Quick Method of Accounting for GST/HST: New rates
July 2010
The following tables reflect the remittance rates that are effective July 1, 2010 for GST/HST registrants who have elected to use the Quick Method. The new rates reflect changes to the place of supply rules for services and intangibles and the fact that Ontario became an HST-participating province on July 1, 2010.
For a supply of goods, services or intangibles before July 1, 2010, the old remittance rates apply. As well, the credit of 1% on the first $30,000 of supplies made each year remains unchanged.
The place of supply rules for goods remain unchanged; in general, the province where the good is delivered will determine what GST/HST is charged on the supply.
The new place of supply rules for services and most intangible personal property have changed significantly. In general, the province of the recipient will determine what GST/HST is charged on these supplies, not necessarily where the work is performed.
For GST/HST registrants electing to use the Quick Method who supply services or intangibles only within Ontario the new remittance rate is 8.8% as highlighted in the table below. If this is the case with your business you do not need to read any further.
Remittance rates on or after July 1, 2010 for businesses that provide services or intangible personal property
| Permanent establishment in: | ||||
| Non-participating province | British Columbia | Nova Scotia | Other participating province (including Ontario) | |
| Supplies made in a non-participating province | 3.6% | 2.1% | 1.4% | 1.8% |
| Supplies made in the participating province of British Columbia | 9.7% | 8.2% | 7.6% | 8.0% |
| Supplies made in the participating province of Nova Scotia | 12.0% | 10.6% | 10.0% | 10.4% |
| Supplies made in the other participating provinces (including Ontario) | 10.5% | 9.0% | 8.4% | 8.8% |
Examples:
- An Ontario business performs services for an Ontario resident. The Quick Method remittance rate is 8.8%
- An Ontario business has a consulting contract exclusively with a Quebec-based firm. The Quick Method remittance rate is 1.8%.
Remittance rates on or after July 1, 2010 for businesses that purchase goods for resale
| Permanent establishment in: | ||||
| Non-participating province | British Columbia | Nova Scotia | Other participating province (including Ontario) | |
| Sales made in a non-participating province | 1.8% | 0% (and 2.3% credit) | 0% (and 4% credit) | 0% (and 2.8% credit) |
| Sales made in the participating province of British Columbia | 8.0% | 4.1% | 2.5% | 3.6% |
| Sales made in the participating province of Nova Scotia | 10.4% | 6.6% | 5.0% | 6.1% |
| Sales made in the other participating provinces (including Ontario) | 8.8% | 5.0 | 3.3% | 4.4% |
Registrants with a permanent establishment in a participating province that use the 0% remittance rate for eligible sales in a non-participating province on or after July 1, 2010, are entitled to a credit on those sales (see credit amounts in the chart above) as they generally pay HST on their inputs, but collect 5% GST on those sales.
This credit is in addition to the 1% credit on the first $30,000 of eligible supplies.
Examples:
- An Ontario business sells goods only in Ontario (and nothing is shipped out of province). The Quick Method remittance rate is 4.4%
- An Ontario business ships goods to a Quebec purchaser. The Quick Method remittance rate is 0% and the registrant would also be able to claim a credit of 2.8% of sales. See section below on Supplies made in both participating and non-participating provinces on special rules where sales are made in more than one province.
Supplies made in both participating and non-participating provinces
For supplies in both participating and non-participating provinces, you normally have to use more than one remittance rate. However, special rules apply when 90% or more of the supplies were made through a permanent establishment in either a participating province or a non-participating province. These rules are as follows:
- If 90% or more of the supplies are made in participating provinces, assume all such supplies were made in a participating province and use that rate.
- If 90% or more of the supplies are made in a non-participating provinces, assume all such supplies were made in a non-participating province and use that rate.
If neither of these situations applies to you, you have to use more than one remittance rate. This will mean that you will have to track your sales according to the province of the recipient. For example, separate sales accounts are required to distinguish sales in Ontario from sales in Quebec as the remittance rates are different.
Example:
- A business with a permanent establishment in Ontario has consulting contracts with two clients: one in Ontario and one in Quebec. The Ontario business charges the Ontario client 13% HST and the Quebec firm 5% GST on revenues. The Ontario contract ($40,000) represents 40% of the total revenue and the Quebec contract ($60,000) represents 60% of the total revenue.
Quick Method calculation: (assuming an annual filer)
Sales incl GST/HST Remittance Rate Remittance Amount Ontario contract $45,200 8.8% $3,978 Quebec contract $63,000 1.8% $1,134 GST/HST return line 103 $5,112 Deduct 1% for the first $30,000 of eligible sales: GST/HST return line 107 (300) GST remittance: GST/HST return line 115 $4,812
For more information on the above or assistance in calculating your GST/HST remittance, please do not hesitate to contact us. Alternatively you can access CRA publication RC4058 Quick Method of Accounting for GST/HST at www.cra-arc.gc.ca
Print this page ]