Canada is divided into 10 provincial and 3 territorial areas. Accordingly, Canada’s Goods and Services Tax (GST) is classified into three parts: GST, HST, and Provincial sales tax (PST).
Classification of Canadian tax rates.
You need to have a complete understanding of GST rates and HST rebate calculator before you charge, and collect it from your clients. There are three taxes available in Canada: the Goods and Services Tax, the Provincial Sales Tax, and the Harmonized Sales Tax. Here is all you need to know.
GST (Goods and Service Taxes)
The Goods and Services Tax (GST) is a common sales tax levied on services and goods throughout Canada. GST of 5% is levied on almost all purchases in Canada unless you are selling exempt goods and services to consumers. You must collect and charge GST in all provinces where your business is located.
HST (Harmonized Sales Tax)
HST is a sales tax that combines the GST (Federal Goods and Services Tax) and the PST (Provincial Sales Tax). HST is a consumption tax levied at the point of sale. This tax adds a percentage of GST collected from customers. The HST program combines the federal GST with the provincial PST and aims to create a single rate that will increase uniformity and efficiency in sales taxes collection.
New Brunswick, Newfoundland & Labrador, Nova Scotia, Ontario, and P.E.I.(Prince Edward Island) are the provinces and territories that have agreed to participate in the HST scheme. Businesses that are part of the HST program must pay a single tax amount to the Canadian Revenue Agency, rather than dividing the tax amount between PST & GST. The Canada Revenue Agency (CRA), in exchange, will remit necessary funds to provincial governments on behalf of your business.
PST (Provincial Sales Tax)
Each province collects a provincial sales tax. This is a separate tax from the GST (Goods and Services Tax). Several provinces declined to join the HST scheme. GST and PST will need to be collected and remitted separately by these provinces.
The only provinces that still collect provincial sales tax (PST) are British Columbia, Manitoba, and Saskatchewan. The provincial sales tax in Manitoba is called the Retail Sales Tax, while it is known as the Québec Sales Tax (QST) in Quebec.
GST/HST Rebates on New Construction
After all other conditions have been met, the GST/HST home rebate allows an individual to claim a portion of either the GST or federal HST that was paid for a house that has been substantially renovated or built and is for use by the individual or their family as their main residence.
A GST/HST new house rebate allows individuals to claim a portion of either the goods and service tax (GST) or the federal (HST) for a newly built or substantially renovated home used as their primary residence. To be eligible for the Federal rebate, the total purchase price of the house must not exceed $450,000. Otherwise, the homeowner will not be able to recover any federal HST already paid. All other conditions must be met.
Application for the New Residential Rental Property Rebate Credit
To be eligible for the NRRP Rebate, the tenants should be the first occupants in the property. The property owner would be excluded from the equation. This means that the property cannot be purchased, occupied by the owner for a time and then leased. Tenants must occupy the property at the start of their tenancy.
The Canada Revenue Agency must receive your application for an HST rebate in Ontario immediately after the property’s closing date. Processing delays or forfeiture may occur if any part of the application is incomplete or not done correctly.
Calculating the NRRP rebate
It is crucial to be familiar with the eligibility criteria for the NRRP rebate, regardless of whether you are a new investor or a seasoned property owner. It is important to be familiar with concepts like “fair market value” or “self-supply” and review other terminologies to make informed decisions.
Many people find the process of applying for rebates tedious and time-consuming. XXX’s in-house experts assess and calculate your HST rebate before proceeding to the Canada Revenue Agency application. They will cover all bases and submit everything by the deadline.