Harmonized Sales Tax BC
(Previously GST in BC)
Most persons and organizations engaged in commercial activities in Canada who have worldwide, taxable sales of more than $30,000 over any four or fewer consecutive calendar quarters must register for and collect the Harmonized Sales Tax (HST). All taxi and limousine operators must register for HST, regardless of their revenues.
The HST in British Columbia applies to most transactions from manufacturing to marketing and sales. Businesses and organizations registered for the HST in BC are referred to as registrants.
In general, a harmonized sales tax rate of 12% applies to most goods and services in British Columbia.
HST registrants who provide taxable goods or services have to charge and collect the HST on their sales. If the HST collected is greater than the HST paid or payable, the difference is sent to the CRA. If the HST collected is less than the HST paid or payable, a refund can be claimed.
What is the Federal Business Number (BN)?
The BN is issued by the Canada Revenue Agency (CRA) and is used to unify all accounts a business may have with the federal government. The BN is used to operate corporate income tax, import/export accounts, payroll deductions and GST/HST among others.
When should you apply for the Federal Business Number (BN)?
Registration should take place after the company has been registered.
|GST/HST Account Registration||$ 39.95 *|
* Taxes and disbursements are extra, where applicable.
Q. When is HST not charged?
A. The HST is not charged on the following items:
- Basic groceries
- Most health, medical and dental services
- Visiting the doctor or dentist
- Certain medical devices (hearing aids, prescription eyewear, canes, wheelchairs, walkers)
- Prescription drugs
- Legal aid services
- Most financial services
- Many educational services
- Insurance premiums
- Resale housing
Businesses do not collect the provincial portion (seven per cent) of the HST for:
- Fuel to power your vehicle (gasoline, ethanol blends, diesel, biodiesel)
- Child-sized clothing and footwear
- Children’s car seats and car booster seats
- Children’s diapers
- Feminine hygiene products
Q. Why should you register and collect HST?
A. While it is not mandatory for most businesses to register and collect HST until 29 days following the single calendar quarter or four consecutive calendar quarters in which they first exceed worldwide sales of $30,000, we generally recommend that any business register as soon as possible.
Three reasons to register:
1. Unless you are an HST registrant you cannot claim HST input tax credits (HST paid on business expenditures). If you are an HST registrant and your input tax credits exceed HST collected on sales, you may claim a refund of the excess from Canada Revenue Agency. If you're not a registrant the HST paid on expenses is included as part of the expense when computing net income.
2. Not being registered for HST tells everyone that you are running a truly small business. (Your sales are below $30,000 per year) If your customers are other businesses, they expect to pay HST.
3. Companies that are required to register for HST must remit the HST tax to Canada Revenue Agency - even if it has not been collected from the customer. By registering for HST upon starting your business you will eliminate the possibility of inadvertently surpassing the $30,000 threshold and being exposed to penalties and interest charges for noncompliance