Harmonized Sales Tax | Toronto Tax Lawyer

What is HST

Defining the Harmonized Sales Tax (HST)

The harmonized sales tax is a form of consumption tax used in Canada. It is found and charged in provinces in which the regional provincial sales tax and the federal goods and services tax have been combined together for one value-added sales tax. This tax came about due to pressure from the federal government for individual Canadian provinces to eliminate their own sales tax systems.

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The HST is collected by the Canada Revenue Agency and then remitted to the participating provinces. The government also issues a GST/HST tax credit that is intended to offset all or some of the taxes paid under this program for low income individuals. This credit eligibility is determine by a person’s previous tax return.

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Business operators who work in any of the provinces with HST have a responsibility to charge and remit the HST. There are some small supplier exceptions for those businesses making less than $30,000 annually. These companies are not required to register for GST/HST. However, some of these businesses still opt to register voluntarily to tap into the Input Tax Credits on the services and goods consumed in the typical course of doing business.

Selling goods and services in and of itself can be difficult for Canadian businesses due to the complex rules, but those doing business with other provinces often opt to hire an experienced tax attorney because of the challenges of accurate tax collection and remission under the HST and GST. Understanding these rules often requires the insight of a knowledgeable HST tax lawyer.

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FAQ’s

For someone to claim a GST rebate, this person needs to have an income of $44,000 or less in the previous period. In the case of a family with children, the net income should be $54,000 or less. The period always goes from July to June of each year, not January to December, as some people seem to think. In order to get a tax rebate, you need to file a personal income tax return first.

It’s easy to know if you’re eligible for GST credit. There are two main aspects to watch out for: age and how much money you made in the last year (from July to June). First, you need to be over 19 years old or have a spouse of this age. If you and your spouse are below 19 years old, you can receive rebates if you have a child. Then, you need to have an income of $44,000 or less in the last year, or $54,000 if you’re married.

Suppliers that are not registered may face some problems, as well as their clients. For instance, they may not charge GST at all, which means that they cannot claim GST, either. This means that you cannot issue an invoice for your supplies legally. For the customers, this means that they can’t use the invoices to claim back taxes. This is why it’s important to register if you have a business and do everything according to the law.

The secret to flip houses successfully in Toronto is to research the market well and know the laws. You need to find a cheap house that’s underpriced and renovate it, selling it for a good profit quickly. It’s also important to know how much you will spend on taxes, too. Before you flip a house, you should know that it’s a good idea to contact a professional for tax services. Taxes can be an unknown cost if you’re not well-informed.