If you sell taxable goods and services, you may need to remit goods and services tax or harmonized sales tax to the Canada Revenue Agency. However, you are also allowed to claim an input tax credit for the GST/HST you pay on business expenses. Your net tax is the difference between these two amounts, and to calculate net tax for quarterly or annual GST/HST returns, you should take the following steps:
- Add up the total of all the GST/HST you collected over the reporting period.
- Figure out how much GST/HST you paid on business purchases.
- Subtract what you collected from what you paid.
- The difference is your net tax and the amount you should submit to the CRA.