HST in Ontario: Helping Business Grow
On July 1st, 2010, the Harmonized Sales Tax (HST) came into effect in Ontario and changed the way your business collects and reports taxes. But did you know that these changes to Ontario's tax system can help you grow your business?
The 13% HST combines the 5% Goods and Services Tax and the 8% Provincial Sales Tax into one tax collected by the federal government.
Your business can take advantage of the new tax rates for capital investments under the HST. By having lower tax rates, you can save money on purchases of new equipment and use the savings to invest in growing your business.
Some of the other changes to Ontario's tax rates include:
- The general Corporate Income Tax is now 12% (previously 14%)
- The Corporate Income Tax for manufacturing and processing is now 10% (previously 12%)
- The small business Corporate Income Tax rate is now 4.5% (previously 5.5%)
- The small business deduction surtax was eliminated
- Fewer small and medium-sized businesses will have to pay the Corporate Minimum Tax: 2.7% (previously 4%)
An easy way to help your business grow is to lower your day to day costs. The less money you spend on daily operations, the more money you may have for business expansion.
Save money by claiming back what you spent on supplies and services, and in some cases, the expenses incurred while running your business which could be tax-free (i.e. employee uniforms, cleaning services, and fixtures).
You can also take advantage of input tax credits. Input tax credits reimburse your business for purchases that were previously PST-exempt but are now covered by the HST.
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