If you are a business owner in Canada, one of your responsibilities is to charge and collect the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) on the products or services you sell. In this article, we will discuss the basics of GST/HST and how much you need to charge.
What is GST/HST?
GST/HST is a value-added tax that is levied on most goods and services in Canada. It is a tax that is added to the price of the product or service, and it is ultimately paid by the end consumer. GST is a federal tax, and HST is a combination of GST and provincial sales tax. The HST is collected in provinces that have merged their provincial sales tax with the GST, such as Ontario, New Brunswick, and Nova Scotia.
How much GST/HST do I need to charge?
The amount of GST/HST you need to charge depends on the province where your business is located. The GST rate is 5%, and the HST rates range from 13% to 15%, depending on the province. The following table shows the HST rates in different provinces:
|Newfoundland and Labrador||15%|
|Prince Edward Island||15%|
For example, if your business is located in Ontario, you need to charge 13% HST on the products or services you sell. This means that if you sell a product for $100, you would charge an additional $13 in HST, making the total price $113.
It’s essential to note that not all products and services are subject to GST/HST. Some goods and services are exempt, zero-rated, or subject to special rules. For example, basic groceries, prescription drugs, and medical services are generally exempt from GST/HST.
As a business owner in Canada, it’s your responsibility to charge and collect GST/HST on the products and services you sell. The amount of GST/HST you need to charge depends on the province where your business is located. You should ensure that you are charging the correct amount of GST/HST and following all the rules and regulations to avoid any penalties or fines.