Sales_Tax_Settings

Tax Settings for Canada

ALL Canadian businesses should begin with the following tax settings:

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%). This tax is applied to all provinces and territories in Canada.

2. After this default GST Tax Code parameter is created, select it from the Canada GST Tax Code list in the Parameters Settings form (Maintenance > Database > Point of Sale > Regional tab).

3. For the Provinces that need an additional sales tax, create a PST (Provincial Sales Tax), QST (Quebec Sales Tax), or HST (Harmonized Sales Tax) in Sales Tax Maintenance (Point of Sale > Database > Sales Tax). In these forms, the GST Taxable check box is disabled.
Note: For the province of Alberta and the Northwest, Nunavut, and Yukon territories that do not use an additional tax location, we create a Blank tax category that is assigned to the Branch record.

4. You can then add the PST, QST, Blank, or HST tax setting to branch, account, and job records that require them. Branches, Accounts, and Job records should never be assigned to the GST location.

A separate GST tax location must always be setup and assigned to the federal tax rate (currently 5%). A Point of Sale parameter is used to indicate which tax location is used for GST sales tax.

Use the following tax table as reference for researching the appropriate tax rates for each Province and Territory. Do not rely on this list solely for tax rates as these values 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

Canada's Province	Rate type (HST, GST, PST)	Provincial rate	Canada rate	Total
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	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 (Do not check the "GST Taxable" check box in this case). The "total percent" should be the overall rate being charged (it should include the GST tax rate, in other words). 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. Customer who 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.

Customers who are exempt for PST should have their PST exempt ID entered and customers who 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.