HST on SFU Purchases and Sales

04/18/23 HST 1

Prepared by:Sabina DiaconescuLarry GuthrieFinancial Services

Tax Components & Rebates

5% CVAT (Canada Value Added Tax)

+7% BCVAT (BC Value Added Tax)

12% HST 67% rebate on CVAT for universities 75% rebate on PVAT for universities Net of HST after rebate

5% - (5% x .67) + 7% - (7% x .75)= 3.40% Point of Sale Rebates eliminate BCVAT Zero – Rated and Educational Exempt purchases have no HST 100% input tax credit on HST if for resale Rebate and ITC’s are HST deducted to only charge net cost to

department accounts

HST 204/18/23

Example of Regular Purchase

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Regular Purchase Amount CVAT BCVAT Total Light Bulbs/Services 100.00 5.00 7.00 112.00 less 67% CVAT Rebate - 3.35 - 3.35 less 75% BCVAT Rebate - 5.25 - 5.25 Net Cost 100.00 1.65 1.75 103.40

Point of Sale Rebates on BCVAT(i.e., vendor does not change 7% BCVAT)

Gasoline, diesel fuel, bio-fuel components for motor vehicles, boats and aircraft

Books Children’s sized clothing and footwear Children’s car seats and booster seats Diapers Feminine hygiene products

Note: 5% CVAT applies where applicable

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Example of Purchase With BCVAT Point of Sale Rebate

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Point of Sale Rebate Amount CVAT BCVAT Total Gasoline 100.00 5.00 - 105.00 less 67% CVAT Rebate - 3.35 - 3.35 less 75% BCVAT Rebate - -Net Cost 100.00 1.65 - 101.65

GST/HST Exempt Supplies (i.e., No HST is charged)Zero-rated supplies

Prescription drugs Medical Devices Basic Groceries Exports of goods and services Travel Services Agriculture and fishing

Educational exemptionsCommon Items:

Credit courses and programs Supplies by some public

bodies Trade or vocational

instructions Camp fees Sales at nominal value Meal plans Library services Fundraising Supplies by charities

HST 604/18/23

Example of Input Tax Credit (ITC) Commercial Purchase & Sale

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Sale Price 1,000.00 HST(12%) 120.00 Total charged to outside customer 1,120.00

Cost of goods purchased to sell 900.00 HST(12%) 108.00 CVAT ITC (5%) recovery - 45.00 BCVAT ITC (7%) recovery - 63.00 Net Cost 900.00 Profit 100.00

Place of Supply Rules

Place of Supply Rules determines the provincial tax component on buying or selling transactions

B.C. is SFU’s normal place of supply with the notable exception of when there is travel outside of B.C.

Travel expense claims completed through self-service will correctly calculate rebate based on the location of purchase selected.

Imports – GST only taxed at the border, must self assess for BCVAT

Interprovincial tax application

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HST – Place of Supply Rules - determine when to charge tax at 5%, 12%, 13%, 13.5% or 15%

Services– tax rate based on recipient of supply address:

If no address obtained, then Canadian portion of where work is primarily performedExceptions for Services where work is done in respect to: Real Property – based on primary location Tangible Personal Property – based on place TPP located Personal services – based on place of performance and if >90% performed in physical

presence of individual to whom the service is rendered Location-specific event – based on location of event Transportation services: passenger based on where the journey starts, freight based on

destination Custom brokerage – based on place goods released for commercial imports or based on

residency of importer for non-commercial imports Postage & mail delivery – based on place purchased unless price >$5 and item is sent to non-

HST province Litigation, Trustee fees – based on province proceeding held Computer related services & internet access – based on location of end user Other – Telecommunication, air navigation, rolling stock

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HST – Property & Services brought into BC for use in BC

Requirement to Self-Assess

- 7% BCVAT on purchases made from non-participating provinces

- 7% BCVAT on outside Canada purchases (ex. US equipment, Livingston, Fedex)

- 12% for Intangible Purchases (consulting services, software)

No Self – Assess

- Purchase made in another HST province or full HST paid on entry to Canada

- If the good/service imported is for use exclusively in commercial activity

Canada Customs collects duty & tax

- 5% federal GST on all imports excluding exempt or zero-rated goods

Note * Provincial portion of HST not collected on commercial imports, MUST self-assess provincial portion

Note ** Items sent by mail valued at <$20 not taxable

HST04/18/23 10

HST 1104/18/23

Tax rates - Interprovincial Purchases & Sales

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GST Provincial HST QST

Alberta 5% British Columbia 12% Effective July 1, 2010Manitoba 5% 7% New Brunswick 13% Newfoundland & Labrador 13% Northwest Territories 5% Nova Scotia 15% Effective July 1, 2010Nunavut 5% Ontario 13% Effective July 1, 2010Prince Edward 5% 10% 10% x(5% x sale price)

Quebec 5% 7.5% 13.5% Effective Jan 1, 20118.5% x(5% x sale price)

Saskatchewan 5% 5% Yukon 5%

Interprovincial transactions

Example – Employee travels to a 3 days conference in Ontario and makes a 2 day stop to University of Alberta for a meeting.

Upon his return the employee completes an expense claim

o $1,130.00 conference fees ($1,000 + $50 CVAT +$80 OVAT)• $ 315.00 hotel accommodation in Calgary ($300 + $15 GST)• $ 63.00 restaurant meals in Calgary ($60 + $3 GST)o $ 339.00 hotel accommodation in Toronto ($300 + $15 CVAT +$24 OVAT)o $ 101.70 restaurant meals in Toronto ($90+ $4.50 +$7.20 OVAT)• $ 22.40 Vancouver airport taxi ($20 + $1CVAT + 1.40 BCVAT)

Note the complexity of applying different provincial tax rates

The Place of Supply Rules determine which tax (5%, 12%, 13% or 12.5%) apply. The 75% BC Rebate only applies to purchases where BC is the “place of supply”

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HST on Sales

SFU is registered for HST purposes If all revenue in cost centre is taxable, the rebate/input

tax credit applying to the cost centre should be 100% HST should be charged as a combined 12% rate on the

invoice, to showing federal and provincial components is optional

Invoices should show the total amount of HST charged or that the amount payable for each taxable item that includes HST at 12%

HST 1404/18/23

Useful websites

http://www.sfu.ca/finance/hst_information/ www.gov.bc.ca/hst www.fin.gc.ca www.fin.gov.bc.ca www.gov.bc.ca/rebates_exemptions

SFU CONTACTS:

Sabina Diaconescu sdiacone@sfu.ca/778-782-7255

Debbie Castagner castagne@sfu.ca/778-782-6899

HST 1504/18/23