HST Charitable Organization

by Maria
(Toronto)

Could you explain how to make the journal entry for a charitable organization (which is eligible for a Public Service Body rebate) on their purchase?

Example: paying advertisement $100, HST $13. Thanks a lot.

Hi Maria,

This site was developed to help sole proprietors do their own books. I haven't worked with the PSB rebates but here's my best guess:

According to the CRA website article on Public Service Bodies' Rebates at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rbts/psb/menu-eng.html, charitable organizations are eligible for a 50% rebate of the federal portion of HST. Ontario charities can claim a rebate of 82% on the provincial portion.

Therefore I would book my entry as follows:

Dr Advertising expense $100
Dr Non rebatable sales tax $2.50 (for federal portion of HST)
Dr Non rebatable sales tax $1.44 (for provincial portion of HST)
Dr GST/HST Payable $2.50 + $6.56 = $9.06 (rebatable portion of HST)
Cr Cash in Bank $113.00

where Non refundable sales tax is an expense account on your income statement.












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