We're launching an online store based in Canada (Ontario) and are curious as to what taxes to charge when shipping out of province? Please correct me if I'm wrong...
I know if we are shipping within province, we would charge the full tax rate. However, the way I understand it is that if shipping to another province with HST, we charge their respective HST rate, Otherwise (if they don't have HST) we would only charge GST (5%) - is this the correct method? Or should I be charging the full tax rate for each respective province?
I wouldn't want to mess this up in case any repercussions when later filing our taxes.
Yes, you've got it right.
It works like this:
IF your company operates in a HST registrant province, (that is a province that collects HST) as you do in Ontario,
THEN You must collect HST when shipping to any other registrant province (like NB) using THEIR HST rate.
AND IF You ship to a non-registrant province (like QC or BC) then you only charge GST (5%) only.
Don't forget taxes are chargeable on products, services, and shipping too
You can co-mingle HST and GST receipts in your accounting records - the govt doesn't mind
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