Configuring Taxes for Canadian Sites/Zones

[margecc]

To set up the new HST's is pretty simple. I'm breaking all my provinces down independently just so every time a province changes their tax rates it's easier to adjust. This is assuming that you followed the original excellent tutorial that Dr. Byte created and you have the two classes "GST/HST/PST class" and the "GST/HST/PST on shipping" class.

So I'll take Ontario as an example, and just do each province accordingly:

Under "Locations/Taxes" go into "Zone Definitions". Create a new Zone.
Titled: HST - ON Description: HST for Ontario
Once you've created that, it will have a red dot beside it. Click on "details" then "insert", and choose Canada then Ontario out of the list. Now your dot should be yellow.

Under "Locations/Taxes", go into Tax Rates. Click "insert new rate"
Choose PST/HST/GST class
Zone is the HST - ON
Tax Rate - 13%
Description - 13% HST
Priority: 1
Then click insert

Now you have to do the same thing, just choosing the class as "PST/HST/GST on shipping" class and make the description 13% HST on shipping

Now go back to your original "Zone Definitions" and remove ON from what ever definition you had it under previously. Do this by clicking on the definition, choosing "details" and deleting the province from the list. At his point your dot should now be green since it has all been set up. Run a test order and see how it goes.

[DrByte]

Initial instructions updated for basic setup. Adapt to other provinces as necessary.
margecc's advice may be helpful as you customize according to your unique needs.

[s_mack]

DrB... in your updated first post, why are there 7 and not 8 rates? Why would an Ontario merchant not charge HST on shipping to BC now that both provinces use the harmonized tax?

[DrByte]

Could be something I missed ... but ... unless the Ontario merchant is registered to collect and remit the provincial portion of BC HST, it seems incorrect to be charging customers needlessly. (Yes, there is still a distinction between the provincial and federal portions of the tax ... ie: cases where products are exempt from the provincial portion but must still pay GST.)

I see your logic, but since neither of us are tax accountants, I suggest that a merchant consult a qualified professional before surmising what they think they should do.

[s_mack]

Sure, but then why have we all been collecting HST from Atlantic provinces for all these years, right?

From what I've read from the BC side of things... there is no "exempt from the provincial portion". If GST was charged, then HST is charged. If GST wasn't charged, then it still isn't (and neither is HST). Of course, you're right that I'm not an accountant and someone should find out for sure. But it definitely seems logical to me that if we (regardless of province) were collecting HST from the Maritimes that it would be the same situation for ON/BC. Then again.. "logic" and "government" don't exactly go together.

- Steven

[s_mack]

While not a difinitive source, check out http://sbinfocanada.about.com/ where it states:

If you are selling goods or services out of province, you charge the GST/HST rate based on where the goods are being shipped to. Therefore, if you ship to B.C., charge 12%, to Ontario, Nova Scotia, Newfoundland and Labrador, or New Brunswick, charge 13%, and if you sell to Alberta, Manitoba and Saskatchewan only charge 5% (the GST rate).

*edit*: that info is backed up by a passage found on TaxTips.ca as well.

I'm pretty sure ON stores (well, any province actually) will be collecting full HST from BC clients and vice-versa.

[Royal]

Hello Everyone,

Nova Scotia HST change to 15% as of July 1.

Check here for more info: http://www.gov.ns.ca/finance/en/home...x/default.aspx



Thank you DrByte, s_mack and everyone for making our life much easier.
==============

GST

- Country: Canada; Zone: Alberta - 5%
- Country: Canada; Zone: Manitoba - 5%
- Country: Canada; Zone: Northwest Territories - 5%
- Country: Canada; Zone: Nunavut - 5%
- Country: Canada; Zone: Prince Edward Island - 5%
- Country: Canada; Zone: Quebec - 5%
- Country: Canada; Zone: Saskatchewan - 5%
- Country: Canada; Zone: Yukon Territory - 5%


==============

HST

- Country: Canada; Zone: British Columbia - 12%
- Country: Canada; Zone: Ontario - 13%
- Country: Canada; Zone: New Brunswick - 13%
- Country: Canada; Zone: Newfoundland - 13%
- Country: Canada; Zone: Nova Scotia - 15%


==============

Click on "BACK" to go up one level.
Now create the Ontario HST Zone:
Click Insert

- Zone Name: Ontario HST Zone
- Description: HST (only when shipping to Ontario)

Now click on the newly created "Ontario HST Zone" row to drill down one level to "Sub Zones"
Click INSERT to create new sub-zone:

- Country: Canada
- Zone: Ontario

==============

Click on "BACK" to go up one level.
Now create the BC HST Zone:
Click Insert

- Zone Name: BC HST Zone
- Description: HST (only when shipping to BC)

Now click on the newly created "BC HST Zone" row to drill down one level to "Sub Zones"
Click INSERT to create new sub-zone:

- Country: Canada
- Zone: British Columbia

==============


Click on "BACK" to go up one level.
Now create the NS HST Zone:
Click Insert

- Zone Name: NS HST Zone
- Description: HST (only when shipping to NS)

Now click on the newly created "NS HST Zone" row to drill down one level to "Sub Zones"
Click INSERT to create new sub-zone:

- Country: Canada
- Zone: Nova Scotia


==============

Click on "BACK" to go up one level.
Now create the Maritimes HST Tax Zone:
Click Insert

- Zone Name: Eastern Canada - HST Zone
- Description: NB, NL

Now click on the newly created "Eastern Canada - HST Zone" row to drill down one level to "Sub Zones"
Click INSERT to create new sub-zone:

- Country: Canada; Zone: New Brunswick
- Country: Canada; Zone: Newfoundland

==============

- Tax Class Title: GST/PST/HST Class /* HINT: Yes, this is the same one you just used
- Zone: Ontario HST Zone
- Tax Rate (%): 13.0000
- Description: 13.0% HST (Ontario)
- Priority: 1
/*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!


- Tax Class Title: GST/PST/HST Class /* HINT: Yes, this is the same one you just used
- Zone: BC HST Zone
- Tax Rate (%): 12.0000
- Description: 12.0% HST (BC)
- Priority: 1
/*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!


- Tax Class Title: GST/PST/HST Class /* HINT: Yes, this is the same one you just used
- Zone: NS HST Zone
- Tax Rate (%): 15.0000
- Description: 15% HST (NS)
- Priority: 1
/*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!


- Tax Class Title: GST/PST/HST Class /* HINT: Yes, this is the same one you just used
- Zone: Eastern Canada - HST Zone
- Tax Rate (%): 13.0000
- Description: 15% HST#R99999 9999 RT0001
- Priority: 1
/*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!


==============


That takes care of taxes on products. And now, the Shipping taxes:

- Tax Class Title: GST Shipping Class
- Zone: Canada GST Zone
- Tax Rate (%): 5.0000
- Description: 5.0% GST on shipping
- Priority: 1

- Tax Class Title: GST Shipping Class
- Zone: Ontario HST Zone
- Tax Rate (%): 13.0000
- Description: 13% shipping HST#99999 9999 RT0001
- Priority: 1


- Tax Class Title: GST Shipping Class
- Zone: BC HST Zone
- Tax Rate (%): 12.0000
- Description: 12% shipping HST#99999 9999 RT0001
- Priority: 1


- Tax Class Title: GST Shipping Class
- Zone: NS HST Zone
- Tax Rate (%): 15.0000
- Description: 15% shipping HST#99999 9999 RT0001
- Priority: 1


- Tax Class Title: GST Shipping Class
- Zone: Eastern Canada - HST Zone
- Tax Rate (%): 13.0000
- Description: 13% shipping HST#99999 9999 RT0001
- Priority: 1

[Royal]

- Tax Class Title: GST/PST/HST Class
- Zone: Canada GST Zone
- Tax Rate (%): 5.0000
- Description: 5.0% GST#99999 99999 RT0001
- Priority: 1

/*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!

[s_mack]

So its just NS that was raised to 15%?? Yeesh, why do they make this so confusing, and WHY don't they send this info out to GST registrants??? I heard NOTHING of an HST change for NS until I read it here>

[Royal]

Hell s_mack,

So its just NS that was raised to 15%??

That's what I got so far.

Changes for July 1, 2010:

Ontario 5% GST to 13% HST
British Columbia: 5% GST to 12% HST
Nova Scotia: 13% HST to 15% HST

Harmonized Sales Tax & Rebates

The Harmonized Sales Tax (HST) is administered by the federal government and applies to all goods and services with some exceptions. It combines the federal Goods and Services Tax (GST) of 5 per cent and Nova Scotia’s value-added tax. As of July 1, 2010 the provincial value-added tax will increase from 8 per cent to 10 percent.

The HST relies on the same tax base, legislation, input tax credits and tax returns as the federal GST.

The HST is a value-added tax levied on the additional value of goods or services at a point of production or exchange. Although businesses pay the HST on their inputs, they are generally eligible to recoup this tax expenditure through input tax credits.

The HST differs from retail sales taxes in other provinces (PEI, MB, SK, QC) in that it applies to both goods and services and it provides input tax credits to businesses to offset the taxes paid in input.

Additional information on the administration of HST.

Additional information on HST Rebates.

A new Comprehensive Integrated Tax Coordination Agreement (CITCA) between the Government of Canada and the Government of Nova Scotia was signed on April 3, 2010.

Federal regulations under the Excise Tax Act (Canada) to effect the change in the provincial portion of the HST have been passed and were published in the Canada Gazette Part II on May 12, 2010.

What's new from Budget 2010

* The HST will increase to 15 percent as of July 1, 2010. Click here to read the Transitional Rules (as of April 15, 2010) for the rate change.

* HST rebates at the point of sale will be introduced on children’s clothing, children’s footwear, feminine hygiene products and diapers effective July, 1 2010.
* Administration of the Nova Scotia First Time Homebuyers HST Rebate is transferring from the Canada Revenue Agency to Service Nova Scotia and Municipal Relations.