Ch. 40 Sales Tax Flashcards
What are taxable supplies?
Goods or services that is subject to GST or HST
What are zero-rated supplies?
A type of supply that has 0% GST/HST, they’re still considered taxable supplies
What are exempt supplies?
Goods and services that are fully exempt from GST/HST
When is GST registration required?
When a person who sells taxable supplies in Canada are required to regist for GST/HST unless one of the following holds:
- person is a small supplier
- the only commerical activity is the sale of real property not in their regular course of business
- the person is a non-resident who does not carry on business in Canada
What is considered a small supplier?
Where their sales do not exceed $30,000
What are the two tests to determine the small supplier exemption cease date?
Last four calendar quarters test and calendar quarter test
Explain the last four calendar quarter test
IF any 4 consequtive calendar quarters they exceed $30,000, the supplier ceases to be a small supplier the end of the month following the quarter that they exceeded $30,000
They need to start collecting the first date of the 2nd both following the end of the quarter
Then they need to register within 29 days of the frist day of the second month following end of the calendar quarter in which the $30,000 limit was exceeded
What is the calendar quarter test?
when a person’s revenue from taxable supplies exceed $30,000 in any calendr quarter, the person ceases to be a small supplier immediatly before the sale resulting in the exceeding $30,000 is made
The date in the quarte rwhen the sale resulting in exceeding of $30,000 was made is required to be collected
They need to register wtihin 29 days after the date the person is first to collect GSt/HST
What is the quick method to calculate ITCs?
Annual taxable supplies of $400,000 or less
not avaliable to a person providing legal accountoing, or consulting services
election required
What is the simplied ITC method?
taxable supplies made in prescending year of $1,000,000 or less, and annual taxable purchases made in preceding year of $4,000,000
No restrictinos in registratn
No election requried
What are the reporting periods for taxable supplies?
More than 6,000,000 = monthly. Deadline is one month after the reporting period
1,500,001 to 6,000,000 = quarterly. deadline is one month after reporting period
less than 1,500,000 = annually. Deadline is 3 months following end of reporting period
