GST/HST & QST Parameters

GST registrant and/or QST registrant

Whether your organisation is solely a GST registrant or both a GST and a QST registrant, our software will apply the tax calculation once you select the GST/HST/QST profile applicable to your case. Input Tax Credits (ITC), which are the GST and the HST claimable on your purchases, and Input Tax Refunds (ITR), which are the QST claimable on your purchases, will be calculated accordingly. You will also get a detailed list of the GST/HST/QST that has been paid (i.e. purchases) as well as the ones that have been deemed paid (i.e. on allowances).

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GST/QST ratios of commercial activities

Organizations that are engaged in both commercial and exempt activities have to apportion their input tax according to their ratio of commercial activities. Again, simply pick the ratio of commercial activities in the setting that is applicable to your employee expenses under the GST regime and under the QST regime in order that these ratios are taken into account in the calculation of input tax claimable and remittable.

Large business - GST/QST purposes

Organizations that are large businesses for QST purposes are subject to the phasing out of the restricted input tax refunds on some properties and services. Generally, a large business refers to those making taxable supplies worth more than $10 million annually. As the case may be, taxable supplies made by associated person have to be included in determining the $10 million threshold amount.

Generally speaking, these properties and services are :

  1. Meals and entertainment subject to the 50% limitation under the Income Tax Act
  2. Motor vehicles weighing less than 3,000 kilograms
  3. Motive fuel (other than diesel fuel) for used in motor vehicles
  4. Telecommunication services, excluding internet access, web site hosting and toll-free telephone services
  5. Energy not used directly in the production of goods for sale

Under the QST regime the phasing out of the restricted ITR started on January 1, 2018. The manner to manage the tax recovery differs from the HST in Prince Edward Island and Ontario, since registrants simply have to claim more taxes according to the following rates:

  • January 1st, 2018 to 31 December 31, 2018: 25%
  • January 1st, 2019 to 31 December 31, 2019: 50%
  • January 1st, 2020 to 31 December 31, 2020: 75%
  • January 1st, 2021 & after: 100%

Under the GST-HST regime, the recaptures rates on Input tax credits in Prince Edward Island on the suplies described above are as follows:

  • April 1st, 2013 to March 31, 2018: 100%
  • April 1st, 2018 to March 31, 2019: 75%
  • April 1st, 2019 to March 31, 2020: 50%
  • April 1st, 2020 to March 31, 2021: 25%
  • April 1st, 2021 & after: 0%

For more details, see:

Generally speaking for other provinces, the recovery of inputs is done fully as well as the GST in Québec.

Advataxes is not asking your employees to select tax codes but simply to select a transaction date, an expense category and the province. The accounting posting is done automatically subject to adjustments. This prove to be a very efficient way to proceed as the difference between taxes claimed and taxes that should have been claimed is about 1%. For further details see our page dealing with our tax management surveys.

Small/medium business - GST/QST purposes

Organisations that are small and medium businesses for GST and/or QST purposes are governed by a different set of rules from large businesses. These organizations are not covered by the recapture of input tax credits under the GST regime or by the restricted input under the QST regime. The setting functionalities have integrated this GST/HST and QST specificity for you to choose from.

Non Profit Organizations – GST/QST purposes

Non profit organisations, such as school boards, colleges, universities, hospitals, municipalities and charities have often different tax recovery rates on their expenditures. Advataxes can integrate different recoverable percentages on taxes paid other than your typical 100% or zero. Furthermore, Advataxes is one of a kind as it populates taxes paid on each purchase and deemed paid on each allowance in a table thus allowing all kinds of subsequent analysis. It’s a great Canadian sales tax enabler. When employees also upload a picture of their receipts with each posting, which is a task that can be done quickly with a smartphone, it is really easy to compare and adjust, if necessary. We will gladly perform a review and list deficiencies, if any so you can rectify erroneous behaviors and confidently face any kind of upcoming audit.

Financial institutions for GST/QST purposes

Financial institutions can claim the percentage of GST/HST and QST paid on expenses under different rules from other types of registrants. Advataxes is set so that the financial institution can claim the tax paid for the exact ratio of commercial activities that is applicable to expenses. Furthermore, for financial institutions that are selected listed financial institutions, Advataxes identifies the tax paid on every purchases in a single report. This is rather useful to populate the Special Attribution Method (SAM).