Entrepreneurship & Small Business

Taxes for small business and Input Tax credits

  • Last Updated:
  • Apr 30th, 2011 7:26 am
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[OP]
Jr. Member
Feb 26, 2007
101 posts
11 upvotes

Taxes for small business and Input Tax credits

Hi there,

I run an online business. I import stock from overseas and pay GST on some shipments that enter Canada. I sell products to all provinces and charge the appropriate taxes based on the province i am shipping to. The customer pays the taxes on the product final price and also pays taxes on the shipping. I then via online with Canada Post order a shipping label which i pay using a credit card. Canada Post sometimes charges me GST and sometimes charges me HST (for this i am not sure and i will be contacting them to find out why they are doing this).

Do these qualify as Input Tax Credits?

- Paying import taxes on goods i sell online
- Paying taxes to Canada Post for online shipping labels
- Paying taxes on office equipment and consumables (printer paper, ink, computer equipment) which i use for my business.
8 replies
Member
Apr 19, 2010
239 posts
44 upvotes
GTA
basslion wrote:
Apr 25th, 2011 11:33 am
...
Do these qualify as Input Tax Credits?

- Paying import taxes on goods i sell online
- Paying taxes to Canada Post for online shipping labels
- Paying taxes on office equipment and consumables (printer paper, ink, computer equipment) which i use for my business.
1) YES (since you are the importer/retailer and will be using them in the course of commercial activities (i.e. selling them); see P-125)
2) YES---as they are reasonable business expenses
3) YES---as they are reasonable business expenses
Deal Addict
User avatar
Jun 5, 2004
1797 posts
103 upvotes
I think the rate of GST or HST that Canada Post charge on the shipping labels is based on the destination you are sending to. Eg. ON 13%, BC 12%, Alberta 5%.
Newbie
User avatar
Sep 27, 2010
75 posts
3 upvotes
Parkhill, ON
Tax on Canada Post shipping is based on destination province


PEI - 5% GST
Newfoundland - 13% HST
Labrador - 13% HST
Nova Scotia - 15% HST
New Brunswick - 13% HST
Quebec - 5% GST
Ontario - 13% HST
Manitoba - 5% GST
Saskatchewan - 5% GST
Alberta - 5% GST
British Columbia - 12% HST
Yukon, NWT - 5%
[OP]
Jr. Member
Feb 26, 2007
101 posts
11 upvotes
Why is this, i dont understand it really. I make the purchase for a service and i am in Ontario so they should charge me as im the customer HST 13%. The customer who is receiving the parcel is not paying for the label.
Newbie
User avatar
Sep 27, 2010
75 posts
3 upvotes
Parkhill, ON
basslion wrote:
Apr 26th, 2011 10:17 am
Why is this, i dont understand it really. I make the purchase for a service and i am in Ontario so they should charge me as im the customer HST 13%. The customer who is receiving the parcel is not paying for the label.

But the actual service is being performed in the province it is being delivered in and thats why. And really your customer should be paying the HST or GST in there purchase price to you so you get it back to a certain degree.
jeff
Deal Addict
Dec 28, 2006
2373 posts
62 upvotes
Saskatoon
basslion wrote:
Apr 26th, 2011 10:17 am
Why is this, i dont understand it really. I make the purchase for a service and i am in Ontario so they should charge me as im the customer HST 13%. The customer who is receiving the parcel is not paying for the label.


http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... g-eng.html
Conquistador wrote:
May 20th, 2010 2:57 pm
One other thing you should know for future reference. If it is on the subject of taxes, listen to ghostryder. He knows his stuff.
Banned
Apr 9, 2011
10 posts
UAE/Dubai
You can seek the services of a local tax consultant for clarification.

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