The process of calculating the amount of GST payable for a payment made to the Government of Canada can be complicated, and not always straightforward.
A number of different methods exist, but there are some common misconceptions about calculating the GST amount and its associated payment method.
Before we get into how to calculate the GST checkout amount for a particular payment, it is important to first understand how the GST system works.
The GST system is divided into two main types of payments: direct and indirect.
Direct payments are made directly to the Canadian Government (the “government”) by individuals, businesses, or organizations.
Indirect payments are payments made to a third party that is contracted with the Government.
The first type of payment to be calculated is called a “direct payment”.
The payment will be paid to the Department of Finance, and will be assessed by the CRA as a direct payment.
The CRA will then issue an invoice for the payment.
The other type of direct payment is called an “indirect payment”.
Indirect or “non-direct” payments are paid to a different party, or to an entity outside the Canadian government, that is not part of the Government’s regular business operations.
Indirect payments can be made by individuals or organizations, and are usually made through payroll deduction, employment deduction, or a combination of the two.
Direct or non-direct payments are typically made through payment processors such as Paychex or MoneyGram.
The payment methods used to calculate indirect and direct payments are the same for both direct and non-revenue payments.
The same payment method applies for both types of indirect payments.
Indispensable goods and services can be claimed for tax purposes.
These items include items such as fuel, clothing, or vehicles, which can be taxed as GST/HST.
For example, if an employee who is employed in a construction company pays for his or her work with fuel and clothing, the company will be required to collect GST/HDST.
Indispensable items must be listed on the GST invoice and, if required, the payment will have to be made on a GST/HC/HSA basis.
Independently collected indirect payments are also considered to be income, and therefore subject to the GST/BCS.
Independently obtained indirect payments have no taxable income and, therefore, will not be subject to GST/HMRC.
Independence of GST collectionThe GST/B.C. is the government of Canada, and its collection and enforcement of the GST is governed by the Canada Revenue Agency (CRA).
Under the CRA’s tax laws, GST collection is carried out by a central, provincial or territorial entity (called a “collector”).
The province or territory that collects the GST collects the tax from the individual or business that has collected the GST.
The provinces or territories that do not collect the tax, however, have a responsibility to determine the appropriate amount of tax to be paid.
The CRA considers the tax that the individual is collecting to be the taxable amount of the tax for the calendar year that was the most recent taxable year in which the tax was collected.
The amount of taxes that the CRA is required to withhold and remit to the provinces and territories is known as the “collection tax”.
The CRA can also collect GST for non-recurring items and for transactions that are not GST/WST, which means that the GST or the GST rebate is not subject to tax withholding and remittance by the provinces or territorial governments.
The collection of GST and the withholding and refund of GST are the duties and responsibilities of the collecting government.
The amount of taxable income for a tax year is calculated using the formula:Where:In general, the collection tax is determined using the following table:If the individual has collected all or part of a tax for which there is a collection tax payable, the individual will be considered to have collected all of the taxes for that tax year.
If there is no collection tax, then there is an assessment of the total amount of taxation, and the individual must withhold and pay the GST and/or the GST refund in accordance with the instructions that are contained in the GST payment.
A number of GST payment methods exist.
The following is a list of the methods.
The payment method must be made from the taxpayer’s account on the taxpayer-operated GST account.
A payment can be either direct or indirect.
A direct payment will pay directly to a government, and is subject to a GST assessment and the CRA will collect the GST on behalf of the government.
An indirect payment is a payment that is made by an individual or a third-party to a Government of the Crown.
Indefinite indirect payments can also be made, but the payment must be paid on a regular or periodic basis.
The indirect payment method is assessed by CRA on the basis of the payment method, and there is usually a balance between the amount due and