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 in iMIS:

  • 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 on the Organization Names window before establishing the specific tax codes used by the different modules of iMIS. After enabling the Canadian taxation method, exit and restart iMIS to implement GST or HST calculations for the Default Organization.

Do the following to enable GST for the Default Organization:

  1. In Advanced Accounting Console, go to File > System Setup to open the System Setup window.
  2. Click Organization Names to open the Organization Names window.
  3. Add or update an organization.
    • If adding a new organization, click New and enter a code for the organization in the Org field.
    • If updating an organization, select an organization from the Org Codes list and click Edit.
  4. Enable the Default Organization option.
  5. Enable the Canadian taxation method option.
  6. Enter the GST/HST Remittance number in the GST/HST Remittance # field.
  7. If licensed for Fundraising, enter the registration number in the Registration Number field.
  8. Click Save, close all windows, and restart iMIS for changes to take effect.

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. In Advanced Accounting Console, go to Settings > Commerce > Set up tables > Tax codes to open the Tax codes window.
  2. Click New.
  3. Define a Code, Title, and tax Rate for the BASE_GST tax code.
  4. Enter the GL Account number (select the lookup icon to look up the account). 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. In Advanced Accounting Console, go to Settings > Commerce > Set up tables > Tax codes to open the Tax codes window.
  2. Click New.
  3. Define a Code, Title, and tax Rate for the BASE_HST tax code.
  4. Enter the GL Account number (select the lookup icon to look up the account). Do not enter a Related Tax because this is the base tax.
  5. Click Save.

Enter a code for the Primary GST. Since the Primary GST relates to the BASE_GST, no GL account number or rate should be entered.

  1. In Advanced Accounting Console, go to Settings > Commerce > Set up tables > Tax codes to open the Tax codes window.
  2. Click New.
  3. Enter a Code and a Title for the provincial tax code.

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

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

Enter 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 enter both a rate and a GL account number. 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 (Orders only)
  • 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. In Advanced Accounting Console, go to Settings > Commerce > Set up tables > Tax codes to open the Tax codes window.
  2. Click New.
  3. Define a Code, Title, and tax Rate for the provincial tax code.
  4. Enter a GL Account number (select the lookup icon to look up an 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, enter the default tax authority that will be used by the default organization using Canadian taxation.

  1. In Advanced Accounting Console, select File > System Setup.
  2. Click Organization Names.
  3. Select the Default Organization from the list of Org Codes.
  4. Click Edit.
  5. In the Tax Authority field, enter GST, or press Ctrl + L and select GST from there.
  6. Click Save.
  7. Exit, and restart iMIS.

When setting up GST and PST calculations for Orders, you must enable Use Taxation for each country for which taxes are collected. To enable GST taxation for individual countries, enable the Use Taxation option on the Country names window.

When the Use 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 Taxation option for each of those countries.

Do the following to enable taxation for a country:

  1. In Advanced Accounting Console, go to Settings > Membership > Set up tables > Country names to open the Country names window.
  2. Add a new country or update an existing country:
    1.  If adding a new country:
      1. Click New.
      2. Enter the name of the Country.
      3. Enter the country’s Mail Group.
      4. Accept the default Address Format.
    2. If updating an existing country, click Edit.
  3. Enable the Use Taxation option.
  4. Click Save.
  5. (optional) To change the address format, click Address Layouts to open the Country Address Layouts window and set up the format.
  6. Close all windows, and restart iMIS for the changes to take effect.

Canadian taxation for Events involves applying appropriate taxes to individual events and event functions. After defining GST/HST tax codes using the Canadian taxation selection in the Organization Names window, 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.

Note: Once you register a customer for event functions designated as GSTINC, you cannot change that registrant's Tax Authority on the Events > Register for an event > Attendee tab until you un-register the customer from the GSTINC functions.

Do the following to assign taxation to an event:

  1. Ensure that the following setup tasks are complete:
    • Enable the Canadian taxation method for the default organization.
    • Define the GST, HST, and PST tax codes as needed.
    • Define the default tax authority.
  2. In Advanced Accounting Console, go to Events > Define an event to open the Define an event window.
  3. Double-click the event to open it in the Define an event window.
  4. Click Edit.
  5. Enter the default tax authority code in the Tax Authority field, or select the field’s lookup icon to search for a tax code.
  6. Tax by Address is implemented for online registrations only and does not apply to Desktop registrations. This 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.
  7. Click Save.

Do the following to assign taxation to an event function:

  1. In Advanced Accounting Console, go to Events > Define an event to open the Define an event window.
  2. Double-click the event that uses GST taxation to open the event in the Define an event window.
  3. Double-click the function to open the Event Function Detail window.
  4. Click Edit.
  5. Enable the GST/HST or PST taxable options.
  6. Click Save.

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 Orders involves enabling the Canadian taxation method option for countries and applying GST taxes to product categories, individual products, and freight and handling charges.

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

When processing orders using Canadian taxation, the Ship to Address’s country and state/province determine which tax authority is used for calculating taxes:

  • If the Use Taxation option is enabled for the Ship to Address’s country on the Country names window, verify whether the Ship to Address’s state/province code matches a tax code defined on the Tax codes window:
    • If a match exists, select the Ship to Address’s state/province code for the order’s Tax Authority on the Orders window (go to Customer Service > Orders).
    • If a match does not exist, set the order’s Tax Authority on the Enter and edit orders window to equal the Tax Authority defined for the Default Organization on the Organization Names window (normally, this is the tax code defined for the Primary GST).
  • If the Use Taxation option is not enabled for the Ship to Address’s country on the Country names window, leave the order’s Tax Authority field blank on theOrders window (go to Customer Service > Orders). No taxes will be charged.
  • For orders for which no country is defined for the Ship to Address, the assumption is that the Ship to customer shares the same home country as the organization and therefore is taxable. For a Ship to Address for which no country is defined, verify whether the Ship to Address’s state/province code matches a tax code defined on the Tax codes window:
    • If a match exists, select the Ship to Address’s state/province code for the order’s Tax Authority on the Orders window (go to Customer Service > Orders).
    • If a match does not exist, set the order’s Tax Authority on the Enter and edit orders window to equal the Tax Authority defined for the Default Organization on the Organization Names window (normally, this is the tax code defined for the Primary GST).

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. In Advanced Accounting Console, go to Commerce > Inventory > Products to open the Products window.
  2. Select a product code from the list of Current Products.
  3. Click Edit.
  4. Enable the Taxable (GST/HST) or Taxable (PST) options.
  5. Click Save.

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. In Advanced Accounting Console, go to Settings > Commerce > Set up tables > Product categories to open the Product categories window.
  2. Select a product category from the list of Current Categories.
  3. Click Edit.
  4. Enable the Taxable (GST) or Taxable (PST) options.
  5. Click Save.

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

  1. In Advanced Accounting Console, go to Settings > Commerce > Configure commerce options to open the Configure commerce options window.
  1. Click Add-on Charges to open the Add-on Charges window.
  1. Click Edit.
  1. Enable the Apply Sales Tax to Freight Charges and Apply Sales Tax to Handling Charges options.
  1. 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 Orders 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