Setting Up Canadian Taxes
Tax configuration for ALL Canadian businesses using this software should begin with the following:
1. Define one location for use as the default GST location in Sales Tax Maintenance. This should be assigned the federal tax rate (currently 5%).
2. Update the Canada GST Tax Code parameter to reflect the GST tax code you created in the Parameters form (Maintenance > Database > Parameters > Point of Sale > Regional Tab). This may have to be done by Implementation team members.
3. Define at least one other sales tax location that is either PST (Provincial Sales Tax), QST (Quebec Sales Tax), or HST (Harmonized Sales Tax) in Sales Tax Maintenance. Don't check the GST Taxable check box for this new tax code.
4. Branches, accounts, and jobs should never be assigned to the GST location.
Canadian Table of Tax Rates (Subject to Change)
The following tax table is for reference only and should not be relied upon as tax rates are subject to change. These are the tax rates as of January 2018. Please refer to your Provincial tax department as well as the Canadian Revenue Agency for details and verification.
https://www.canada.ca/en/revenue-agency.html
| Canadian Province/Territory | Rate Type (GST, HST, PST) | Provincial Rate | Canada Rate | Total Tax Rate |
|---|---|---|---|---|
| Alberta | GST | 0% | 5% | 5% |
| British Columbia (BC) | GST+PST | 7% | 5% | 12% |
| Manitoba | GST+PST | 8% | 5% | 13% |
| New Brunswick | HST | 10% | 5% | 15% |
| Newfoundland and Labrador | HST | 10% | 5% | 15% |
| Northwest Territories | GST | 0% | 5% | 5% |
| Nova Scotia | HST | 10% | 5% | 15% |
| Nunavut | GST | 0% | 5% | 5% |
| Ontario | HST | 8% | 5% | 13% |
| Prince Edward Island (PEI) | HST | 10% | 5% | 15% |
| Québec | GST+QST | 9.975% | 5% | 14.975% |
| Saskatchewan | GST+PST | 6% | 5% | 11% |
| Yukon Territory | GST | 0% | 5% | 5% |
Harmonized (HST) vs. Province Tax Codes (PST)
Provinces and territories with one consolidated (combined) tax rate are identified as Harmonized or HST. Other provinces that separate their taxes from the federal tax are considered Provincial or PST.
HST
If your province has HST, the tax is collected and submitted as one amount. Your tax location should be set-up with the Maritime (HST) check box checked (don't check the GST Taxable check box in this case). The Total Percent should be the overall rate being charged (including the GST tax rate). Items should be set with a Taxable status of either Yes, No, or Always. Adjustments that are taxable should have both the PST and GST check boxes selected. Account that are exempt for HST should have their tax ID specified for both the PST and GST Tax Exempt ID fields.
PST
If your province has PST and GST, the tax is collected and submitted separately. The Maritime (HST) check box should not be checked in these cases. The tax rate should not include the GST portion of the tax, only specify the PST (Provincial) percentage.
Exemptions
Items can be taxable or not taxable for either or both the GST and PST. Use the GST Taxable option for items that are taxable for GST only but not PST. Use the "PST Taxable" option for items that are taxable for PST only but not GST. Use Yes, No, or Always in all other cases.
Adjustments that are taxable should have neither, either, or both the PST and GST Taxable check boxes selected depending upon the type of adjustment and rules in your Province. Accounts that are exempt for PST should have their PST exempt ID entered and accounts that are exempt for GST should have their federal exempt ID entered.
Purchase Exemption
Some areas may not be required to pay PST amounts on purchases but do charge PST with Point of Sale transactions. In these cases, only the GST portion would be paid on purchases. This can be designated using the "Exclude Purchases" check box on the Sale Tax Maintenance form for the tax location.