You may want to assess how much tax your organization is paying on employees' expenses. Is your organization exposed to a meaningful tax risk on employees' expenses, leaving sales tax refunds behind or both? Below is a simulation of an organization that has reimbursed to its employees supplies where 10% were incurred outside Canada. As for the supplies incurred in Canada, 90% are taxable supplies, other than zero rated supplies within the following 4 provinces.
|Jurisdiction||Employees Expenses (%)||$ 1 Million of Supplies||Combined GST, HST & QST Rate||Canada VAT Paid (90% taxable supplies)|
|Alberta||15%||$ 150,000||5%||$ 6,750|
|Ontario||40%||$ 400,000||13%||$ 46,800|
|Quebec||25%||$ 250,000||14.975%||$ 33,694|
|Nova Scotia||10%||$ 100,000||15%||$ 13,500|
|Outside Canada||10%||$ 100,000||0%||$ 0|
So in this example for each $1,000,000 of employees' expenses, there is approximately $100K of taxes to manage.
Generally, for a business that is a GST and a QST registrant and exclusively engaged in commercial activities these taxes are:
Last updated on December 30, 2022