Filing HST/GST is something that many small companies in Canada have to do every few months. It’s not particularly hard for an app company, at least in my experience, but like many tax processes in Canada it’s not that intuitive or clear either. 🙄 So, I put together a basic workflow that I use (and regularly revise), and want to share it here.
This workflow is particular to our company’s structure, but there are many other companies in a similar boat. We are an incorporated app company in Ontario that gets revenue from a) Apple App Store sales, and b) consulting. I should also stress that I am not an accountant and this could all be completely wrong. But, it’s what I use and after a few chats with the Canada Revenue Agency (CRA), I think I’ve got it:
- Find all your expense receipts from the tax period (e.g., January 1–March 31, 2016).
- Sum all HST amounts, but only consider half the HST from expenses categorized as “Meals and Entertainment.” For me, that’s stuff like buying a meal or drink during a work or feedback meeting.
- Find all the GST/HST Tax advice documents that Apple’s sent you throughout the tax period.
- Sum up the GST/HST @ 13.00% amounts. That’s how much you paid to Apple to do the selling.
- Login to iTunes Connect, click “Payments and Financial Reports” and then sum up the income from the months in your tax period (e.g., January, February, March).
- Go to the CRA website and click CRA login. Proceed through all the login pages. (I believe you’ll need to set this up if it’s your first time.)
- Once you’re in, you’ll see “Welcome YOUR-NAME-IN-ALL-CAPS.”
- Click on GST/HST -> View expected and filed returns. Write down the reporting period of the return you need to file.
- Go back to the main page and now click on GST/HST -> File a return
- Select the GST34 return.
- Enter the reporting period and answer all the “Yes / No” questions (I’m a “No” all across the board). Click next.
- Fill in lines 101, 105, and 108.
- Line 101: Sales and other revenue. For our company that’s our consulting income (HST not included) and Apple App Store sales (from Step 3 above).
- Line 105: Total GST/HST and adjustments for period. This is all the HST you collected. Because Apple takes care of this for app sales, this number is just the sum of HST we collected for consulting.
- Line 108: Total ITCs and adjustments. This is all the HST you paid out for business expenses, which will include the amounts from Step 1-1 and Step 2-1 above.
- Double check your numbers and submit!
If you have any questions about filing HST for your company, I’d recommend calling CRA at 1-800-959-5525. They’ve actually been pretty helpful in my experience. If you have any suggestions or corrections, please share in the comments below.
EDIT (160503): After a tweet from Greg Heo, I gave the CRA another call to clarify things: Line 101 should include all App Store income, not just the Canadian stuff. I’ve updated the blog post to reflect this, and you can find out more in this post.