Pst And Gst Taxes In New Brunswick

New Brunswick, Canada, has a Harmonized Sales Tax (HST) of 15%, which is a combination of a 10% provincial sales tax and a 5% federal sales tax. This rate was adopted on July 1, 2010, and is applied to most goods and services, with some exemptions and rebates available. The HST in New Brunswick is part of the Canadian tax system, which includes three types of sales taxes: PST, GST, and HST. These taxes vary across provinces and territories, and businesses and consumers must be aware of the applicable rates to ensure compliance with tax regulations.

New Brunswick's PST and GST

New Brunswick, a province in Canada, has a Harmonized Sales Tax (HST) of 15%. This tax was adopted on July 1st, 2010, and is made up of a 10% provincial sales tax (PST) and a 5% federal sales tax, known as the Goods and Services Tax (GST).

The HST is applied to most goods and services in New Brunswick, but there are some exemptions and rebates. For example, basic groceries like meats, fish, cereals, dairy, eggs, and vegetables are zero-rated, meaning they are taxable at a rate of 0%. Other goods and services that are zero-rated include prescription drugs and feminine hygiene products.

In addition to the zero-rated goods and services, there are also direct exemptions from the federal portion of the HST. These include residential resales of previously owned and used property, rental accommodations for longer than a month, educational services leading to a certificate or required for a certain practice, medical and dental services, and financial services such as bank fees.

Registered First Nations people in New Brunswick are granted rebates on both the provincial and federal portions of the HST for products and services bought and used on reserves.

It is important to note that the PST rate in New Brunswick was reduced from 8% to 7% as of July 1, 2019. Additionally, the HST rate across Canada increased from 13% to 15% on July 1, 2016. These changes may impact the overall tax rates and calculations for businesses and consumers in New Brunswick.

How PST and GST are calculated

The Goods and Services Tax (GST) is a federal consumption tax that applies to most goods and services purchased in Canada. The GST is currently set at 5% and is imposed by the Canadian federal government to help cover the cost of running the country. Merchants are responsible for collecting GST at the point of sale and remitting those funds back to the Canada Revenue Agency (CRA).

The Provincial Sales Tax (PST) is a consumption tax that is determined by the province or territory where the transaction takes place. The PST rate varies from province to province, as each province has the legislative power to decide whether to impose a sales tax and set the rate. All provinces must enforce the federal GST, but the provincial sales tax is optional.

In New Brunswick, the Harmonized Sales Tax (HST) is charged instead of separate GST and PST. The HST is a combination of the GST and PST into one tax rate. The HST in New Brunswick is 15%, consisting of a 10% provincial sales tax and a 5% federal sales tax.

To calculate the amount of GST and PST paid on a purchase, you can use the following formula:

Amount without sales taxes x (GST rate/100) = Amount of GST

Amount without sales taxes x (PST rate/100) = Amount of PST

Amount without sales tax + GST amount + PST amount = Total amount with sales tax

For example, if you purchase an item in New Brunswick that costs $50 before taxes, the calculation would be as follows:

GST calculation: $50 x (5/100) = $2.50

PST calculation: $50 x (10/100) = $5.00

Total amount with sales tax: $50 + $2.50 + $5.00 = $57.50

Therefore, the total cost of the item, including GST and PST, would be $57.50.

PST and GST rates in other provinces

Canada's tax system can be confusing due to the lack of uniform tax requirements across all provinces. While the Canadian federal goods and services tax (GST) is in force across all provinces, some provinces do not levy a provincial sales tax (PST) at all. These include Yukon, Alberta, Nunavut, and the Northwest Territories.

Some provinces have combined their PST with the GST to form a harmonized sales tax (HST). These include Ontario, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador. In these provinces, the total tax is listed as one line item on invoices.

Other provinces treat the GST and PST separately when it comes to business transactions, listing them as different line items on invoices. These include Manitoba, Saskatchewan, British Columbia, and Quebec. Manitoba refers to its PST as retail sales tax (RST), while Quebec calls its provincial taxes the Quebec Sales Tax (QST).

Provinces with only GST:

• Northwest Territories: 5% GST
• Alberta: 5% GST
• Nunavut: 5% GST
• Yukon: 5% GST

Provinces with HST:

• New Brunswick: 15% HST
• Newfoundland and Labrador: 15% HST
• Nova Scotia: 15% HST
• Ontario: 13% HST
• Prince Edward Island: 15% HST

Provinces that separate GST and PST:

• British Columbia: 5% GST and 7% PST
• Manitoba: 5% GST and 8% RST (Retail Sales Tax)
• Quebec: 5% GST and 9.975% QST (Quebec Sales Tax)
• Saskatchewan: 5% GST and 6% PST

Exemptions and rebates

New Brunswick charges a Harmonized Sales Tax (HST) of 15% on most goods and services. This tax is made up of a 10% provincial sales tax and a 5% federal sales tax. While the HST is applied broadly, there are some exemptions and rebates available.

There are two types of exemptions for the HST in New Brunswick: direct exemptions and zero-rated goods and services. The difference relates to how businesses handle the associated costs, but as a consumer, you pay no HST on items from either category.

Zero-Rated Goods and Services

• Basic groceries, including meats, fish, cereals, dairy products, eggs, vegetables, coffee, and tea. Some foods, including snack foods, liquor, and carbonated beverages, are charged HST.
• Prescription drugs, but not over-the-counter drugs.
• Feminine hygiene products.

Direct Exemptions

• Residential resales of previously owned and used property.
• Rental accommodations for longer than a month.
• Educational services that lead to a certificate or diploma or are required for a certain practice.
• Medical and dental services.
• Financial services such as bank fees.

Registered First Nations people are granted rebates on both the provincial and federal portions of the HST for products and services bought and used on reserves.

The Province of New Brunswick also provides refunds for the 10% provincial component of the HST in the following cases:

• Printed books, audio recordings, and scriptures are taxed at the federal rate of 5% with a point-of-sale rebate for the 10% provincial component.
• Research and Development: The Province refunds the 10% provincial component of the HST on a supply of property and services used directly in research and development by a university.
• Specially Equipped Vehicles: The Province refunds the 10% provincial component of the HST for vehicles purchased in the province that are specially equipped with a device to enable a wheelchair or scooter to enter or leave the vehicle or are fitted with auxiliary driving controls.

How PST and GST affect businesses

New Brunswick, Canada, has a Harmonized Sales Tax (HST) of 15%—a combination of a 10% provincial sales tax and a 5% federal sales tax. This applies to most goods and services, although some are exempt or rebated.

The HST is a value-added tax that applies to all goods and services taxable under the federal Excise Tax Act. Businesses must register with the Canada Revenue Agency (CRA) to collect the GST/HST. This is a single tax that is collected and reported to one government agency, making it simpler for businesses to administer.

The HST rate is dependent on the place of supply, which is where the sale, lease, or supply is made. This means that businesses must be aware of the applicable tax rates in the province or territory where they are making sales. In New Brunswick, the HST is 15%, while in other provinces, such as Alberta, British Columbia, and Quebec, the GST is 5%, and the HST is 13% in Ontario.

Businesses should also be aware of the categories of taxable, non-taxable, and tax-exempt goods and services in the province in which they operate. For example, basic groceries, prescription drugs, and feminine hygiene products are zero-rated and exempt from the federal portion of the HST in New Brunswick. Additionally, certain goods and services are directly exempt from the HST, such as residential resales of property and rental accommodations.

If a business ships goods or services out of its province, it must also be familiar with the PST in the provinces or territories to which it ships and may need to register for PST collection in those locations.

The HST has simplified the tax system for businesses in New Brunswick by combining the federal and provincial sales taxes into a single tax. This has reduced the administrative burden on businesses, which previously had to charge and collect two separate taxes. The HST has also created a more consistent tax system across the province, making it easier for businesses to comply with tax regulations.

Overall, the HST affects businesses in New Brunswick by requiring them to collect and remit the tax on taxable goods and services. Businesses must be aware of the applicable tax rates, exemptions, and their obligations as registrants to ensure compliance with the tax laws.

Frequently asked questions