cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Created with Sketch. Need to update your account details or payment information for QuickBooks Desktop? Click here for our step-by-step guide.
Created with Sketch. Need help running payroll? Watch our video or read the guide in our Product Tutorial.
Level 1

Need help with Zero-rated vs Exempt in Quebec for online subscriptions

Hello guys

 

First time doing this, hopefully, I do it right. I'm having trouble assigning a tax rate to many of the online subscriptions and digital services my business uses. A few examples are Clickfunnels, Squarespace and Fiverr. These companies do not charge GST/QST. The problem is I'm unsure whether to tag it as Zero-rated or Exempt.

 

My accountant sent me this link: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-col... but I still am unsure and I wanted to get a response here from the community as well.

 

Thank you guys so much

Solved
Best answer November 18, 2020

Best Answers
QuickBooks Team

Need help with Zero-rated vs Exempt in Quebec for online subscriptions

Hello Kris,

 

Making sure you're selecting and assigning the correct sales tax codes is a big part of making sure your remittances to the government are correct, so I can appreciate why you're looking for clarification for these two tax codes. Since Zero-Rated and Exempt are both codes that are 0%, it can be a bit confusing to know which is used when, and my goal is to make sure you have the answers you need.

 

It's awesome that you're working with an accountant and that they've sent you that article. While it does have explanations, I do see how they still don't completely clarify the situation when you're not familiar with these kinds of codes. There are some subtle differences between them though, such as being able to collect ITCs when using the Zero-Rated code. I found this blog from a website called The Balance Small Business which may help you: GST/HST Exempt and Zero-Rated Goods and Services in Canada

 

Since you have an accountant, however, that's an asset I recommend taking advantage of. Your accountant should be familiar with your business and will be able to let you know which codes you should use where based on how your business works and what sorts of goods and services you're dealing with.

 

Your accountant can even help you directly in your books. Use the My Accountant tab to invite them on as a user if you haven't already. It's no extra charge to either of you and gives your accountant the opportunity to work in QuickBooks Online when they need to.

 

You may also get some further input from others here in the QuickBooks Community, so keep an eye out for that, but for more immediate help, I recommend working with your accountant. As a tech support team member, I can tell you how to assign a sales tax code, for example, but I can't advise you on which to pick, which is why the accountant is your best option here.

 

Wishing you the best!

View solution in original post

3 Comments
QuickBooks Team

Need help with Zero-rated vs Exempt in Quebec for online subscriptions

Hello Kris,

 

Making sure you're selecting and assigning the correct sales tax codes is a big part of making sure your remittances to the government are correct, so I can appreciate why you're looking for clarification for these two tax codes. Since Zero-Rated and Exempt are both codes that are 0%, it can be a bit confusing to know which is used when, and my goal is to make sure you have the answers you need.

 

It's awesome that you're working with an accountant and that they've sent you that article. While it does have explanations, I do see how they still don't completely clarify the situation when you're not familiar with these kinds of codes. There are some subtle differences between them though, such as being able to collect ITCs when using the Zero-Rated code. I found this blog from a website called The Balance Small Business which may help you: GST/HST Exempt and Zero-Rated Goods and Services in Canada

 

Since you have an accountant, however, that's an asset I recommend taking advantage of. Your accountant should be familiar with your business and will be able to let you know which codes you should use where based on how your business works and what sorts of goods and services you're dealing with.

 

Your accountant can even help you directly in your books. Use the My Accountant tab to invite them on as a user if you haven't already. It's no extra charge to either of you and gives your accountant the opportunity to work in QuickBooks Online when they need to.

 

You may also get some further input from others here in the QuickBooks Community, so keep an eye out for that, but for more immediate help, I recommend working with your accountant. As a tech support team member, I can tell you how to assign a sales tax code, for example, but I can't advise you on which to pick, which is why the accountant is your best option here.

 

Wishing you the best!

View solution in original post

Level 1

Need help with Zero-rated vs Exempt in Quebec for online subscriptions

Thx LauraAB :) I appreciate it.

QuickBooks Team

Need help with Zero-rated vs Exempt in Quebec for online subscriptions

It's my pleasure! I hope you have a great rest of your day.