This section discusses how to use QuickBooks to track and report your GST (or HST), PST, and QST.
For detailed information on payment of GST and Provincial taxes, please consult your local Canada Revenue Agency (CRA), the Ministère du Revenu du Québec, or other Provincial agency.
If you use QST, create a new item similar to GST. Choose Lists > Items, and then choose New from the Action pop-up menu (
). The QST item type should be “Other Charge” and the account type should be “Other Current Liability.”
When you're done, your Item list should look something like this:
Name | Description | Type | Account | Price |
GST | GST 123 | Other Charge | GST Payable | 7%* |
QST | Quebec Sales Tax | Other Charge | QST Payable | 8%* |
Subtotal | Subtotal | |||
PST | Provincial Sales Tax | Sales Tax Item | Sales Tax Payable | 6.5%* |
* These tax rates are only examples. Check with your tax agency for the latest rates.
If you use HST instead of GST, edit the GST item to reflect an HST item name, description, payable account name, and tax rate.
Your GST item should be non-taxable (a “T” should NOT appear in the Tax column). QuickBooks calculates and displays the amount of GST owed on this invoice.
Your GST item should be non-taxable (a “T” should NOT appear in the Tax column). QuickBooks calculates and displays the amount of GST owed on this invoice.
Your GST item should show on your invoice as taxable (note the T in the Tax column). If it doesn't show as taxable, click the Tax column. Later, you'll want to edit your GST item to indicate that it's taxable.
QuickBooks calculates and displays the amount of GST owed on this invoice.
If you are a Quebec resident or non-resident conducting business in Quebec, you will need to collect both GST and QST.
Your GST item should show on your invoice as taxable (note the T in the Tax column). If it doesn't show as taxable, click the Tax column. Later, you'll want to edit your GST item to indicate that it's taxable.
QuickBooks calculates and displays the amount of GST owed on this invoice.
When you receive a bill that includes GST, enter information about the amount of GST on the bill in the detail area.
From time to time, you may need to make adjustments to your GST Payable account, either increasing or decreasing the amount you must remit.
These adjustments include writing off the GST amount (7/107) of a bad debt. For example:
Taxable items on invoice | $200.00 |
GST due | $14.00 |
Total | $214.00 |
GST reported in the 4/1/03 - 6/30/03 reporting period | |
No payment received on invoice in 2003 | |
Write off bad debt in 2004 | |
Claim a tax adjustment of 7/107 x $214 = $14 |
QuickBooks provides three standard GST reports: GST Collected, GST Paid, and Sales and Other Revenue.
Your reporting preferences must be set to Accrual.
This report includes all your increases to your GST Payable account; the GST you charged on invoices, credit memos, cash sales, and any adjustments for the specified date range. The total for the reporting period is the total GST collected or collectible.
Important: The Canada Revenue Agency (CRA) considers invoices due on the date you issue them (accrual-based accounting). So in any given reporting period, unpaid invoices with GST must be calculated in the GST “collected and collectible” for that period.
The amount from this report is used to fill in field 105 (Total GST and Adjustments for Period) on your Goods and Services Tax Return.
This report lists all the decreases to your GST Payable account from the tax you paid to vendors and others, as well as any adjustments like the GST included in a bad debt. The total is your input tax credit for the reporting period.
The amount from this report is used to fill in field 108 (Total ITC's and Adjustments) on your Goods and Services Tax Return.
This report calculates your total sales and other revenue without PST and GST amounts collected/collectible.
The amount from this report is used to fill in field 101 (Sales and Other Revenue) on your Goods and Services Tax Return.
You must file a GST return for each reporting period, even if you do not owe money nor expect a refund. For reporting periods with no business transactions, file a nil return.
To complete your form, include payment by writing a check in the Write Checks window (to Receiver General) for the net amount of the GST you owe. Please write your GST number on the check.
As you write invoices, you can view the sales tax liability you are accruing in the Pay PST Liability report and the PST Payable register.
QuickBooks' preset Pay PST Liability report shows how much you owe each tax agency.
Choose Reports > Vendors & Payables > Pay PST Liability Report.
The Pay PST Liability Report shows your total taxable sales, total non-taxable sales, and the amount of sales tax you owe each tax agency as of the date you specified.
Each time you enter a sale that includes sales tax, QuickBooks enters the tax information in your PST Payable register.
Note: QuickBooks keeps track of transactions for all tax vendors in the same PST Payable account.
Use the Pay Sales Tax window to see how much tax you owe and to have QuickBooks write a check to your tax agency or agencies. QuickBooks updates your sales tax account with the payment information. QuickBooks calculates the tax you owe on either a cash basis or an accrual basis.
QuickBooks also updates your sales tax report and PST Payable register to show that you've paid the tax agencies.