B.C.’s HST rate is currently 12 per cent.
Input Tax Credits: Getting Back More of The Tax You Pay
Under the HST, most businesses can recover the sales tax they pay on the goods and services they buy to operate their business. These are called “business inputs” and include products and services such as:
- Office supplies
- Legal services
- Telecommunications equipment and services
- Kitchen equipment
- Cleaning supplies
- Energy used to heat and cool offices
- Electricity used to run offices and equipment
As you know from running your business, Input Tax Credits aren’t new. It’s the same system used prior to July 1. Before the HST, most businesses could only recover the 5 per cent GST paid on business inputs, but couldn’t get back any of the
How Your Customers Can Benefit – Passing On Your Input Tax Credit Savings
Under the old PST system, sales taxes were paid at nearly every step in the production, distribution and sale of a product. This tax was invisible and became part of – or was “embedded” – in the price of the products and services sold by the business. This invisible PST made items more expensive for the final consumer.
Under the HST in B.C., most businesses will see overall cost reductions because they are able to recover any HST they pay on their business inputs by claiming input tax credits.
This gives businesses more flexibility to compete by reducing prices or increasing service to increase sales.
HST and Buying a Business
If you are thinking of starting or buying a business and wondering about the effects of the HST, these Canada Revenue Agency websites may be of particular interest to you.
Learn more About HTC to PST
The PST will be reinstated effective April 1, 2013.
Will the PST be re-implemented at 7%?
British Columbia’s provincial sales tax (PST) will be re-implemented effective April 1, 2013 at a general tax rate of seven per cent
Will all permanent PST exemptions return?
The PST will apply to the same goods and services that were subject to PST prior to the implementation of the HST. All permanent PST exemptions will be re-implemented with the new PST.