Category Archives: GST/HST & PST
These articles provide information about GST’HST, particularily as it applies to BC. As more information becomes available regarding the transition back to PST, we will update this section.
Making your Canada Revenue Agency (CRA) payments online is convenient and easy. Payments may be made by: online banking, debit card or credit card.
Visit: Canada.ca/payments for more information.
Does your business perform improvements to real property? If so, then you are considered to be a Real Property Contractor for PST purposes.
The definitions of improvements to real property and Real Property Contractor are at the bottom of this post.
A Real Property Contractor (RPC) does not charge PST to its customers on materials and services.
A RPC pays PST on the materials it purchases to fulfill its contracts with customers – unless a specific exemption applies. The PST becomes part of the material expense.
When a RPC (who is GST registered) wants to get a full reimbursement from its customers on materials purchased, the RPC would charge GST on the materials and PST.
Here is an example:
ABC Contracting buys $1,000 of lumber from Home Depot to build new front steps for its client, Miss Brown. ABC Contracting is charged GST and PST on the lumber.
The total Home Depot invoice is $1,120 ($1,000 plus $70 PST plus $50 GST).
ABC Contracting incurs $500 in labour to build the stairs.
ABC Contracting would bill Miss Brown as follows:
Material ($1,000 plus PST of $70) $1,070.00
GST $ 78.50
Total $ 1,648.50
For more information please refer to the Small Business Guide to PST.
Improvements to Real Property
Real property is land and any items permanently attached to land (buildings and structures). Goods that become permanently attached to the land, buildings or structures on installation cease to be personal property at common law upon installation and are called improvements to real property.
You are a real property contractor if, under a contract, you construct buildings, or supply and affix, or install, goods that become improvements to real property or supply and affix, or install, affixed machinery. This includes contractors and subcontractors in the construction industry, as well as other businesses that supply goods with installation services where the goods will become affixed machinery or an improvement to real property or upon installation (e.g. flooring, dishwashers).
The “quick method” for calculating your GST liability relies on your revenue amount only (ie does not use input tax credits from the GST you spend).
You must be registered to file using the “quick method” with CRA. By default, you would be a “regular” filer and would need to explicitly register to use the “quick method”. You can change your method, but must contact CRA to initiate this change.
Your decision may depend on your business’s GST “ins and outs”. If you have relatively low expenses, it may not be worth tracking the GST on the items as they would result in low input tax credits (ITCs). For example, if you have a consulting business with very little expenses, it may make sense to use the “quick method”. However, if you have a business with larger numbers of expenses that incur GST, it may be more lucrative to remain a regular method filer.
This document outlines the calculation method for the periods before and after the HST and the period when HST was in place.
Update: It’s now June 27th…have you filed your May PST return?? The deadline is Tuesday, July 2nd because the 30th falls on a Sunday and the 1rst is a holiday. If you are finding monthly filing and paying too onerous, you can request to switch to a different frequency.
Today is the deadline for the first PST filing for businesses registered as monthly filers. Have you remembered to file?
You may want to analyze what reporting period works best for your company. Businesses are eligible for a commission on the PST they collect, to a maximum of $198.00 per filing. If you business collects more than $333 of PST in a given reporting period, you can claim a 6.6% commission to the $198 maximum. If your records are kept up to date and you have your revenue numbers, it may be more lucrative to file monthly in order to maximize your commission. More information.
If you fail to remit PST on or before the due date, you will not be able to claim the commission and may be subject to a penalty and interest.
You can request a change to the frequency, but will have to file for April and May (as monthly returns) before the change comes into effect.
To file and pay your return online, follow this link.
All businesses who are required to charge BC PST on the sale of their goods and/or services beginning on April 1, 2013 must register to collect PST. Even if your business was registered under the old BC PST system, your business must register for the new PST system. A business may register online, by fax or by telephone. Additional information about registering to collect PST may be found here.
Don’t forget to also reprogram cash register to be able to apply PST to your “PSTable” sales. In addition, your staff may need to be trained on which products and/or services PST should be applied to.