Edmonton

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Sales Tax (GST)

Information on the Goods and Services Tax (GST) added to purchases in Edmonton.

Sections

1. Overview of GST in Edmonton, Canada

  • What is GST?

    • The Goods and Services Tax (GST) is a federal value-added tax applied to most goods and services sold or provided in Canada, including Edmonton, Alberta.
    • The GST rate across Canada is 5%, and there is no additional provincial sales tax (PST) in Alberta. This makes Alberta unique compared to other provinces, where combined sales taxes (GST + PST or HST) are often higher.

  • Who Pays GST?

    • GST is paid by consumers when they purchase taxable goods and services.
    • Businesses collect GST on behalf of the government and remit it to the Canada Revenue Agency (CRA).

2. GST Rates and Categories

  • Standard GST Rate: 5% on most goods and services.

  • Exemptions: Certain goods and services are exempt from GST, meaning no tax is charged. Examples include:

    • Basic groceries (e.g., fresh fruits, vegetables, bread, milk).
    • Residential rent.
    • Most health care services (e.g., doctor visits, dental care).
    • Educational services (e.g., tuition fees for schools, colleges, and universities).
    • Childcare services.
    • Financial services (e.g., bank fees, insurance premiums).

  • Zero-Rated Goods and Services: These are taxable at 0%, meaning businesses can claim input tax credits for GST paid on expenses related to these goods/services. Examples include:

    • Prescription medications.
    • Medical devices (e.g., hearing aids, wheelchairs).
    • Exports (goods/services sold outside Canada).

3. GST for Visitors

  • What Visitors Should Know:

    • As a visitor to Edmonton, you will pay GST on most purchases, such as dining, shopping, and entertainment.
    • Unlike some countries, Canada does not offer a GST refund program for tourists. This means you cannot claim back the GST you pay during your visit.

  • Tips for Visitors:

    • When budgeting for your trip, remember that prices displayed in stores or restaurants often do not include GST. The 5% tax will be added at checkout.
    • If you are dining out, note that tipping (15-20% of the pre-tax bill) is customary in Canada and is not included in the GST.

4. GST for Immigrants

  • Understanding GST as a New Resident:

    • As an immigrant settling in Edmonton, you will encounter GST in your daily purchases and services.
    • If you start a business, you may need to register for a GST account (see below for details).

  • GST Credit for Low-Income Residents:

    • The GST/HST Credit is a tax-free quarterly payment provided to low- and modest-income individuals and families to offset the GST they pay.
    • Eligibility: You must file a tax return to receive this credit, even if you have no income.
    • For more information, visit the CRA website: GST/HST Credit.

5. GST for Businesses

  • Who Needs to Register for GST?

    • Businesses in Edmonton must register for a GST account with the CRA if their annual revenue exceeds $30,000 (small supplier threshold).
    • Even if your revenue is below this threshold, you can voluntarily register to claim input tax credits.

  • How to Register:

    • Online through the CRAโ€™s My Business Account portal.
    • By mail or phone (1-800-959-5525).
    • You will receive a GST/HST number upon registration.

  • Collecting and Remitting GST:

    • Businesses must charge 5% GST on taxable goods and services.
    • GST collected must be remitted to the CRA, typically on a quarterly or annual basis, depending on your business size and revenue.

  • Input Tax Credits (ITCs):

    • Businesses can claim ITCs to recover GST paid on business-related expenses (e.g., office supplies, equipment, rent).

  • Filing GST Returns:

    • GST returns can be filed online through the CRAโ€™s My Business Account.
    • Deadlines depend on your reporting period (monthly, quarterly, or annually).

6. Important Considerations

  • GST on Online Purchases:

    • If you shop online, GST is generally applied to purchases from Canadian retailers. For international purchases, GST may be charged at the border when the item is imported.

  • GST on Housing:

    • If you buy a new home in Edmonton, GST applies to the purchase price. However, there are rebates available for new homebuyers under certain conditions.

  • GST on Used Goods:

    • Private sales of used goods (e.g., buying a car from an individual) are generally exempt from GST. However, GST applies if you buy from a registered business.

7. Local Resources for GST Information

  • Canada Revenue Agency (CRA):

    • The CRA is the primary source for all GST-related information, including registration, filing, and claiming credits.
    • Website: CRA GST/HST Information
    • Phone: 1-800-959-5525 (for general inquiries).

  • Edmonton Business Support Services:

    • Business Link Alberta: Offers resources and advice for small businesses, including GST guidance.
    • Edmonton Chamber of Commerce: Provides support for local businesses, including tax-related workshops.

  • Local Tax Professionals:

    • If you need personalized assistance, consider consulting a tax professional or accountant in Edmonton. Many firms specialize in helping newcomers and small businesses navigate GST requirements.

8. Practical Example of GST Costs

  • Scenario 1: Dining Out

    • Meal cost: $50
    • GST (5%): $2.50
    • Total: $52.50 (plus tip, if applicable).

  • Scenario 2: Shopping

    • Item cost: $100
    • GST (5%): $5
    • Total: $105.

9. Key Takeaways

  • Edmonton has a straightforward tax system with only the 5% federal GST and no additional provincial sales tax.
  • Visitors should budget for GST on most purchases, while immigrants should familiarize themselves with GST credits and business requirements.
  • Businesses must register for GST if their revenue exceeds $30,000 and are responsible for collecting and remitting the tax.
  • Use the CRA website or local resources like Business Link Alberta for up-to-date information and assistance.

If you have further questions or need clarification, feel free to ask!