Here at Numetrica, inquiries concerning HST in Canada are among the most frequently asked. It might be difficult and scary to understand what HST is, when to register for it as a business, and how to apply for a HST number.
In Canada, the HST is only used in a few provinces, and every province has its own set of laws governing credit, collection, and remittances. It’s crucial that you abide by the proper HST regulations if you recently started your own business or if you’re new to the province.
Use Numetrica to find the answers to all of your HST queries!
HST Definition: What Is It All About?
Harmonized Sales Tax is referred to as HST. This is a consumer tax that combines the provincial sales tax (PST) and the federal goods and services tax (GST) in Canada. The Canada Revenue Agency (CRA) collects the applicable HST in the provinces where it is used and subsequently returns the necessary amount to the provinces.
With just one rate, the HST system in Canada was created to make it easier for businesses to send taxes to the government and collect taxes. Although it reduces administrative procedures, it also has tax credits and deductions, which may increase administrative complexity. However, detractors of Canada’s HST system contend that it places more of the tax burden on consumers rather than businesses.
The HST was initially implemented in Atlantic Canada in 1997, although not all of the provinces and territories have embraced it completely. One kind of the GST/PST system is still in effect in the majority of Canadian provinces and territory.
Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland are the five provinces in Canada that use HST right now.
|New Brunswick||HST 15%||Adopted in 1997.|
|Newfoundland & Labrador||HST 15%||Adopted in 1997. As of July 1, 2016, the HST rate increased from 13% to 15%.|
|Prince Edward Island||HST 15%||Adopted in 2013. As of Oct. 1, 2016, the HST rate increased to 15%.|
|Nova Scotia||HST 15%||Adopted in 1997.|
|Ontario||HST 13%||Adopted July 1, 2010.|
|British Columbia||GST 5% PST 7%||As of April 1, 2013.|
|Manitoba||GST 5% RST 7%||The provincial sales tax is known as retail sales tax (RST).|
|Saskatchewan||GST 5% PST 6%|
|Quebec||GST 5% QST 9.975%||As of January 1, 2013.|
|Northwest Territories||GST 5%||Do not charge provincial tax.|
|Nunavut||GST 5%||Do not charge provincial tax.|
|Alberta||GST 5%||Do not charge provincial tax.|
|Yukon||GST 5%||Do not charge provincial tax.|
How long ago did HST begin in Ontario?
Ontario’s HST began on July 1, 2010. It is made up of a 5% federal tax and an 8% local tax. On bills and receipts, it is shown as the 13% HST.In Ontario, the HST system tries to lower the costs of doing business by cutting down on administrative costs. This way, businesses can lower their total costs and pass those savings on to customers.
In Ontario, you can get a number of HST exemptions and point-of-sale refunds on things and services like
- Some health, medical, and dental services
- Child care
- Qualifying food and beverages
- Prescription drugs
- Financial services
- Children’s clothing and footwear
- Books and newspapers
- Car seats
- Feminine hygiene products
- Air travel originating in Ontario and terminating in the U.S.
When businesses charge their customers, they have to follow the Ontario HST exemption rules.
When did the HST begin and end in British Columbia?
An interesting reason for Canada to accept the HST can be found in British Columbia. British Columbia’s HST rate became 12% on July 1, 2010, with 5% going to the federal government and 7% going to the province.
People in British Columbia who were against the HST forced the province to hold a vote by mail-in ballot. The data showed that 54.73% of people wanted to end HST in BC, which meant that it was rolled back.
British Columbia got rid of their HST system on April 1, 2013, and went back to a 5% GST and a 7% PST.
Provincial Governments Not Charging the Harmonized Sales Tax
British Columbia, Saskatchewan, Quebec, and Manitoba all have both a local and a federal tax system as of 2021. Besides the different federal sales tax, use the provincial system as well.
In Alberta, Northwest Territories, Nunavut, and Yukon, there is no province sales tax. Instead, goods and services that are subject to the federal GST are taxed.
When to Sign Up for HST
How can you determine whether your company needs to apply for a HST number?
If your company has sold more than $30,000 worth of goods or services in the last four quarters, you need to open a HST account for it. A small seller is a business that sells less than $30,000 worth of goods or services during this time period. They are not required by law to charge or send HST.
Some small sellers choose to get a HST number on their own because it lets them claim input tax credits on the goods and services they buy to run their business. When you file your taxes, you can’t get these credits for things you bought if you don’t sign up for HST.
When you apply for a HST number, you have to start collecting tax, reporting it, and sending it to the government on the due date that was given to you (monthly, quarterly, or yearly). All goods and services sold in states that have implemented the Harmonized Sales Tax (HST) must be subject to the HST.
The people at Numetrica can help you with your HST report if you need it.
How to Sign Up for a HST Number
You can get a HST number by calling, writing, or going online to the CRA. A business number (BN) includes a HST number. An HST number will be given to you if you don’t already have a business number when you apply.
It is easy to get a HST number. What you need is:
- The date that the registration takes effect, which is generally when you stop being a small supplier.
- The year you use for HST reasons
- Total income each year
- Information about the business
If you apply online, you will get your HST number right away and be able to use it.
Numetrica lets you get a HST number and do other things.
Are you interested in learning more about how HST affects your business or how to get your number? Numetrica has a team of tax experts who can help.
We help small businesses, SMEs, self-employed people, and big companies all over Canada with their HST needs. Our tax planning strategies for the whole year are meant to help you achieve.
Learn more about the input tax credits and deductions you and your business may be eligible for. Contact us today for a free consultation for HST services.