A good list of the tax changes put out by the BC government that's easy to read and covers a lot of the things we're all concerned about is available here. There is also information on transitional rules about inventory and selling it, but no details as to how these will affect the cost of hardwood flooring. Question from 'Internationalist:' For the sale of a residential building lot where the seller is a private individual non-GST registrant Who pays the tax and who collects and submits the tax?
Where the buyer is a GST registrant, as is the case in your question, it is the buyer's obligation to self-assess and remit the tax. A GST registered buyer that is purchasing land for use in its business activities will generally be able to recover the tax paid by claiming an input tax credit.
It is important for sellers to be sure to confirm the registration status of the buyer on the date of closing. A sale of vacant land by an individual may be exempt if the individual did not use the land for a business including farming , the sale is not made in the course of the individual's business or the individual did not subdivide the land more than once.
In the transaction you describe, it is likely the buyer will be indifferent as to the tax status of the transaction. In those circumstances, unless the parties are absolutely sure the exemption is available, it is prudent for the buyer to simply self-assess the tax and claim the offsetting credit. Question from 'Albin:' I agree that in many cases there are supply-chain cost savings that will offset the final tax, both for consumers and newly covered HST businesses.
But not in my case, or my barber's, since he has been the most vocal objecter to the new tax. Do you have a sense of how many newly paying businesses will not have supply chain offsets to the cost of the new tax, and who are therefore feeling pressured to "eat" the tax and lose business income? Bonney's answer for BC: Yes, it is true that businesses that are heavily dependent upon labour such as a barbers will probably not benefit from the HST. This is because they have few purchases to make that they would now benefit from having a 12 per cent input tax credit getting the 7 per cent PST back as well as the 5 per cent GST but would feel pressure to drop their take-home revenue to offset the increased cost to their customers of paying 12 per cent for their services instead of only the 5 per cent GST.
From the March, BC budget page , one figure to note is the breakdown of goods and services for personal expenditures were 60 per cent on services and 40 per cent on goods. Thus, while the HST is a huge boost to the goods-producing sector, for services that weren't subject to PST, the benefits are harder to find.
Bonney's answer for Ontario: Many CFIB members have also expressed their concern about the pressure of "eating" the tax, which will ultimately lower their margins. In terms of financial support available from government, Ontario's small businesses will receive a one-time transitional credit. In addition, some businesses such as the barber will be able to claim input tax credits on their business purchases. Question from 'Davey' I am currently making quarterly payments.
The schedule for payments is based on what I collected last year. Does the switch to HST have an impact on my quarterly payments for the balance of ?
Janet Kasun: If you are a resident of either Ontario or British Columbia, yes, the switch to HST will have an impact on your quarterly payments for the balance of Assuming that you are not a "financial institution" for GST purposes, and that your fiscal year is the calendar year, you can expect your instalment payments to at least double for the last two quarters. In December, the government passed legislation giving it broad powers to pass regulations in relation to harmonization.
In particular, regulations may be made to determine the amount of instalment payments. Unfortunately, we have not seen any such regulations.
So for now, all we can say with authority is that if no new regulations are made, the rules from will apply and your payments will double. The rates doubled in because at that time the federal GST rate was 7 per cent, the new harmonized rate was 15 per cent, so double was approximately the amount of the tax increase. If new regulations are passed, you can likely expect a greater increase 5 per cent compared with 12 per cent or 13 per cent. If not, it is likely that your payment at the end of the year will be higher than normal.
Question from 'workerbee:' Apparently there is no PST or GST on fees paid to doctors, physiotherapists, naturopaths, optometrists, massage therapists, etc. But apparently the pharmacist and the optician will get all the HST back that they pay for rent, utilities, telephone, supplies, etc. What gives with that? They must also maintain records about their non-resident clients and the goods stored on their behalf. If the property owner is not registered, then the accommodation platform operator will be deemed to have made the supply and will be responsible for collecting and remitting the tax.
To help the CRA administer these rules, accommodation platform operators would be required to maintain records and file an information return with the CRA for each calendar year by six months after the end of the calendar year.
In our submission to the federal government in early February , we highlighted legislative and administrative issues that we believe the Department of Finance Canada Finance and the CRA should address. Most importantly, we observe that the proposals introduce a completely new regime. The legislation is complex and will need significant interpretation. Non-residents around the world and their advisors will need clear and comprehensive guidance to ensure compliance, and we have encouraged Finance and the CRA to provide as much guidance as they can as soon as possible.
We also urged Finance to review the proposals and our comments to see whether their objectives could be met through simpler means. The July 1, implementation date may not give businesses enough time to prepare. Foreign businesses need sufficient time to ready themselves in three phases:. As occurred in Quebec, a variety of practical reasons may prevent Canadian registered businesses from recovering tax paid in error from non-resident platforms. Further, some digital platforms in other countries charge tax on all transactions made through their platform, regardless of whether tax is payable by the customer.
As a result, registered Canadian businesses might bear unnecessary tax simply because they are registered under the normal regime.
We suggested that Finance should consider a rebate mechanism to alleviate these situations so that those who are overcharged can recover the tax directly from the CRA. The proposed threshold and collection obligations for digital platform operators as well as non-resident suppliers selling through the platforms are confusing and difficult to apply.
What if your business operates in Prince Edward Island and sells a product online to a customer in Ontario? Sales from your business to a territory such as Manitoba are different still, as Manitoba has a retail sales tax RST. Keeping track of your sales and where they occur is crucial when filing your return with the CRA.
As of December , there are new tax law updates pertaining to businesses who host an online marketplace or sell accommodations online. The practice also applies to other Canadian businesses, as long as the shipping address for products or destination for services is not within Canada.
To optimally set up your business for ITCs, you should keep stringent accounting records and document everything, especially your receipts. Many accounting software programs allow you to upload scanned photos of your receipts and save them — no more keeping track of paper receipts. If any documents need physical copies, keep those copies safely in your business or home.
A yearly inventory count is also important.
0コメント