BONG wrong......the non-resident pays the GST then applies for a refund after he returns home.
ALL BUSINESSES IN CANADA ARE REQUIRED TO COLLECT GST AT POS.....
Hst
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ALL BUSINESSES IN CANADA ARE REQUIRED TO COLLECT GST AT POS.....
I am referring to a real non-resident (say Nokia) who does not return to Canada.
tboy, my boss paid $1,000 an hour to a major accounting firm to analyze the impact of the HST on our business and we are satisfied that the impact is positive for our business.
obviously you're not a service oriented business otherwise it would negatively impact your business and you wouldn't need to spend $1000.00 an hour to determine it. Quite simply: the cost of services will be going up 8% with absolutely NO benefit to the companies involved......In fact, you could say that it will negatively impact all businesses due to the software upgrades that will need to be purchased and installed.......
BTW: I am 99.9% sure Nokia would be paying the GST then applying for a refund but even then, Nokia has offices in Canada so they are a registered Canadian Company and as such, are subject to GST.
That's only if they purchase the item IN Canada. If you're selling to a non resident via mail, the vendor does not collect GST.
That's true, but we're talking more along the lines of an exporting company, not a private over the net sale like ebay or whathaveyou.....
But, now that you mention it, (and someone more knowledgable than I can comment) but I believe the tax is supposed to be collected at the point of sale. In other words, with net sales, the sale actually occurs wherever the business is located, NOT where the end user is.
On that note: I guess we can no longer escape paying the PST when we order from NCIX in Alberta (or other provinces for that matter)........
I should speak to our company accountant but I think when we import stuff from the U.S. it goes to a bonded warehouse and the stuff is only released when we pay the 5% GST (guess this will be 13% under the new HST) and customs duties (if any). I don't remember offhand how we pay the PST, we probably self-assess the PST when we file the monthly PST return.
Yes, that is how it will affect you now. Instead of paying the gst only on those taxable goods, you'll be paying the HST.
You don't pay the PST on anything you sell to an end user. A reseller only collects PST on goods sold........Your company would pay PST on office equipment, consummables, anything it purchases for its own use.....
HST will not hurt Ontarians - UofT Economist
Ontario's controversial harmonized sales tax is "virtually revenue neutral" and not the cash grab critics say it is...........
http://www.thestar.com/news/ontario/hst/article/738403--hst-won-t-hurt-much-report-says
Ontario's controversial harmonized sales tax is "virtually revenue neutral" and not the cash grab critics say it is...........
http://www.thestar.com/news/ontario/hst/article/738403--hst-won-t-hurt-much-report-says
The thing I find the most interesting about that article is that they say the increase in sale tax will be offset by tax credits but how many times have we heard that? And then the tax credits are negated by a more complicated tax form......even then, will someone spent 8% for a service now, then HOPE to get that money back 12+ months later?
I say a resounding NO......
Also, it doesn't say HOW this companies are going to save all this money and how that money is going to create jobs.....
I say a resounding NO......
Also, it doesn't say HOW this companies are going to save all this money and how that money is going to create jobs.....
I've got some land in Florida for sale.
The article admits that the HST itself is a huge tax grab, but that Big Brother is trying to offset that tax grab by taking your money and putting it in other peoples' pockets with limited tax cuts and rebates.
Except that the rebates are based on what you earned last year, not next year when you're paying more.
As for the Export discussion above: GST is not to be collected on items which are delivered (shipped by the vendor) out of the country, and PST is not collected on items delivered out of the Province.
Well, I don't want to tell you your business, but if you purchase concrete and pay pst on it, and then sell that concrete to a customer, then you shouldn't be paying PST on that concrete because even though the sale of the concrete is part of the bigger job, it is still a resale situation.
That is no different than me buying 2 x 4's from Home Depot for a job. If I include materials in my price to the customer, I MUST charge them PST. This is why I do "time and materials" with materials being a direct passthrough to the customer....
No.
http://www.rev.gov.on.ca/en/guides/rst/901.html
The section you want to refer to is called "Real Property Contractors". They pay PST on the concrete, but embed the cost of that PST into their invoiced rate, and do not charge PST on the concrete to their customers.
And unless the Government does a good job advertising the facts, watch out for the construction industry to give themselves an 8% rate hike next July 1.
T&M billing is fine for many purposes when it comes to Ontario Retail Sales Tax, but not when those materials become attached to Real Property. Consult a tax expert for proper advice. (Note that the Land Transfer Tax takes the place of much of the retail sales tax for wholesale purchase of real property.)
Thanks for the clarification guys...the "attached to real property" always confused me which is why years ago I decided to do the straight pass through method.
The situation that brought this up way back when was "is a custom kitchen cabinet which is permanantly mounted to the walls of a home" defined as "attached to real property". A cabinet shop I worked at said "no" and charged PST on the item and an accountant said "yes" and stated that PST shouldn't be charged......
This also was brought up when I worked for a company that built trade show exhibits. Our Controller called the local taxation office and every time he called, he got a different answer about charging PST on the exhibits we produced. So, we charged PST to COA (cover our ass).
That's the thing: when you make the system so complicated that even government employees don't know WTF is going on, something is wrong with the system.....
The situation that brought this up way back when was "is a custom kitchen cabinet which is permanantly mounted to the walls of a home" defined as "attached to real property". A cabinet shop I worked at said "no" and charged PST on the item and an accountant said "yes" and stated that PST shouldn't be charged......
This also was brought up when I worked for a company that built trade show exhibits. Our Controller called the local taxation office and every time he called, he got a different answer about charging PST on the exhibits we produced. So, we charged PST to COA (cover our ass).
That's the thing: when you make the system so complicated that even government employees don't know WTF is going on, something is wrong with the system.....
Here's an example - a theoretical one.
I manufacture a sheet of plastic, and have costs of $1 for materials. I pay my 7% sales tax on those (7 cents). I then sell the sheet for $1.50. My customer pays 10.5 cents in sales tax. The customer assembles these sheets into a component for another product and sells that for $2. That customer pays 14 cents sales tax. And on and on.
So the total sales tax from all these transactions can add up to a lot of dollars...and it is paid at each step of the way. With the value added nature of the HST it would be as follows:
First $1.50 sale - value added is 50 cents, net tax 3.5 cents versus 10.5 cents under current system
Second sale $2 - value added again 50 cents, net tax 3.5 cents versus 14 cents under current system.
So you can see where this adds up when there are multiple layers of addition of value (even with just manufacturing, wholesale, and retail).
The GST is already that type of tax, harmonizing with the PST reduces administration and clearly will result in much much lower cost of tax that will ultimately be embedded in some products.
Added tax on services and things not formerly subject to PST will offset a bit of that, but not nearly all of it. But over time this will favor Ontario in a huge way as it is a manufacturing province, and this will lower the costs of manufacturing here ...and hopefully this gets passed on to consumers at some time. Competition ensures that happens.
Menck: are you talking per or post HST?
If you're talking pre, no one should be paying PST on the sheet of plastic along the supply chain, only the end user.
The attached to real property discussed earlier is one exception but from my days building trade show exhibits, and purchasing thousands of different materials (from A/V equipment to sheets of plywood) we were PST exempt all along the way........least according to our controller/accountant.
If you're talking pre, no one should be paying PST on the sheet of plastic along the supply chain, only the end user.
The attached to real property discussed earlier is one exception but from my days building trade show exhibits, and purchasing thousands of different materials (from A/V equipment to sheets of plywood) we were PST exempt all along the way........least according to our controller/accountant.
You may want to get another accountant's opinion, or have the one you have sign for any financial penalties which may apply.
http://www.rev.gov.on.ca/en/interp/rst/lr0010.html
As the source materials are being manufactured into goods for retail sale (i.e. your product is subject to PST), I would expect you'd be eligible for filing a PEC with your suppliers (i.e. not pay PST on the source materials).
Thanks for the link but we knew all that. And yes, the point about materials being used in the construction of the exhibit is RST exempt and we had the certificate for just that purpose.
One of the trick aspects of this is: construction and delivery of an exhibit, to a customer based in Ontario, but they take first delivery of it in the US. LOL. We did that many times and never really did figure it out.
Whoopie! $1000 bucks to offset a TAX on EVERYTHING you buy til at least 2015. Sounds like a deal to me.......NOT!!!!!
The rules on PST are quite clear. If you purchase something and pay PST, and then resell it to a customer, YOU STILL HAVE TO CHARGE PST!!!
You cannot deduct PST paid from PST charges. These rules are messed up and everyone knows it. I even called the PST people on some points, and they admitted that the revised, clarified, clarifications were still confusing and difficult to implement.
I really look forward to the HST. With HST, if you purchase something and pay HST, then you can deduct the expense when you sell it. The cost of the tax is revenue neutral to the business. It makes sense!
That is what our $1,000 an hour accountant tells us. We pay the HST when we buy our goods and services but we claim a refund back from Ottawa. Sounds simple enough to us.
BTW We asked our accountant why he charges a $1,000 an hour. He said a lot of that goes to pay his liability insurance in case he gave us the wrong advice
.