Accounting Ideas

Support Canadian HST Quick Method

Many small businesses utilize the "HST Quick Method" which is a set rate of collection of HST (the usual 13% in ontario for example) yet we only remit 8.8% to CRA, the rest is considered tax free income. So, on collection (in this case), I would have a collection on the invoice of 13%, a tax liability of 8.8%, and a input tax credit of (13% - 8.8%).

No accounting software supports this type of ITC because, I guess, americans don't do it this way. What accountants typically do is add a journal entry at the beginning of the year to adjust for these, but its not ideal.

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  • Sep 10 2021
  • One For The Future
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