Taxes

If the invoice does not report the GST/HST number of the business and you are unable to obtain the GST/HST number from the supplier, then the GST/HST amount will not be paid and only the invoice sub-total amount will be paid. 

If there is doubt as to the validity of the number provided, visit CRA’s webpage  “Confirming a GST/HST account number” to confirm the individual/supplier is authorized to collect GST/HST on their invoices.   

IAW A-FN-105-001/AG-001 Chapter 8 (Sales Taxes) 

With the exception of exempt activities (day cares and housing rentals), NPP operations are considered to be entirely commercial and thus are not entitled to public service body exemptions. Therefore, the exemption from the collection of GST/HST is not allowed for recreation programs, including those for children 14 years of age and under.

Ordinarily, NPP operations will pay GST/HST/QST on purchases, claim this GST/HST/QST as input tax credits and collect GST/HST/QST/PST on all of its consumer sales.  There are cases however, where this general procedure does not apply or applies only in part.  Transfers and wholesale sales between NPP activities are internal transactions and taxes are not normally charged.  There are other cases that require special mention due to their unique nature.  Special cases are dealt with separately and can be found in Chapter 8 (Sales Taxes).

With the exception of “exempt activities” (daycares and rental housing), all NPP operations are considered to be “commercial” activities.  All “commercial” revenues (e.g. Mess/membership dues, sales, door admissions, additional charges for mess functions/mess dinners, etc.) are subject to GST/HST.  Therefore, GST/HST at the rate appropriate to your province or territory is deducted from your gross sales/revenues.

The GST/HST portion of reimbursements (hotels, car rentals, gas and anything else where a receipt is required) is based on the GST/HST for the province where travel took place less 1%.

For Quebec, reimbursements is 9% QST rather than 9.975%.

The GST/HST portion for allowances (per diem rates for meals, incidentals, and kilometric rates) is based on the GST/HST for the province where travel took place.  

For more information, please see the NPP Travel Policy.

The tax rate applicable to the province where the goods are delivered applies.

Yes, if you are paying the company or individual for services performed in Canada (such as performers at a AirShow or professional services), each payment made to them is subject to a 15% withholding tax. This means the payment made to them is reduced by 15% and that 15% withholding tax is remitted to CRA. The company or individual can file a Canadian tax return and request to be reimbursed for the amount of tax withheld but as the payer, we are required to withhold the 15%. The 15% withholding tax does not apply to payments made to companies or individuals for the purchase of goods.

An Input Tax Credit (ITC) is a credit we receive for the GST/HST paid on purchases. The ITC is subtracted from the GST/HST that has been collected on revenues for the same period with the net difference remitted to Canada Revenue Agency.

Similar to the Input Tax Credit (ITC) process, an Input Tax Refund (ITR) is the process whereby QST paid on taxable purchases and services is “refunded”.

As a GST/HST registrant, a NPP entity recovers the GST/HST paid or owed on purchases and expenses related to their commercial activities by claiming Input Tax Credits (ITC). The recovery is done by the local B/W accounting office. ITC’s cannot be claimed for exempt activities (daycares and housing rentals).

Since the external trust/fund is held for custodial services only (i.e. accept and record deposits and issue funds and record withdrawals), it is the external trust/funds responsibility to account for taxes. 

This means that taxes are not deducted on deposits into the external trust/fund nor are they accounted for on purchases made from the external trust/fund. Taxes are the responsibility of the external trust/fund holder. For more information, see A-FN-105 Chapter 1, Annex B.