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Companies are continuously seeking effective ways to cut costs and manage cash. One area that can help the bottom line improve cash flow, and one that most companies do not have the time and resources to explore, is ensuring accurate payment of GST, HST, QST and PST ("commodity taxes").
Canada and the provinces impose their commodity taxes on the sales of goods and rendering of services, rent, and imports of goods and services. GST, HST and QST paid by business enterprises on their purchases are usually refundable within a short period of time.
Commodity Tax Credits and Refunds
A business can generally claim an input tax credit to recover the GST, HST and QST it paid or owes on purchases and expenses it uses, consumes or supplies in its commercial activities. Usually, commercial activities are those undertaken to provide taxable or zero-rated goods or services. In most cases, a business can recover GST, HST and QST paid on marketing and advertising, goods, machines and equipment, rent, exports, business travel, business opportunity expenses, trade shows and conferences.
Benefits of a Commodity Tax Review
- Understand your current situation
We can determine how much commodity tax you currently pay and how many credits or refunds, if any, you receive.
- Review and monitor accounts payable systems
Review your processes and procedures to determine if your accounts payable personnel are applying appropriate account coding.
- Refunds of overpayments/credits not taken
We can help ensure that you capture all available credits and refunds. More often than not adding to your bottom line and increasing cash flow.
- Timeliness
Many credits and refunds expire due to statutes of limitations. We make certain you are taking advantage of credits and refunds in a timely manner.
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