GST/HST when invoicing a client for kilometers

by Paul
(Ottawa)

Reimbursed travel allowances

Reimbursed travel allowances

Hello


I invoice my client for kilometers. They have advised me to not charge HST on the kilometer part of my invoice. Should I be charging HST?

Thanks.



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Hey Paul,

That's certainly news to me. Can you ask them give you a source reference that states per kilometre travel allowances are GST/HST exempt.

I do know that the CRA employee benefits chart (cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/bnfts/bnchrt-eng.html) shows auto allowances do not include GST. You however are not an employee. Employee auto allowance rules are completely different than billable income / contractor reimbursable expenses.

As far as I know, if you are a GST/HST registrant, you charge the sales tax unless it exempt or zero rated.

When stuff like this happens, I like to call CRA and ask them for a ruling. If you don't want to do that and ...

... You can't come to an agreement with your client but don't want to argue, I would bill them the agreed upon rate excluding sales tax then charge sales tax. The net effect to them is the same ... better actually as they now have an ITC ... and you have charged sales tax on your income.

To calculate the sales tax on a 55 cent rate (Treasury Board kilometric rate in Ontario) is as follows:

55 / 1.13 = 48.67 (invoiced amount) x 13% HST = 6.32 (HST collected)

The next time your renegotiate your contract, I would lay out your reimbursement rate more clearly.




Comments for GST/HST when invoicing a client for kilometers

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Mar 15, 2014
GST/HST on Kilometers
by: Anonymous

Thanks! Really helps.

Now that I review my initial question I realize that I missed some information.

I am a captured independent wholesale field salesman. My company is incorporated and I invoice this client.

I found it strange that they requested an invoice without HST/GST on the kilometers.

Thanks again.

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