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GST and PST Services in Saskatchewan
At Murray, Sen & Associates, we offer comprehensive accounting solutions on Goods and Services Tax (GST) and Provincial Sales Tax (PST) matters to a variety of businesses in Saskatchewan.
Whether you are an owner-managed business or a not-for-profit organization operating in Saskatchewan, we can offer regulatory compliance and reporting services, financial advisory services, and other related accounting services that ensure you stay compliant and avoid hefty fines among other negative implications.
Ready to enjoy our services? Book an appointment now! You can also call us: 306-653-7800 or FAX: 306-653-7801. Find out more about GST & PST in Saskatchewan.
Provincial Sales Tax Saskatchewan: What is PST In Saskatchewan?
PST or Provincial Sales Tax is a sales tax applicable to taxable supplies (goods and services) sold in Saskatchewan. The tax applies to new and used goods consumed in Saskatchewan even if they are made from elsewhere. PST also applies to rental business transactions. At first glance, PST looks like a straightforward tax, however, there are applicable exemptions and exceptions.
That’s where tax and accounting experts like us come in. Let experts at Murray, Sen & Associates handle it for you. Talk to us to know more.
What is GST in Saskatchewan?
GST (or Goods and Services Tax) is a federal sales tax charged by the Canadian government currently at 5%. Canada imposes GST on most goods and services. Provinces also have their own local taxes. Most territories/provinces charge HST or Harmonized Sales Tax, which is a combination of GST and local taxes.
However, Saskatchewan maintains its separate local sales tax (PST) alongside provinces like Manitoba and Quebec. The current PST sales tax rate in Saskatchewan is 6%. As a result, the selling price of goods and services in Saskatchewan (unless exempt) will include both GST and PST.
GST/PST Exemption in Saskatchewan: Which Goods and Services Are Exempt?
It’s worth noting that Saskatchewan has fewer exemptions than other provinces. The goods and services exempt from PST in Saskatchewan include but aren’t limited to: (1)
- Zero-rated supplies or goods/services exempted from GST. Such exempt supplies will also be exempt from PST in Saskatchewan.
- Essential items such as basic groceries, agricultural equipment, reading materials, and prescription drugs/medication.
- Some sports, cultural, and recreational activities. Recent tax credits such as The Active Families Benefit offer tax credits to encourage sports and recreational activities for children and youth (2).
Keep in mind that the Active Families Benefit regulations have eligibility criteria. For instance, tax exemptions only apply to services offered by certain providers in Saskatchewan. There’s a long list of ineligible activities and a procedure that must be followed when claiming this tax benefit.
For instance, benefits are administered via the CRA (Canada Revenue Agency), and an application form must be completed. What’s more, certain documents must be retained for verification purposes.
There’s obviously more to PST/GST exemptions. Consult our PST services experts first to understand all goods and services that are exempt and applicable conditions.
PST Compliance for Businesses in Saskatchewan
If you run a business in Saskatchewan, you are most likely required to collect PST from your customers and remit those tax collections to tax authorities. This is unless you:
- Have gross sales of less than $10,000
- You make and sell products or offer services from your home
- You have already paid PST on supplies and/or equipment you use to produce the goods/services you offer
From the above, a very small percentage of businesses in Saskatchewan -such as small home-based businesses- are exempt from following PST collection requirements. What’s more, you could still be operating from your home by offering an online service, or selling digital services and be required to charge PST. A perfect example is when selling via online marketplaces.
Why Do Saskatchewan Businesses Need Professional Help with PST Compliance?
In order to ensure a smooth process, we recommend businesses hire professional help with their PST compliance. Here’s why:
Reason 1: Businesses Have a Sole Responsibility
Every company/business that meets the set criteria must collect PST from customers and remit the taxes to taxing authorities. Considering most Saskatchewan business owners are expected to be responsible for establishing their eligibility requirements before starting operations and they are also responsible for collecting and remitting PST, the importance of seeking help from PST experts in Saskatchewan can’t be overlooked.
Reason 2: Professionals are Better at Uncovering “Hidden” Tax Incentives
As mentioned, Saskatchewan doesn’t have a Harmonized Sales Tax that combines federal and local taxes. Provinces with HST can offset such retail sales tax against collections. This is applicable if they paid HST when buying supplies or inventory. While such options may not exist for business owners in Saskatchewan, there are still provincial tax incentives for businesses that can be explored.
PST experts in Saskatchewan are best placed to advise on the hidden tax incentives a business can explore based on factors like the industry of operation.
Reason 3: The PST Return Filing Process Can be Complex
You also need professional advice to ensure you meet PST registration rules and PST reporting requirements. Every business in Saskatchewan must pay PST and file PST returns at least once annually depending on factors like the scale of a business. For instance, companies with reported taxes ranging from $4,800 to $12,000 per year must file quarterly (3).
Those with reported PST tax above 12,000 must file monthly. Businesses must also meet the filing period deadline and file by the 20th of the applicable month. Filing requirements are mandatory (whether there is PST tax to report or not) and it is done electronically via SETS (Saskatchewan ETax Service).
Reason 4: Hefty Penalties and Interest for Noncompliance
If your business is supposed to collect PST but you don’t, you are bound to face stiff penalties after an audit process by tax authorities. Any taxpayer (businesses and individuals) in Saskatchewan can be subjected to an audit at any time. Tax authorities conduct audits to establish if taxes have been collected, reported, and submitted correctly.
Tax audits are conducted by auditors in the place of business (field audit) or through a desk audit where a taxpayer is required to provide copies of requested documents (usually financial statements, invoices, general ledger sales/purchases journals, and more). If an audit reveals a problem, you will be charged: (4)
- 10% of the amount assessed as penalties for the tax that should have been collected but wasn’t
- 25% of the amount assessed as penalties for tax collected from customers but not submitted
- 100% of the amount assessed as penalties for tax collected that wilfully wasn’t submitted
Direct penalties aside, you are bound to pay interest on tax that isn’t submitted for the applicable period. Hire PST compliance experts in Saskatchewan to avoid mistakes like inaccurate or late filing.
Reason 5: Complex Audit Appeal Process
If an audit results in tax liabilities, that is hefty fines and interest, you can launch an audit appeal process. You have a right to appeal the process and may reach an agreement on the tax owed, in which case an appeal isn’t required. However, you need expert help to reach a settlement on PST liability.
Experts like us know how to find new information that can lower tax liability after an audit. We can push for information to be reviewed and resolved. We also advise on all matters of PST audit appeal including responding to notices of appeal, stating reasons for appeal, organising legal services (a lawyer) or other professional representation (an accountant) during an appeal, and more.
Don’t attempt to appeal an audit process on your own. Trust true experts like Stewart, Gee, Murray, and Sen CPA LLP who have been offering professional PST Services in Saskatchewan since 2001. Contact us NOW!
GST PST Calculator Saskatchewan
You can find out the precise amount of tax applicable to sales in Canada depending on your location. You simply need to enter the territory (in this case Saskatchewan) and enter the sales volume amount before taxes. This GST PST sales tax calculator will compute the amount automatically.
Get Expert Help with PST Returns, Audit Appeal, PST Compliance, Tax incentives, and Other Financial Services!
Staying compliant and meeting all relevant tax requirements in Saskatchewan can be a daunting task. Unless you are an accounting professional, we suggest you seek expert help.
For more on PST calculations and other related subjects (from types of sales tax to taxable services, other provincial sales taxes, etc.,) talk to PST experts at Murray, Sen & Associates, anytime.
References
[2] Saskatchewan: https://www.saskatchewan.ca/government/news-and-media/2024/february/06/making-life-more-affordable-with-the-active-families-benefit
[3] Saskatchewan:
https://sets.saskatchewan.ca/rptp/wcm/connect/76578852-58f8-45e6-8587-d96b40a4974f/PST+Return+Instructions.pdf?MOD=AJPERES&CVID=nJVN-36
[4] Saskatchewan: https://www.saskatchewan.ca/business/taxes-licensing-and-reporting/provincial-taxes-policies-and-bulletins/tax-audits-and-penalties