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What do all the "0% Purchases" options in the GST/HST drop down menu mean?

This is a 2 part question. QB is telling me I need to assign a HST/GST type to a monthly bank account fee I am trying to add as an expense but I don't know which option to select (I assume it's 0% tax). I have the following options but don't know which one applies or what all the 0% purchase options mean. Can anyone tell me what to select but also expand on what each option is used for?

Exempt (0% Purchases)
Zero Rated (0% Purchases)
Out of Scope (0% Purchases)
HST ON (13% Purchases)

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Best answer 03-11-2019

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Anonymous
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This is just about getting to know the GST rules - which...

This is just about getting to know the GST rules - which must have changed since i have no idea what "Out of Scope" is.  But for the others:

"Exempt" is a class of services which are always exempt from GST - these services are defined in the GST regulations. examples: Interest, life insurance premiums, federal & provincial taxes.

"Zero Rated" is for goods/services that are normally taxable - but in special situations the tax is not charged - ie: exported goods

"HST ON" is just your 'normal' taxable goods in Ontario where they have a combined sales tax called HST (instead of a PST+GST system). HST operates exactly like GST except for the rate.

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Anonymous
Not applicable

This is just about getting to know the GST rules - which...

This is just about getting to know the GST rules - which must have changed since i have no idea what "Out of Scope" is.  But for the others:

"Exempt" is a class of services which are always exempt from GST - these services are defined in the GST regulations. examples: Interest, life insurance premiums, federal & provincial taxes.

"Zero Rated" is for goods/services that are normally taxable - but in special situations the tax is not charged - ie: exported goods

"HST ON" is just your 'normal' taxable goods in Ontario where they have a combined sales tax called HST (instead of a PST+GST system). HST operates exactly like GST except for the rate.

View solution in original post

Not applicable

Re: This is just about getting to know the GST rules - which...

What about purchases for software or memberships online(US BASED) that do not charge tax ? Would that be out of scope ? If I'm getting paid for items sold in the US , where I am not collecting GST , what rate would I use for the deposits  ?

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Re: This is just about getting to know the GST rules - which...

What about purchases of food supplies (for resale as taxable meals)?  Are they zero rated or exempt?

Anonymous
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Re: This is just about getting to know the GST rules - which...

All purchases and sales outside of Canada can be classed as 'Z' for gst

Anonymous
Not applicable

Re: This is just about getting to know the GST rules - which...

If you're buying goods in Canada and are not being charged GST then it must be "Exempt"