Applicable Rates

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The Quick Method of Accounting rates apply only to supplies made in the normal course of your commercial activities. For other transactions, such as the sale of land or of used equipment giving entitlement to capital cost allowance (CCA), you must remit the full amount of GST and QST you collected or were required to collect.

1.8% and 3.4% rates

The applicable rates are 1.8% for the GST and 3.4% for the QST in the case of retailers and wholesalers that purchase goods intended for sale, such as:

  • grocers;
  • booksellers;
  • tobacco vendors; and
  • owners of convenience stores, boutiques and service stations.

For these rates to be used, the cost of the property purchased for sale or for use in other property intended for sale (other than basic groceries and property on which you were not required to pay the taxes at the time of purchase) must represent at least 40% of your total annual taxable supplies.

3.6% and 6.6% rates

The general rates for businesses that are not entitled to use the 1.8% and 3.4% rates and supply mostly services are 3.6% for the GST and 6.6% for the QST. Such businesses include taxi firms, dry cleaners, delivery services, auto repair shops, fast food outlets and travel agencies. Small manufacturers, caterers, photographers and painting contractors can also use these rates.

1% reduction

If you use the Quick Method as of the first day of your fiscal year, or as of your GST and QST registration date, you can apply a 1% reduction to a portion of your taxable supplies (excluding zero-rated supplies). For GST purposes, the 1% reduction applies to the first $30,000 of your taxable supplies (including GST) made during each fiscal year. For QST purposes, the 1% reduction applies to the first $31,421 of your taxable supplies (including QST) made during each fiscal year.

If you file monthly or quarterly returns, the 1% reduction applies to your supplies made during the first reporting period and during all subsequent reporting periods in the fiscal year, until the fiscal year ends or until the amount of supplies reaches $30,000 (for GST purposes) and $31,421 (for QST purposes).

If you file an annual return, the 1% reduction applies to the first $30,000 of supplies (for GST purposes) and the first $31,421 of supplies (for QST purposes) made during the fiscal year.

If your supplies in any fiscal year are under $30,000 (for GST purposes) and $31,421 (for QST purposes), the unused amount cannot be carried forward.

Important

For a given reporting period, you must report the amount of the 1% reduction as an ITC adjustment on line 107 or line 108 of your GST/HST return and as an ITR adjustment on line 207 or line 208 of your QST return, as shown in the example below.

Example of how to calculate the tax amounts payable

A cleaning business used the Quick Method last year. It files quarterly returns. Since its total annual taxable supplies worldwide were not over $400,000 (GST included) and $418,952 (QST included) last year, the business can continue to use the Quick Method this year. The applicable rates are 3.6% for GST purposes and 6.6% for QST purposes.

First quarter GST QST
Taxable supplies for the quarter (GST included) $21,000.00
Taxable supplies for the quarter (QST included) $21,995.00
Applicable rate × 3.6% × 6.6%
Subtotal = $756.00 = $1,451.67
Reduction on the first $30,000 of taxable supplies
($21,000 × 1%)
- $210.001
Reduction on the first $31,421 of taxable supplies
($21,995 × 1%)
- $219.952
Tax remittances for the first quarter = $546.00 = $1,231.72
Notes
  1. Include this amount as an ITC adjustment on line 107 or line 108 of your GST/HST return.
  2. Include this amount as an ITR adjustment on line 207 or line 208 of your QST return.
Second quarter GST QST
Taxable supplies for the quarter (GST included) $15,000
Taxable supplies for the quarter (QST included) $15,710.71
Applicable rate × 3.6% × 6.6%
Subtotal = $540.00 = $1,036.91
Reduction on the first $30,000 of taxable supplies
($30,000 − $21,000) × 1%
- $90.001
Reduction on the first $31,421 of taxable supplies
($31,421 − $21,995) × 1%
- $94.262
Tax remittances for the second quarter = $450.00 = $942.65
Notes
  1. Include this amount as an ITC adjustment on line 107 or line 108 of your GST/HST return.
  2. Include this amount as an ITR adjustment on line 207 or line 208 of your QST return.

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