GST/HST – Place of Supply Rules

As of July 1, 2010, Ontario harmonized its retail sales tax (PST) with the GST to implement the HST at the rate of 13% and British Columbia harmonized its PST with the GST to implement the HST at the rate of 12%.  Also, as of July 1, 2010, Nova Scotia increased its HST rate from 13% to 15%.

Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services.  A limited number of sales or supplies are exempt from GST/HST or zero rated.

CRAs Bulletin # 103 (http://www.cra-arc.gc.ca/E/pub/gm/b-103/b-103-e.pdf) goes into a 53 page detail on the “Place of Supply” rules for GST/HST. 

The following is a short interpretation of those Rules. 

If the supply is made through a permanent estabishment in the province of purchase, such as a movie pass that is only applicable in Ontario, then Ontario will be the “Place of Supply” and the 13% HST will be used. 

On the other hand, if a supplier, in Ontario, supplies software by way of licence to a company in Nova Scotia for use by its employees at its offices in Nova Scotia (HST rate 15%) and New Brunswick (HST rate 13%) and, in the ordinary course of business, the supplier (in Ontario) obtains the business address of the recipient  in Nova Scotia which is also the billing address for the supply of products/services, “The Place of Supply”.  Therefore, the supply is deemed to be made in Nova Scotia and is subject to the 15% HST. 

If this same supplier, in Ontario (HST rate 13%), supplied software to a business in Alberta for use by its employees in offices in Alberta (GST 5%) and British Columbia (HST rate 12%), with the business billing address in Alberta, “The Place of Supply”,  then the Ontario supplier would only charge the 5% GST rate with NO HST.

For more information on this, go to the link provided.

Top Ten Bookkeeping Mistakes Made by Small Business

The following are the top ten bookkeeping mistakes made by Small Business which makes qualified professional bookkeepers invaluable.

1.Doing the bookkeeping themselves. 2. Not saving receipts less than $50.  3. Forgetting to track reimburseable expenses.  4. Not properly classifying employees.  5. Lack of communication with the professional bookkeeper.  6. Not reconciling the bank statements and cc statements monthly.  7 No back ups (we all know what happens here).  8 Retailers forgeting to deduct sales tax or deducting the wrong rate of tax.  9. Petty cash nonchalance (every company should have a petty cash account).  10 Miscategorization or overcategorization.  Expenses need to be categorized properly. 

There are many more bookkeeping mistakes that Small Business owners make.  This list is the most popular of the bunch.