Get Rc4058

Under the Quick Method, you collect GST and QST in the usual manner. However, you need not claim input tax credits (ITCs) and input tax refunds (ITRs) for your current operating expenses or purchases made in the course of your commercial activities, because the Quick Method takes them into account.

Line 101: Enter the total amount of revenue from supplies of property and services, including zero-rated and exempt supplies, and other revenue for the reporting period. Do not include the following: provincial sales tax. GST.

To calculate your ITCs, you add up the GST/HST paid or payable for each purchase and expense of property and services you acquired, imported, or brought into a participating province. You multiply the amount by the ITC eligibility you can claim. You calculate adjustments for change in use, sales or improvements.

Zero-rated supplies are supplies of property and services that are taxable at the rate of 0%. This means there is no GST/HST charged on these supplies, but GST/HST registrants may be eligible to claim ITCs for the GST/HST paid or payable on property and services acquired to provide these supplies.

HST is a consumer tax which means that businesses are able to claim back any HST they pay on purchases of supplies, expenses ,etc. Any HST paid by the business is tracked in an account called HST Recoverable and is in a debit balance because like Accounts Receivable, it is money owed to the business.

Now, The Quick Method isn't available for everyone. For example, lawyers, accountants, bookkeepers, and financial consultants are among those not permitted to use it. Furthermore, since the Quick Method is geared for small businesses if a business has revenues in excess of $400,000, the Quick Method is not permitted.

When registering for a GST/HST account and in cases where a reporting period is not specified, Canada Revenue Agency (CRA) will assign an annual reporting period; however, the determination of the minimum filing frequency requirement is determined based on the registrant's “threshold amount”.

Instead of totaling Input Tax Credits (ITCs) on all expenses and subtracting them from HST collected on sales, the Quick Method allows HST payable to be calculated based on a percentage of sales. This makes things quicker and simpler for small businesses calculating HST each remittance period.