Can businesses recover the HST paid on purchases?
In Alberta, where there is no provincial sales tax, only GST must be levied and collected. GST/HST registrants are entitled to recover GST/HST paid on purchases and expenses related to their business activities.
Is HST collected on sales a liability?
HST Recoverable is a ‘contra’ liability. Businesses are required to file a HST return monthly, quarterly or annually within one month following the end of their reporting period. Note: If a business pays out more HST than it collects, it will receive a refund from the government.
Is HST payable liability?
HST Payable is an ordinary liability account (with a credit balance) because it represents accumulated sales taxes collected by a business from its customers that are due and payable (owing) to the federal government.
Do you pay HST when buying a business?
If the business you purchase includes taxable goods, you may need to remit sales tax to the CRA. However, in certain situations, you do not have to pay GST/HST when you buy a business. To avoid incurring GST/HST, complete Form GST44, Election Concerning the Acquisition of a Business or Part of a Business.
Who is liable for HST?
Who pays the GST/HST? Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services (other than zero-rated supplies). However, Indians and some groups and organizations, such as certain provincial and territorial governments, do not always pay the GST/HST on their purchases.
Do I have to pay GST when buying a business?
If a business is sold and GST applies, the purchaser is usually required to pay an additional 10% of the purchase price at completion to cover the GST. The purchaser will be entitled to get the GST back, through a 10% input tax credit, but the purchaser will not get this input tax credit until after completion.
Are directors personally liable for HST?
HST that the corporation collected, or should have been collected and remitted. normally directors are not personally liable for corporate income tax debt. However, if the director received a benefit, including, for example, a dividend, from his corporation after the tax liability arose, that can change.