HST vs. GST/PST

BC switched the taxing system once again. First, we’ve had PST (for Provincial Sales Tax) and GST (Government Sales Tax). GST is the same for all provinces, 5%; and PST varies from province to province. Some provinces have HST (Harmonized Sales Tax), which is a combination of the two. We’ve had HST in BC since May 2010, and switched back to GST/PST again as of today. 

The switch works somewhat like that: if you already made a partial payment before March 31st, 2013, HST will apply. For any new purchases, you will pay GST/PST. For exchanges, HST will not be issued. For returns, you will get back as much tax as you have initially paid.

It also means that you are not getting a quarterly HST credit cheque from the Government. Some groceries, prescription drugs and most farm livestock are tax exempt, which means you are paying less for your milk, tomatoes and Ritalin. If you are a business-owner or self-employed, you will need to spend a little (okay, maybe way more than a little) time to adjust your data and bookkeeping entries. Instead of paying a flat 12% (or proposed 10%, which was declined), you will need to determine whether the good/service is taxable or not, and adjust accordingly.

By the way, if you make less than $35,000 a year, you will continue to receive quarterly GST credit cheques (smaller amount than HST credit, obviously). In order to apply for the credit, you need to file your tax return (even if you have no income to report).

On the topic whether the goods/services are tax-exempt see:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/menu-eng.html

#HST in BC#Simple Vancouver#simplevancouver#tax in BC

Comments

  1. chrom - April 23, 2013 @ 9:18 AM

    keeping HST would be so much more convenient

    • Simple Vancouver - October 1, 2013 @ 12:14 PM

      don’t even et me started on that….

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