Canadian provinces and territories handle taxes in their own ways. As a small business owner, you should know the goods and services taxes (GST) in Canada, the sales taxes in the provinces, and how they apply to your enterprise. Knowing what to do helps keep things running smoothly when you’re transacting business and at tax time.
What Is PST in Canada?
PST stands for provincial sales tax, which is what the tax provinces apply when they don’t participate in the Canadian harmonized sales tax (HST) regime. Instead, they impose provincial taxes. PST is the provincial equivalent of the Canada GST. These provinces charge and collect PST:
There’s no Alberta provincial sales tax.
What Is TVQ/QST in Canada?
TVQ/QST stands for Taxe de Vente du Québec/Quebec Sales Tax. Quebec collects the GST and the QST on sales or supplies of most services and property. The Quebec regime is unique because it’s harmonized with the federal GST for the most part, but the provincial entity, Revenu Québec, administers both taxes in the province.
QST and GST Calculator for Quebec
If you’re making sales, when you calculate QST and GST taxes in Quebec, the rate you use depends on your cash register. Revenu Quebec says your machine would make either a one-stage or two-stage calculation to compute the sales tax in Quebec.
- As of October 2018, you must use the 14.975% rate to calculate the GST and QST on a sales price if your cash register calculates GST and QST using a single stage.
- If your cash register calculates GST and QST in two stages, by calculating 5% GST on the sales price and then calculating the QST on the sales price, you must use the 9.975% rate when calculating the QST, as of October 2018.
Whichever calculation method you use, the rates must not appear on the sales receipts.
It’s important for you to understand the difference in tax requirements between the federal and provincial governments so you can conduct business effectively wherever you are. You want to get everything right and save money. QuickBooks Online can help you maximize your tax deductions. Keep more of what you earn today.