M4.8 Calculating Payable Tax Flashcards
What are NRIs?
non-resident importers are suppliers outside of Canada who choose to be responsible for any applicable duties and taxes on goods they sell to Canadian purchasers;
non-resident importers must register for the GST/HST in order to claim input tax credits;
True
What is the flow through method?
a non-resident, non-registrant may use the flow through method to recover tax paid on imported goods;
a non-resident selling casual goods to a Canadian resident must collect HST/PST.
True
What goods does Excise tax currently applies to?
Excise tax currently applies to:
certain petroleum products;
fuel-inefficient vehicles; and
air conditioners designed for automobiles.
When certain goods are manufactured in Canada, excise tax is payable at the time the goods are delivered to the purchaser.
True
When goods subject to excise tax are imported, excise tax is payable by the importer at the time the goods are imported.
True
Manufacturers of goods subject to excise tax must have an excise tax licence (“E” licence) unless they are a small manufacturer. A small manufacturer is one whose total annual sales do not exceed $50,000.00.
True
A wholesaler’s licence (“W” licence) allows the purchase of goods (subject to excise tax) for resale without paying excise tax at the time of purchase or importation. In this case, excise tax is collected and remitted when the goods are sold.
True
What is the legislative authority for GSTHST under?
legislative authority is under the Excise Tax Act;
GSTHST are not applied together; that is, only the GST or the HST is collected;
True
the HST is applied at a rate of 15% in what provinces
the HST is applied at a rate of 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island;
Provincial taxes includes?
include provincial sales tax (PST), provincial tobacco tax, alcohol markups or fees, and, in Québec only, specific alcohol tax;
Provincial taxes is applied when goods are ?
are payable at the time of importation on casual goods that are destined for individual use and not imported into Canada for sale or for any commercial, industrial, occupational, institutional or other like use;
PST, provincial tobacco tax and alcohol markups or fees are assessed and collected on casual goods when an agreement exists between the province and the CBSA to collect the tax on behalf of the province;
True
What does a W license allow importers to do?
a “W” licence allows an importer of goods subject to excise tax to pay the tax when the goods are sold, rather than at the time of importation.
What does D17-1-21 provide more information about?
Note: Non-resident importers must maintain certain records; additional information on the maintenance of records is found in D17-1-21.
What is the Excise Tax Act?
The Excise Tax Act is the authority for the imposition of excise tax on specified goods at various rates.
The GST, the HST/PST and excise tax are charged in addition to all other duties and taxes.
Where is there a listing for prescribed goods imported in prescribed circumstances and under prescribed terms and conditions ?
Prescribed goods imported in prescribed circumstances and under prescribed terms and conditions are listed in the Non-Taxable Imported Goods (GST/HST) Regulations .
List of goods that exempt form taxes are found in.
Schedule V of the Excise Tx Act
List for zero rated goods are found in
Schedule VI of the excise tax act
Non-Taxable supplies are goods on which the GST is not payable.
These are described in Schedule VII to the Excise Tax Act.
Tax rate in Alberta?
GST. 6%
PST n/a
Taxe rate in BC
GST - 5%
PST 7%
Tax rates in Saskatchewan
GST 5
PST 6
Tax rates in Quebec
PST 9.97
GST 5
Exempt supplies are those on which there is no GST paid by the purchaser, and the registrant does not collect or charge tax.
True
The GST is governed by the
Excise Tax Act
The HST includes both the federal GST and the provincial sales tax.
True
In order to claim an input tax credit, a non-resident importer must be registered for the GST.
True
The “flow through method of tax recovery” enables non-registered non-resident importers to recover GST that they have paid on imported goods.
True
The HST and the PST is collected on casual goods imported by a non-resident importer.
True
Calculate the GST owing on the following goods. Commodity: Detonating cords
Value: $225.26 USD each
Quantity: 12,350
Weight: 33,000 kg
Exchange rate: 1.351
Country of origin: Bolivia, no proof of origin is available
mentioned under Heading 36.03.
3603.20.00.00
Bolivia qualifies for both the MFN and the GPT rate of duty and since we do not have a Form A Certificate we must use the MFN rate of duty of 6.5%.
$225.26 USD Unit price X 12,350 Quantity = $2,781,961.00 USD
$2,781,961.00 USD X 1.351 Exchange rate = $3,758,429.31 VFD
$3,758,429.31 VFD X 6.5% Duty rate = $244,297.91 Duty
$3,758,429.31 VFD + $244,297.91 Duty = $4,002,727.22 VFT
$4,002,727.22 VFT X 5% GST rate = $200,136.36 GST
1806.20 A change to subheading 1806.20 from any other heading.
In order for goods of subheading 1806.20 to be considered as originating, they can include foreign parts and materials from heading 1806.31.
False
