
User avatar
Jan 1, 2009
782 posts
130 upvotes
Vancouver
mykoolspam wrote:
Jan 25th, 2016 1:42 am
Im new to this and really need some basic tips on recording transactions.
If I run a business, and want to expense a client meal, how would I go about in doing this?

The meal was $100, tax was $10, and tip was $20, for simplicity.
Im trying to record it such that $5 tax is booked to "GST PAID ON PURCHASES" to remit to CRA at the end of my reporting period.

DR Meals & Entertainment, $125
DR GST Payable $5
CR Cash $130

Is this correct? How would I do this in QuickBooks?
You would journalize the actual amounts (i.e Dr. $10 GST/HST, Dr. $120 for meal, Cr. Cash). You would only be able to claim 50% ITC for the GST or HST paid or payable on meals and entertainment. The CRA allows persons to claim 100% of the ITCs from meals and entertainment for the tax year, then do a catchup adjustment to their ITCs on the next quarterly period of the new year to take out 50% of their ITCs from meals.

You can choose one of the following two ways to calculate your ITCs for meals and entertainment expenses:

You can claim 100% ITCs for these expenses throughout your fiscal year. If you file monthly or quarterly GST/HST returns, add the 50% adjustment for the excess ITCs you claimed during the year to your net tax calculation for the first reporting period after the end of your fiscal year.

If you file annually, add the 50% adjustment to your net tax calculation for that fiscal year. Enter the adjustment on line 104 of your GST/HST return.
You can claim 50% of the actual GST/HST you pay on these expenses during each reporting period. By choosing this method, you do not have to make any adjustments at the end of your fiscal year.


http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... s-eng.html
Sr. Member
User avatar
Jan 1, 2009
782 posts
130 upvotes
Vancouver
hello2adi wrote:
Feb 1st, 2016 4:31 pm
Hi
I have a corporation in Ontario. I am a director and a shareholder.
Can I claim the premiums i pay for my life insurance as an expense?
Depends on your policy. CRA has a lot of ITA interpretations with some policies deductible, not deductible, and others that trigger taxable benefits on your T4 slip prepared by your corporation to report your salaries and taxable beneits. This link actually has a nice summary of what type of policies are deductible, non-deductible, and may result in a taxable benefit. PDF page 11 has a great summary:

https://www.sunnet.sunlife.com/files/ad ... ctible.pdf

Also, insurance is GST/HST exempt (provinces generally charge a provincial sales tax however), so you can't claim any GST/HST ITCs on insurance (vehicle, professional, liability, or life insurance).
Newbie
Jan 17, 2013
10 posts
1 upvote
Toronto
How long does it typically take to receive your GST/HST refund? Are there specific cheque run dates? It's been close to three weeks for my business now and we could really use the money to invest in prototypes!

I hope it's not undergoing an audit. I don't have the time or money to organize all my supporting documentation or hire an accountant to do all the work for me!!
Deal Addict
Dec 12, 2009
2256 posts
690 upvotes
Toronto
Question on Ontario HST 8% on telecommunications.

Looking at my phone bill there is a line that says: "An Input Tax Credit (ITC) restriction may apply to the Ontario provincial component of the HST on Telecommunication Services."
When I try to look it up I found this: http://www.cra-arc.gc.ca/E/pub/gi/gi-171/gi-171-e.html

I don't speak "tax speak". What I get from this is that the phasing out of ITC's only applies to large businesses with sales of >$10 million. As a small business with much lower sales do I have to worry about this or not? In other words can I just claim all my ITC's as they are or am I going to have to phase them in according to the chart "Phase-out of RITCs in Ontario" in the above link.
Newbie
May 24, 2017
4 posts
C store with large percentage of income from OLG lottery commission (no HST). After calculating all the expenses and income, turns out the government need to return thousands dollars of HST. Would the work and make sense? How? Thank you.
Deal Fanatic
User avatar
Nov 19, 2004
7142 posts
906 upvotes
Cambridge, ON
CindyG11100528 wrote:
May 25th, 2017 7:12 pm
C store with large percentage of income from OLG lottery commission (no HST). After calculating all the expenses and income, turns out the government need to return thousands dollars of HST. Would the work and make sense? How? Thank you.
Whatever hst you paid on goods and expenses are claimed as ITCs. Whatever you sell where HST is charged, that HST must be submitted.

If you have been paying instalments, it just might mean sales were not as good as last year so you overpaid the instalments. Look at the overall picture for the year and compare hst submitted and your ITCs. I assume overall you are submitting more than you get back?
Newbie
May 24, 2017
4 posts
don242 wrote:
May 26th, 2017 8:37 am
Whatever hst you paid on goods and expenses are claimed as ITCs. Whatever you sell where HST is charged, that HST must be submitted.

If you have been paying instalments, it just might mean sales were not as good as last year so you overpaid the instalments. Look at the overall picture for the year and compare hst submitted and your ITCs. I assume overall you are submitting more than you get back?
Thanks for your response. Took over the business a year ago, so it was the first time file the tax. I did submit more HST than I got back, as rent, hydro and other utilities spending are all taxable. Will it make sense to CRA that I should have thousands dollars of HST returned? It will put me in high risk for a review, is that right?
Deal Fanatic
User avatar
Nov 19, 2004
7142 posts
906 upvotes
Cambridge, ON
CindyG11100528 wrote:
May 26th, 2017 9:18 am
Thanks for your response. Took over the business a year ago, so it was the first time file the tax. I did submit more HST than I got back, as rent, hydro and other utilities spending are all taxable. Will it make sense to CRA that I should have thousands dollars of HST returned? It will put me in high risk for a review, is that right?
Considering it is the first year, it can make sense if you are paying the instalments based on your sales without considering the expenses. I wouldn't worry about it if everything is in good order.

It is probably one of those things you should sit down with your accountant once and just review. There are different ways to do your instalments and maybe one makes more sense so that you aren't paying as much upfront.
Deal Addict
Jan 7, 2014
1925 posts
285 upvotes
Hi, Does the GST HST fiscal year end has to be the last day of the month?
I registered my incorporation in mid July 2016 so trying to keep the corporate fiscal year end as 15 July 2017.
GST HST fiscal year is currently set to end at 30 June 2017. Can I make that 15 July 2017 as well.....
Member
Jun 25, 2011
278 posts
101 upvotes
Alberta
Asker123 wrote:
May 29th, 2017 11:50 am
Hi, Does the GST HST fiscal year end has to be the last day of the month?
I registered my incorporation in mid July 2016 so trying to keep the corporate fiscal year end as 15 July 2017.
GST HST fiscal year is currently set to end at 30 June 2017. Can I make that 15 July 2017 as well.....
You can choose whatever day you want for GST/HST fiscal year.
Deal Addict
Jan 7, 2014
1925 posts
285 upvotes
albertaguy wrote:
Jun 2nd, 2017 9:55 pm
You can choose whatever day you want for GST/HST fiscal year.
Ok thx....is it crazy idea to.keep mid of a month a corporate tax fiscal year end?
I strated my corporation in mid july last year.
The gst hst fiscal year was defaulted to 31 dec 2016
My accountant called cra and moved it to 30 june 2017
Idea was that we will.keep 30 june as corporate fiscal year end.
Now if i ask him to move the gst hst year to 15 july , he will get pissed off...
Newbie
May 10, 2017
13 posts
Hi,
I live in Quebec, and thinking of incorporating my company either in quebec or ontario (I did not do it yet). I want to do an online store to sell stuff online using dropshipping (buying things from china and resell it using my online website). I am going to charge a bit more to cover my tax expense, but let's say I sell to clients in Canada, USA, and internationally.

Do I have to charge them taxes if they are outside of Canada? Do I have to claim that to the government? Are there any taxation rules for online stores if we sell to canada or outside of canada?

What about Affiliate marketing? where I only get a commission for the products I refer clients to (say 50% commission for every sale I help the seller make) if I am just advertising their product for them but do not sell them any products myself?

It is very much appreciated :)

Top