Canadian taxation (GST and HST)

iMIS supports calculation for Canadian federal taxes (GST and HST). This allows you to tailor your organization’s taxation method for both Canada and specific Canadian provinces. Applicable taxes are calculated automatically based on the default Canadian tax authority and customer province.

The tax codes for the GST/HST calculation method need to be set up in iMIS before they can be used. If these tax codes are not defined on the Product_Tax table, any taxes calculated equal zero.

To implement GST/HST calculation, you perform the following tasks:

  • Enable the Canadian taxation method for the Default organization
  • Define the tax codes
  • Define the default Tax authority

Note: When you enable the Canadian taxation method, the VAT or Default taxation method is disabled automatically for an organization. Canadian and VAT taxation methods are mutually exclusive.

The Canadian taxation method must be enabled for the default organization before establishing the specific tax codes used by the different modules of iMIS.

Do the following to enable Canadian taxation for the default organization:

  1. From the Staff site, go to Settings > Finance > Financial entities.
  2. Add or update an organization.
    • If adding a new organization, select Add new financial entity and enter an Organization code.
    • If updating an organization, select the organization you wish to be the default.
  3. Enable Default organization.
  4. Enable the Canadian for the Taxation method.
  5.  Enter the GST/HST remittance number.
  6. If licensed for Fundraising, enter the registration number in the Registration number field.
  7. Click Save & Exit.

Canada has several types of taxes: a Harmonized Sales Tax (HST), a national Goods and Services Tax (GST), and a Provincial Sales Tax (PST).

Note: Verify current tax rates for Canada (http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rts-eng.html) and Quebec (http://www.revenuquebec.ca/en/entreprise/taxes/tvq_tps/) before implementing your codes.

These are the roles of the various tax authorities:

  • BASE_GST - Specifies the GL account for national tax and tax rate.
  • BASE_HST - Specifies the GL account for harmonized tax and tax rate. For multiple rates, create codes for each, for example, BASE_HST12, BASE_HST13, BASE_HST15 (for 12%, 13%, and 15% respectively).
  • Primary GST - (required) Primary GST entry, which relates back to the BASE_GST (no GL account or tax rate should be entered).
  • Primary PST - Specifies the GL account. This is related to BASE_GST and might indicate that PST tax is also applied to the GST tax amount. Use the province abbreviation.

Warning!
Never use the BASE_GST as the primary taxation authority; rather, use BASE_GST as the related taxation authority to calculate the primary PST and GST. As the basis for tax calculation and tracking, the BASE_GST must contain the correct rate and GL account.

The following table is an example of how you might define tax codes across provinces.

Code Title Notes Rate GL Acct Related tax

BASE_GST

Base GST

 

5

GST

 

GST

GST

 

 

 

BASE_GST

BASE_HST12

HST 12%

 

12

HST

 

QC

Quebec

GST at 5%, PST at 9.975%

9.975

 

BASE_GST

You will need to define a code for the base national Goods and Services Tax (GST). The BASE_GST is used as the related taxation authority when calculating the primary GST and PST. Because it is the basis for tax calculation and tracking, the BASE_GST must contain the correct rate and GL account number.

  1. From the Staff site, go to Settings > Finance > Tax codes.
  2. Select Add new tax code.
  3. Define a Code, Name, and tax Rate for the BASE_GST tax code.
  4. Select the GL Account number. Do not enter a Related tax because this is the base tax.
  5. Click Save.

You will need to define a code for the base Harmonized Services Tax (HST). The BASE_HST is used as the related taxation authority when calculating tax for provinces using HST. Because it is the basis for tax calculation and tracking, the code must contain the correct rate and GL account number. For multiple rates, create additional codes: BASE_HST12, BASE_HST13, BASE_HST15 (for 12%, 13%, and 15% respectively).

  1. From the Staff site, go to Settings > Finance > Tax codes.
  2. Select Add new tax code.
  3. Define a Code, Name, and tax Rate for the BASE_HST tax code.
  4. Select the GL Account number. Do not enter a Related tax because this is the base tax.
  5. Click Save.

Define a code for the Primary GST. Since the Primary GST relates to the BASE_GST, no GL Account or Rate should be defined.

  1. From the Staff site, go to Settings > Finance > Tax codes.
  2. Select Add new tax code.
  3. Enter a Code and a Name for the provincial tax code.

    4. Note: Leave the Rate and Account fields blank.

  4. Enter the BASE_GST in the first Related tax field.
  5. Click Save.

Define a code for each province for which taxes will be calculated. A provincial tax code is cross-referenced as the primary taxation authority for an organization, so you will need to define a Rate and a GL Account. In addition, the base national GST will need to be entered as a Related tax.

Some organizations might require provincial tax codes for multiple provinces:

  • Organizations using Multi-Warehousing
  • Organizations with offices in multiple provinces

Note: Organizations that do not charge provincial taxes, such as Australian and New Zealand organizations and PST exempt Canadian organizations, do not need to define provincial tax codes.

Do the following define a provincial tax code (PST):

  1. From the Staff site, go to Settings > Finance > Tax codes.
  2. Select Add new tax code.
  3. Define a Code, Name, and tax Rate for the provincial tax code.
  4. Select a GL Account.
  5. Enter the BASE_GST tax code in the first Related tax field.
  6. Click Save.

After the Canadian tax codes have been defined, define the default tax authority that will be used by the default organization using Canadian taxation.

  1. From the Staff site, go to Settings > Finance > Financial entities.
  2. Select the default organization.
  3. From the Tax authority drop-down, select the GST tax code.
  4. Click Save & Exit.

When setting up GST and PST calculations for commerce transactions, you must enable Use GST/HST/GSTINC style taxation for each country for which taxes are collected. When the Use GST/HST/GSTINC style taxation option is enabled for a country, GST and PST taxes (Canadian) are calculated for orders that ship to customers within that country. If you ship orders to customers in multiple countries that use the Canadian taxation method, enable the Use GST/HST/GSTINC style taxation option for each of those countries.

Do the following to enable taxation for a country:

  1. From the Staff site, go to Settings > Addresses > Countries.
  2. Add a new country, or Select an existing country.
  3. Enable Use GST/HST/GSTINC style taxation.

    4. Note: This option is only available if the default organization's taxation method is set to Canadian.

  4. Click Save.
  5. Repeat the process for all necessary countries.

Canadian taxation for Events involves applying appropriate taxes to individual events and event functions. After defining GST/HST tax codes, you can enter the tax codes for your individual events and event functions.

Because services are consumed in the country in which they are delivered, all customers are considered taxable. Only customers with a nontaxable status are exempt.

Before applying taxation to an event, the following tasks must be complete:

  • The default organization's Taxation method is set to Canadian
  • GST, HST, and PST tax codes are defined as needed
  • The default Tax authority is defined as GST, HST, or PST for the default organization

In order to apply taxation to online registrations, do the following:

  1. From the Staff site, open the desired event for edit:
    1. Go to Events > Find event.
    2. Search for and open the desired event.
    3. From the Showcase tab, select Edit.
  2. Click the Pricing tab.
  3. From the Tax authority drop-down, select the appropriate tax code.
  4. The Tax by address option causes the appropriate tax to be charged based on the province specified in the registrant's preferred shipping address. If that is unavailable, iMIS defaults to the tax authority of the event. Registrants see the HST amounts itemized in their carts and receipts.
  5. Click Save.

Do the following to assign taxation to an event function:

  1. From the Staff site, navigate to the appropriate event.
  2. Open the program item or registration option that you need to assign taxation to:
    • Program items - From the event Showcase tab, scroll down to the Program section, select a program item, then select Edit.
    • Registration options - From the event Showcase tab, select Edit, then click the Pricing tab. From the Registration options section, select a registration option.
  3. Click the Accounting tab.
  4. Enable the GST/HST or PST taxable options.
  5. Click Save & Close.

When a customer registers for an event function, the system will automatically calculate the tax based upon the tax options you have defined for the specific function.

GST calculation for commerce transactions involves enabling the Canadian taxation method option for countries and applying GST taxes to product categories, individual products, and shipping and handling charges.

Shipping and handling taxes are charged in addition to any other taxes that are applied to products sold in the country using GST calculation, and Shipping and handling taxes are calculated on both taxable and nontaxable product purchases.

Ensure that the following setup tasks are complete:

  1. Enable the Canadian taxation method for the default organization.
  2. Define the GST and PST tax codes.
  3. Define the default tax authority.

Do the following to apply taxation to a product:

  1. From the Staff site, go to Commerce > Find products.
  2. Select the product, then select Edit.
  3. Click the Accounting tab.
  4. Enable the Taxable (GST/HST) or (PST) options.
  5. Click Save & Close.

Warning!
Tax settings at the product level override those at the category level. If you enable taxes for a category but not for a product in that category, no taxes are calculated. If you disable taxes for a category but enable taxes for a product in that category, taxes are calculated.

Do the following to apply taxation to a product category:

  1. From the Staff site, go to Settings > Commerce > Product categories.
  2. Select the edit icon for an existing Product Category.
  3. Enable Taxable (GST) and/or Taxable (PST).
  4. Click Save.

Do the following to apply taxation to shipping and handling charges:

  1. From the Staff site, go to Settings > Commerce > System options.
  2. Enable Apply sales tax to shipping charges and Apply sales tax to handling charges.
  3. Click Save.

Certain standard reports and invoices must be edited so that Canadian taxation information (such as GST and HST) displays on a report. For Product or Events invoices, you must clone the invoices and modify the parameters to show the Canadian tax rates on the invoice:

  1. In Advanced Accounting Console, go to Utilities > Report Specs to open the Report Specifications window, from which you can clone and change the following reports:
    • MEETING – Confirmations – Confirmation Letter (Omnis only)
    • MEETING – Invoices – Print Invoices (both)
    • (Simple Order Entry only) SIMPLEOE – Invoices – Print New Invoices (both)
    • Order-Invoices-Activity Menu Items (both)
  2. Scroll and select the report.
  3. Click Clone.
  4. Tab to the Title field.
  5. Add a period in front of the title.

    6. Note: Putting a period at the beginning of the title places the report first in the alphabetical report category, making it the default report used.

  6. In the Title field, modify the title to distinguish it from the original.
  7. Click Parameters to open the Detail Report Parameters window.
  8. In the Parameters text box, enter the text and field contents (press Enter after each line).

    9. The information you enter in the Parameters text box will depend on your organization’s specific tax setup. The following text and field contents are examples of the PST as the tax authority and the GST as the first related tax:

    Total PST:[Orders.TAX_1]
Total GST/HST:[Orders.TAX_2]
GST/HST Remittance Number:[Org_Control.GSTRemitNumber]

    Note: If the <<Message>> line displays in the Parameters text box, do not delete it: doing so prevents the lines following it from printing on the invoice.

    Note: Tax_1 will print the tax calculated for the tax authority entered. Tax_2 will print the first Related Tax. Tax_3 will print the second Related Tax from the Tax Codes table for the Tax Auth used on the order. Org_Control.GSTRemitNumber will display the GST Remittance # on the Organization Names window.

  9. Click Save. For invoice reports, the following information displays at the bottom of the invoice:
    • Total PST
    • Total GST/HST
    • GST/HST Remittance