HST Registration and Psychology

by Jo
(Toronto, ON)

A psychologist's services are exempt from HST but should she still register so she can reclaim HST paid on office equipment etc?

And should all the cashbook postings be net of HST if she is not claiming?


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Hi Jo,

I'm sorry to tell you that services that are rated as GST/HST exempt are not eligible to claim input tax credits. :0(

Take a look at page 8 of the CRA publication RC4022 General Information for GST/HST Registrants. It explains how GST/HST works and has a diagram explaining who can and cannot claim input tax credits.

There are two ways to report GST/HST when you are not a GST/HST registrant.

One method is to record the tax to same account as the purchase or expense.

Another method is to create an expense called Sales Taxes Paid and code all GST/HST paid to this account.

Be aware that there may be instances when the sales tax should be capitalized ... so speak to your accountant about which method is best for your practice.

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