GST reporting
Requirement
In this country, the Goods and Services Tax (GST) is an indirect tax. GST is a value added tax and is based on central government. GST is collected on most goods and services. Businesses that are meeting certain criteria are legally required to charge GST on supplied goods and services and in return can reclaim GST paid on purchases.
The Provincial Sales Tax (PST) is a retail sales tax that is levied by provinces. This tax applies when a taxable good or service is purchased, acquired or brought into a province, unless a specific exemption applies.
In some Canadian provinces, the GST is combined with provincial taxes into one Harmonized Sales Tax (HST).
All system transactions relating to trading of goods and services are assigned a VAT code and rate for the type of transaction and the movement of goods between and within countries.
M3 solution
M3 delivers generic functionality that supports the calculation, accounting, reporting, and reconciliation of GST. All businesses in Canada registered for GST are required to submit periodic returns to the tax authorities.
Configuration Guidelines (GST Canada)
| Program ID | Program name | Description or comment |
|---|---|---|
| MNS100/G | Company. Connect Division | Set the GST tax method per division and specify the company tax and GST number. |
| CRS750/F | Settings – General Ledger | Specify this information:
|
| CRS030 CRS031 |
VAT Code. Open VAT Rate. Open |
Configuration – basic principles: GST or HST use M3 VAT Rate 1. QST requires three decimal places. PST can be self-assessed. GST and PST can be non-deductible. To replace VAT codes, use (TXS020). Tax Reporting is based on the M3 VAT code. See the table below for detailed recommendations. |
| CRS395 | Accounting Rule. Set | Configure all GST setups. |
| CRS630 | Accounting Identity. Open | Set the GST account types as required. |
| CRS610/J | Customer. Open | Set the Tax applicable field and specify the GST code. |
| CRS624/F | Supplier. Define Purchase & Financial | Set the Tax applicable field and specify the GST code. |
| MMS001/G | Item. Open | Set the VAT code purch and VAT code sales fields to the GST codes for purchasing and selling. |
| MMS002/I | Item. Connect Warehouse | To open (MMS002), select a record in (MMS001), then select . In (MMS002/I), set the VAT code purch and VAT code sales fields to the GST codes for purchasing and selling. |
| OIS002/F | Customer. Connect Addresses | Optionally, in the VAT reg no field, specify the VAT registration number. |
| TXS005-TXS009 | VAT Report Template. Open | Specify the content required for the provincial sales tax and GST report. |
| TXS020 | VAT Exception. Open | For replacement GST code handling. |
| TXS030 | Fiscal Representation. Open | Complete if relevant. |
| TXS100 | VAT Run. Open | Periodic indirect tax reporting for GST and PST. |
Configuration settings for ‘VAT Code. Open’ (CRS030)
| VAT code | Description | VAT method | PST/QST | Non deductible | S-A PST |
|---|---|---|---|---|---|
| Province AA (GST/HST) | |||||
| 00 | Tax at Zero Rate | 1 or 2 | |||
| 01 | Standard GST or HST | 1 | |||
| 02-04 | Reduced rate GST or HST | 1 | |||
| 05-08 | Non-deductible GST or HST | 1 | Rate 1 | ||
| 09 | Non-Domestic Supplies | 1 | |||
| Province BB (GST and PST) | PST | ||||
| 10 | Zero rate GST with PST | 2 | PST | ||
| 11 | Standard GST and PST | 2 | PST | ||
| 12-14 | Reduced rate GST and/or PST | 2 | PST | ||
| 15-18 | Non-deductible GST or PST | 2 | PST | Rates 1 & 2 | |
| 19 | GST and Self-Assessed PST | 2 | Yes | ||
| Province QQ (GST and QST) | QST | ||||
| 20 | Zero rate GST with QST | 1 | QST | ||
| 21 | Standard GST and QST | 1 | QST | ||
| 22-24 | Reduced rate GST and/or QST | 1 | QST | ||
| 25-28 | Non-deductible GST or QST | 7 | QST | Rates 1 & 2 | |
| 29 | GST and Self-Assessed QST | Yes | |||
| 30-39 | Province CC | 1 | |||
| 40-49 | Province DD | 1 | |||
| 50-59 | Province EE | 1 | |||
| 60-69 | Province FF | 1 | 1 | ||
| 70-79 | Province GG | 1 | 1 | ||
| 80-89 | Province HH | 1 | |||
| 90-99 | Province II | 1 |