Canada GST / PST / HST

Create a new organization in Zoho Books and choose Canada as a country.

General Info:

GST: Goods and Services Tax. This applies to the supply of goods and services in Canada.
PST: Provincial Sales Tax. This is applied on sales & purchase of taxable goods and service in a province where PST is supported.
HST: Harmonized Sales Tax. This is applied in provinces who have harmonized both PST and GST into a single tax.

In some provinces in Canada, only a GST is collected. i.e: Alberta (5% GST).
There are provinces where tax is collected as a group tax, GST + PST. i.e: British Columbia (7% PST + 5% GST = 12%).
In provinces usually referred as “Participating Provinces”, HST is applied. In these provinces they only have to pay a single tax. i.e: Nova Scotia (15% HST).

Provinces in which HST is applied:



Creating an Organization

Canada Organization

Canada Tax

You can also set your taxes in the Quick Setup that follows. Step 2 will be for entering Tax Information, and you can enter the taxes that will be used for your business.


 

Tax

Create a New Tax

New Canada Tax

Tax agency is the tax authority pertaining to the particular tax.

What if I check the “This is a value added tax” box off?

It will be considered as a Non-Value Added Tax. In some provinces, tax on purchases cannot be reclaimed. In this case, the tax cannot be treated as a liability but an expense.

Create a New Tax Group

New Canada Tax Group

Create a New Tax Agency

New Canada Tax Agency New Canada Tax Agency

Create a New Tax Exemption

New Canada Tax Exemption


Default Tax

The Default Tax will be used in transactions when tax preference (Taxable/Tax Exempt) is not set for the involved customers. The first tax you create will be marked as the Default Tax initially. However, you can mark a different sales tax as default as well.

Default Tax can be useful for the following scenarios.

Default Tax is not automatically associated with a customer. It is only used when tax preference (Taxable/Tax Exempt) is not set for the involved customers.

To mark a different tax as default, hover your mouse over the tax you wish to select as default. You will find the mark as default button appearing next to the tax. Select it to make the tax a default tax.

Change default tax


Tax Information in Contacts & Items

Contacts

Associate a tax for a contact
If your customer resides in Nova Scotia and you wish to have the tax associated with the customer.

Associate Tax for Contact

Making a Contact Non-Taxable

Contact Non-Taxable

Items

Items Taxable

Items Tax-Exempt


Invoices

Tax Information in Invoices

Tax Information in Invoice

Making an Item Non-Taxable

Non-Taxable Item in Invoice


Showing Tax Registration Number in Sales Transactions

Show Tax Registration Number Tax Registration Number on Invoice

Tax Registration Number


Taxes in Purchases

Taxes can be applied in bills and expenses as usual. But when a Non-Value Added Tax is applied to a purchase transaction, the tax cannot be reclaimed. The tax amount will not be shown in tax related reports and will be recorded as an expense. It will be saved under a separate expense amount called as Tax Paid Expense.


GST/HST Returns

Click here to know more about generating GST/HST Returns for your organization.


Terminologies

Name Description
Tax Name It refers to the name you’d like to assign to a particular tax. Ex: GST in Canada is 5%, hence the tax can be named as GST.
Tax Agency It refers to the agency in charge of collecting taxes for that specific province. Ex: New Brunswick - Department of Finance is responsible for collecting the HST for New Brunswick province.
Rate Refers to the tax rate pertaining to a province in percentage. Ex: GST in Canada is 5%, British Columbia PST is 7%.
Exemption Reason Users have to enter why a customer / transaction / item is exempt from sales tax. Ex: Medicine, Legal aid services, Music lessons etc.

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