Canadian Taxes - PST and GST

[accrete]

April 1, 2013 British Columbia is dumping the HST and going back to PST and GST.

You are supposed to show both as separate items to the consumer.

Tried
-setting the tax to by Zip code and entered PST for BC.
-also checked postal code tax rate and VAT/GST in country screen

It is
-only calculating the PST
-1st screen in cart just says Tax
-2nd screen in cart says Tax Total: British Columbia Tax (7.00%)

How do I
-get it to show the taxes separately
-calculate the GST on the total sale (GST is not charged on PST amount)

[Jim]

ShopSite will only display one tax to the shopper. Using the Tax by Zip method you can include the GST and PST rates as a combined rate for BC and then set another tax zone for the other provinces and have that rate set at the GST.

I believe the AvaTax option can also be used in Canada and they would handle the tax rates for the various provinces.

[accrete]

I'm pretty sure this would not be a Canadian specific issue.

From our Federal Revenue Department:

Invoicing requirements
Disclosure of tax
s 223
35. The Act imposes certain requirements with respect to the disclosure of the tax on
invoices, receipts or written agreements to provide recipients with sufficient information
to enable them to ascertain whether they have satisfied their liability to pay tax on taxable
supplies. A person who makes a taxable supply must furnish, upon request, sufficient
information, in writing, to substantiate a claim for an input tax credit (ITC) or rebate.

Disclosure of tax
ss 223(1) and (1.1)
36. Registrants who make taxable supplies (other than zero-rated supplies) of goods
and services and are required to collect the tax must disclose to the recipients that the tax
has been charged on the supplies in one of the following three ways:
(a) by indicating on receipts, invoices or in written agreements the consideration paid or
payable by the recipient and the actual amount of tax payable in respect of the supply
in a manner that clearly indicates the amount of tax;
(b) by indicating on receipts, invoices or in written agreements that the amount paid or
payable includes the tax payable in respect of the supply; or
(c) if the registrant chooses to indicate the tax on invoices, receipts or written
agreements, the total amount of tax payable or the total of the rates (7% or 15%) at
which tax is payable must be indicated on the invoices, receipts or agreements.

Page 8 15-1-e.pdf http://www.cra-arc.gc.ca/E/pub/gm/15-1/15-1-e.pdf (opens PDF)

Reference in this publication is made to supplies that are subject to the GST or the HST. Effective July 1, 2010, the HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 15% in Nova Scotia, and 12% in British Columbia. The GST applies in the rest of Canada at the rate of 5%.

http://www.cra-arc.gc.ca/E/pub/gm/15-1/README.html

When BC goes back to PST and GST in April, the PST rules had a similar requirement but their website is lacking this info at the moment.

It doesn't look like AvaTax would solve my problem, unless I didn't find the right information.

[Jim]

I am not a tax attorney but from what I read in the sections you quoted, there is nothing that says that each tax entities tax must be broken out on the receipt. In fact this statement indicates that they may be combined.

Code: Select all

if the registrant chooses to indicate the tax on invoices, receipts or written
agreements, the total amount of tax payable or the total of the rates (7% or 15%) at
which tax is payable must be indicated on the invoices, receipts or agreements.

If you must charge tax on the tax then you just need to compute the tax rate such that when you multiple any product by the rate it gives the proper value. IE. if BC tax is 10% and GST is 5 % and you must charge the GST on the BC tax then the tax rate would be 10% +5% +(5% X10%) or 15.5% so a $100.00 product would have a total of $15.50 tax and the total would be 115.50. Similarly and a $50.00 product would have 7.50 tax and a total of $57.50.
A simple statement on the checkout and receipt of what the tax rate is should suffice the requirements. You could add the tax rate to the name of the tax entity on the Tax by Zip config screen so it would be like "BC Tax 10% +GST 5%" and for the other provinces GST 5%