Canadian translators registered for GST/HST/PST - advice wanted!
Thread poster: Frances Nichol

Frances Nichol  Identity Verified
Canada
Local time: 12:24
Member (2016)
Chinese to English
Apr 5, 2017

Hi there,

I'm a newcomer to Canada and also freelance here, based in Ontario. I've now reached the threshold for registering for HST/GST, I just wanted to check my understanding with other translators, because I feel like translating is quite a specific case, since its a service and income comes from all over the place and in different currencies.

Background: Most customers are abroad, and I receive money in different currencies. But some clients in different provinces in Canada (so far: Alberta, BC, ON).

Can you check my assumptions are correct?

1. Charge the relevant HST/GST/PST for the province I am selling to. Don't charge customers abroad.

2. Signing up for the quick accounting method is best. I don't have many input taxes, and this way I can remit less tax than I charge. I guess I still pay back the full GST + PST from non-participating provinces, is that right?

Anything else I should be aware of?

Thanks!
Frances


 

John Fossey  Identity Verified
Canada
Local time: 10:24
Member (2008)
French to English
Taxes Apr 5, 2017

1. Charge the relevant GST/HST for the province you are selling to.
2. Don't charge PST. For example, when you sell to Quebec from Ontario you will charge 5% GST, but not the QST.
3. Don't charge sales tax for any sales outside Canada.

Do take advantage of any relevant Input Tax Credits (GST or HST) you can, they reduce the tax payable from what you collect from clients.


 

Frances Nichol  Identity Verified
Canada
Local time: 12:24
Member (2016)
Chinese to English
TOPIC STARTER
Thanks for the reply! Apr 5, 2017

It's helpful. I didn't know that I don't charge PST. This page seems to lay out the rules...it's complicated!:

http://canadabusiness.ca/government/taxes-gst-hst/federal-tax-information/overview-of-charging-and-collecting-sales-tax/#toc0

In terms of input taxes, because I don't buy much that includes GST that contributes to my business, I don't think my input taxes will reduce how much I remit to the gov at all. If you use the quick accounting method, then I take 5% GST but only remit the gov. 1.8%. So effectively I'd make 3.2% on each applicable job. The amount varies cos of HST etc too.

Anything else I should watch out for?


 

Laura Messer  Identity Verified
Canada
Member (2014)
Spanish to English
foreign clients Apr 5, 2017

Sales to foreign clients are "zero-rated". This means, as mentioned, the tax rate for those sales is 0%. You will still have to report the sales on your HST return and that no tax applies to those sales.

 

Arianne Farah  Identity Verified
Canada
Local time: 12:24
Member (2008)
English to French
A few tips Apr 5, 2017

Ask for a yearly assessment rather than quarterly - it's a simple form, though I'm sad to say you missed the March 31st cut-off date to do it retroactively for 2017 (you can usually do that as long as your turnover is under 1,5 million dollars, so for freelance translators, it's a no brainer) - my accountant charged 400$ each time she did my paperwork, so it saves me over a grand to do them once a year rather than 4 times a year.

Keep your receipts for anything work related because you can claim back the taxes paid on them (think office furniture, stamps, paper, computers, Internet services, phone, it adds up quicker than you think); credit card bills are not sufficient - you need the receipt with the tax breakdown.

Since you're in a province with a HST, you don't have to worry about PST; you charge HST for clients in Ontario and in the Maritimes and GST only in all other provinces; anything billed outside of Canada is zero rated.

If you have many Canadian clients, do remember to keep track of how much you owe if you don't want to have a nasty surprise at the end of the year.


 

Frances Nichol  Identity Verified
Canada
Local time: 12:24
Member (2016)
Chinese to English
TOPIC STARTER
Thanks for the overview! Apr 6, 2017

Good tip on the annual/quarterly payments - shame I missed it!

I'm a little curious as to why neither of you use the quick accounting method? Is there a reason why you don't?

I really don't spend much on supplies that have HST/GST as many purchases are online from the US or UK, and I spend hardly anything on office supplies. HST on my bills split three ways won't add up to much either. I'm surprised if everyone else is spending so much that it is more than 3.2% of their GST charged!

I know general expenses add up, but much isn't GST/-HST rated, obviously still goes towards reducing income tax bill.


 

Arianne Farah  Identity Verified
Canada
Local time: 12:24
Member (2008)
English to French
Not in my province :-( Apr 6, 2017

Frances Nichol wrote:

I'm a little curious as to why neither of you use the quick accounting method? Is there a reason why you don't?


In my case it's simple; it's not offered in Quebec.


 


To report site rules violations or get help, contact a site moderator:

Moderator(s) of this forum
NancyLynn[Call to this topic]

You can also contact site staff by submitting a support request »

Canadian translators registered for GST/HST/PST - advice wanted!

Advanced search







WordFinder Unlimited
For clarity and excellence

WordFinder is the leading dictionary service that gives you the words you want anywhere, anytime. Access 260+ dictionaries from the world's leading dictionary publishers in virtually any device. Find the right word anywhere, anytime - online or offline.

More info »
BaccS – Business Accounting Software
Modern desktop project management for freelance translators

BaccS makes it easy for translators to manage their projects, schedule tasks, create invoices, and view highly customizable reports. User-friendly, ProZ.com integration, community-driven development – a few reasons BaccS is trusted by translators!

More info »



Forums
  • All of ProZ.com
  • Term search
  • Jobs
  • Forums
  • Multiple search