Sales Taxes ->GST/HST -> What are GST and HST?
What are GST and HST?
GST, or goods and services tax, is a sales tax which is charged on most goods and services sold in Canada. In many provinces, the GST has been "harmonized" with the provincial sales tax, to become harmonized sales tax, or HST. For information on sales tax rates in each province and territory, see our tables of sales tax rates (link at bottom of page).
Any business which is registered to collect GST/HST will be able to recover GST/HST paid on purchases made in the course of their commercial activities, by claiming "input tax credits" when filing their GST returns. Usually the input tax credits will be for 100% of the GST or HST incurred on supplies for your commercial activities. Input tax credits cannot be claimed if they relate to purchases made in order to provide exempt supplies (see RC4022 at bottom). In most cases of GST or HST on meals and entertainment expenses, only 50% of the GST/HST can be recovered, and the other 50% is not a deductible expense. See the link at bottom of page for more information.
GST/HST rate changes
Both Ontario and BC implemented the HST, effective July 1, 2010. Ontario's HST rate is 13%, while BC's rate was 12%. However, BC returned to a PST and GST system on April 1, 2013. See Ontario HST and BC HST for more information.
Nova Scotia increased their HST rate to 15%, effective July 1, 2010. Canada Revenue Agency (CRA) has issued the following publications:
GST Rate Reduction Effective January 1, 2008
The GST rate was reduced from 6% to 5% effective January 1, 2008. The HST rate was reduced from 14% to 13%. Since then, of course, other provinces have implemented HST - see the table of sales tax rates in each province (above) for current rates. See the following CRA web pages regarding the rate reduction:
Effective July 1, 2006 to December 31, 2007
The GST rate was reduced from 7% to 6% effective July 1, 2006. The HST rate was reduced from 15% to 14%.
Other Resources on TaxTips.ca
Canada Revenue Agency Resources:
Revised: December 10, 2016
Copyright © 2002 - 2017 Boat Harbour Investments Ltd. All Rights Reserved See Reproduction of information from TaxTips.ca