|
|
|
GST/HST Rate Reduction
Effective January 1, 2008, the GST rate for all transactions
was reduced from 6% to 5%. Please note that if you conduct business with an HST participating province
Nova Scotia, New Brunswick and Newfoundland & Labrador), the federal component of the HST has also been reduced. This reduction
means that the HST rate will be reduced from 14% to 13%.
|
If GST/HST becomes payable on or after January 1, 2008, without having been paid before that day, the
5% GST rate or
the 13% HST rate will apply.
If GST/HST is paid on or after January 1, 2008,
without having become payable before that day, the 5% GST rate or
the 13% HST rate will apply.
If GST/HST becomes payable or is paid before
January 1, 2008, the 6% GST rate or the 14% HST rate will apply.
|
Please note that the rules governing the use of the Quick
Method for remitting GST/HST and the Simplified Method for claiming ITC’s has
not changed. Only the calculation rates have changed as follows:
Quick Method of Accounting to Remit GST/HST
| |
All non-participating provinces |
Participating provinces
(NB, NS, NF) |
| |
Old Rate |
New Rate |
Old Rate |
New Rate |
| Sales including GST less than $30,000 |
3.3% |
2.6% |
10.0% |
9.5% |
| Sales including GST greater than $30,000 |
4.3% |
3.6% |
11.0% |
10.5% |
Simplified Method for Accounting for ITC’s
Effective January 1, 2008, follow the same procedure as
before, but now:
If you use electronic equipment such as registers or Point
of Sale systems to calculate GST/HST on your sales, you must ensure that the GST/HST
rates are updated to be effective January 1, 2008. If you fail to do so, you will
have to reimburse your client and make all the changes manually. If you collect
the 6% rather than the 5% in error, you will have to remit the 6%.
If you are using bookkeeping software like QuickBooks or
Simply Accounting to record and calculate GST/HST, make sure you have adjusted
the default tax rates to reflect the new GST/HST rates.
For additional information on the rate changes, please
review the information provided on the Canada Revenue website
at:
www.cra-arc.gc.ca/E/pub/gi/notice226/notice226-e.pdf.
The Canadian Federation of Independent Business also provides a
useful checklist for the GST at:
www.cfib.ca/research/businfo/pdf/din0613.pdf.
If you have any other questions on the above procedures,
please contact our office for assistance.
|
|
