GST HST Quick Method Rates
Do You Meet The Criteria To Use This Method?

by L. Kenway BComm CPB Retired

The Quick Method GST HST rates can be used if you:

• have filed an election on Form GST74 Election and Revocation of an Election to use the Quick Method of Accounting; AND
• have less than $200,000 in sales excluding financial services, goodwill, real property and capital asset sales.

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Ineligible Businesses for this Method

The CRA website says the following businesses are not eligible to use the Quick Method of accounting for GST/HST:

• accountants or bookkeepers;
• tax return preparation services or tax consultants;
• audit services;
• financial consultants;
• lawyers (or law offices);
• notaries public;
• actuaries; or
• listed financial institutions.

My ineligible list is not comprehensive as I have only listed business exclusions. Various public bodies and NPOs are also excluded. See CRA's website for more details.

Bookkeeping-Essentials.ca

A Guide to Understanding GST HST in Canada
Links below open to a page on Bookkeeping-Essentials.ca.

THE BOOKKEEPER'S NOTES ON

How the Quick Method Works

You still charge the applicable GST/HST rate when making a sale.

However, under the Quick Method, only a portion of the sales tax collected gets remitted to CRA. In general, you do not collect input tax credits ... there are some exceptions. The exceptions are reported on Line 106 of your GST/HST return.

The amount you do remit to CRA is determined by preset Quick Method remittance rates, found in the table farther down on this page.

The GST/HST Quick Method has two different class groups:

(1) businesses that provide services; and

(2) businesses that purchase goods for resale.

Make sure you select the correct class group. Each class group is further broken down into participating province (PP) or non-participating province (NPP).

A participating province is a province that charges HST such as Newfoundland, Labrador, New Brunswick, Ontario, Nova Scotia (NS),  ... and between July 2010 to March 2013, British Columbia (BC). PEI became a participating province in April 2013.

A non-participating province is a province that charges GST such as British Columbia (see exception above) Alberta, Saskatchewan, Manitoba,  PEI (prior to April 2013) and the three territories.

You can see that with the new place of supply rules ... and the introduction of different HST rate in Nova Scotia and PEI (and BC for a brief period), this simplified method of accounting may require a bit more paperwork than before.

As of July 1, 2010, you may have to use more than one remittance rate if you have sales in more than one province. This means this method may no longer be "quick" for you as you have to track sales by each quick method tax group ... there are four.

The new place of supply rules did not affect the 1% credit on the first $30,000 of supplies made each year. There is NO change. This credit is entered on Line 107 of your GST/HST return.

Let's take a brief glance at how the new place of supply rules may affect how you file your GST/HST return.

Overview of Place of Supply Rules

Place of supply rules for goods did not change ... and are still based on where the good is delivered to your customer. If your customer was in your store purchasing goods, the customer is located where your store is.

New place of supply rules for services and intangible personal property are now based on the province of the customer which may not be the same place as where the work is performed. If your customer is in a non-participating province (GST), you would charge GST only. If your customer is in a participating province (HST), you would charge HST.

Sales to customers outside of Canada are zero rated.

So here is how the new rules may affect you.

If you only have customers in your province, then all you need to do is find your new Quick Method rate on the table below. Nothing has really changed for you in how you track and report GST/HST.

If you have supplies (sales to customers) in more than one participating and /or non-participating province, you may still only have to use one Quick Method rate when preparing your GST/HST return.

There is a special rule that says if 90% or more of your supplies (sales to customers) were made through your permanent establishment (where your business resides), you can assume all supplies (sales to customers) were made in that province and use the appropriate participating/non-participating Quick Method rate.

However, if you have supplies (sales to customers) in more than one participating and /or non-participating province ... and you don't meet the 90% rule ... you will have to use (and track) more than one rate group.

Current and Historical Rates

GST HST Quick Method Rates - Current

As of April 1, 2013, the participating provinces (PP) are:

• Newfoundland excluding offshore
  
• Labrador
• New Brunswick
• Nova Scotia
• Prince Edward Island excluding offshore
  
• Ontario

and the non-participating provinces (NPP) were:

• Alberta
• Saskatchewan
• Manitoba
• BC (was a PP from July 1, 2010 to March 31, 2013)
• Quebec*
• the three territories.

* While Quebec harmonized on January 1, 2013, they are not considered a participating province as they administrate their own tax.

When you use this method of accounting for GST/HST, you collect the applicable sales tax as usual. You must also track/categorize your sales by the rate paid.

However, when you prepare your GST/HST report on form GST34-2 E or form GST34-3 E, you remit using the Quick Method rates in the tables below.

Check the CRA website for the goods and services that are NOT eligible for the Quick Method rate located at A to Z index>select the letter Q under Topics for GST/HST> Quick Method of accounting.

These amounts are remitted in full and offset by input tax credits you are eligible to claim such as real property and capital asset purchases ... or purchase amounts made before you elected the Quick Method.

To use this table, find your classification in the first column, then follow across. So for example let's assume I am located in BC and provide a photography service to an Ontario resident and an Alberta resident.

For the Ontario client, I would select "Services - supplies made in PP-Oth* to " ... and follow across to the Your Business is in NPP column where the tax rate is 10.5%.

For the Alberta client, I would select "Services - supplies made in NPP to " ... and follow across to the Your Business is in NPP column where the tax rate is 3.6%.

The GST/HST Quick Method rates as of April 1, 2013 are:

Rate Group PP=Participating Province NPP=Non Participating Province	Your business is in PP-PEI	Your business is in PP-NS	Your business is in PP-Oth*	Your business is in NPP
Services
Services supplies made (customers) in NPP to	1.6%	1.4%	1.8%	3.6%
Services supplies made (customers) in PP-Oth* to	8.6%	8.4%	8.8%	10.5%
Services supplies made (customers) in PP-PEI to	9.4%	9.2%	9.6%	11.3%
Services supplies made (customers) in PP-NS to	10.2%	10.0%	10.4%	12%
Goods for resale
Goods for resale supplies made (customers) in NPP to**	0% (3.4% credit)	0% (4.0% credit)	0% (2.8% credit)	1.8%
Goods for resale supplies made (customers) in PP-O* to	3.9%	3.3%	4.4%	8.8%
Goods for resale supplies made (customers) in PP-PEI to	4.7%	4.2%	5.3%	9.6%
Goods for resale supplies made (customers) in PP-NS to	5.6%	5.0%	6.1%	10.4%

*Others = Newfoundland, Labrador, New Brunswick and Ontario

** The credit is entered on Line 106 of your GST/HST return.

You can double check for the correct GST HST Quick Method rate in the CRA publication RC 4058 Quick Method of Accounting for GST/HST. Look in the Table of Contents for the question What are my Quick Method remittance rates?

Quick rates for public bodies can be found in the CRA publication RC4247 The Special Quick Method of Accounting for Public Service Bodies.

GST HST Quick Method Rates - Historical

The rates between July 1, 2010 and March 31, 2013 were:

Rate Group PP=Participating Province NPP=Non Participating Province	Your business is in PP-BC***	Your business is in PP-NS	Your business is in PP-Oth*	Your business is in NPP
Services
Services supplies made (customers) in NPP to	2.1%	1.4%	1.8%	3.6%
Services supplies made (customers) in PP-Oth* to	9.0%	8.4%	8.8%	10.5%
Services supplies made (customers) in PP-BC to	8.2%	7.6%	8.0%	9.7%
Services supplies made (customers) in PP-NS to	10.6%	10.0%	10.4%	12%
Goods for resale
Goods for resale supplies made (customers) in NPP to**	0% (2.3% credit)	0% (4.0% credit)	0% (2.8% credit)	1.8%
Goods for resale supplies made (customers) in PP-O* to	5.0%	3.3%	4.4%	8.8%
Goods for resale supplies made (customers) in PP-BC to	4.1%	2.5%	3.6%	8.0%
Goods for resale supplies made (customers) in PP-NS to	6.6%	5.0%	6.1%	10.4%

*Others = Newfoundland, Labrador, New Brunswick, and Ontario

** The credit is entered on Line 106 of your GST/HST return.

***These rates are only valid between July 2010 and March 2013 as BC returned to GST + PST on April 1, 2013. After March 2013, BC businesses would use the NPP rate.

Rate Group PP=Participating Province NPP=Non Participating Province	Jan 1, 2008 to Jun 30, 2010	Jul 1, 2006 to Dec 31, 2007
Services
Services - supplies made in NPP to permanent establishment in NPP	3.6%	4.3%
Services - supplies made in NPP to permanent establishment in PP	1.8%	2.6%
Services - supplies made in PP to to permanent establishment in NPP	10.5%	11%
Services - supplies made in PP to permanent establishment in PP	8.8%	9.4%
Goods for resale
Goods for resale - supplies made in NPP to permanent establishment in NPP	1.8%	2.2%
Goods for resale - supplies made in NPP to to permanent establishment in PP	0% (2.8% credit)	0% (2.5% credit)
Goods for resale - supplies made in PP to to permanent establishment in NPP	8.8%	9%
Goods for resale - supplies made in PP to to permanent establishment in PP	4.4%	4.7%

This page is only an overview of the Quick Method of accounting. If you are using this method, PLEASE read the CRA publication RC 4058 Quick Method of Accounting for GST/HST.