Finance

Have Finance Questions? Ask a Financial Expert Online.

Ask an Expert,
Get an Answer ASAP!

Finance
This answer was rated:

Does sales tax of BC 12% and ON 13% applies for the sell of

travel services? a) tax applies to...
Does sales tax of BC 12% and ON 13% applies for the sell of travel services?

a) tax applies to sell of travel services outside of Canada to Canadian customers and

b) sell of travel services outside of Canada to customers from outside of Canada.
Show More
Show Less
Ask Your Own Finance Question
Answered in 7 hours by:
11/8/2013
Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4,546
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
Verified
Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

British Columbia -- There is a change after April 1, 2013.

As of April 1, 2013, you will pay a varying percentage of tax in British Columbia. Whether you pay no tax, 5% tax, or 12% tax depends upon the type of service.

Travel services that are still tax exempt (after April 1, 2013):
  • Public transit fares
  • BC Ferries fares
  • Basic groceries
  • International air travel, Continental U.S. flights excluded, when originating in BC
  • International rail, bus, or ship travel (originating in BC)

Travel services that will incur only 5% GST (after April 1, 2013):

 

  • Domestic travel by air, rail or bus (originating in BC)
  • Continental U.S. air travel (originating in BC)
  • Restaurant meals
  • Attraction admission fees, including for passes for ski resorts, museums, theater performances, sports events, and driving ranges
  • Books, newspapers, and magazines
  • Snack foods
  • Taxis
  • Camping sites
  • Massage therapy

Travel services that will incur 5% GST and 7% PST (after April 1, 2013):

 

  • Alcoholic beverages (10% PST)
  • Accommodations (plus any additional hotel tax)
  • Souvenirs

For detailed list refer:


http://www2.gov.bc.ca/assets/gov/topic/BED47DA4EBDBA60A5F28622B8B2E1451/uploads/whats_taxable_whats_not.pdf

 

Ontario -- In Ontario, there is a uniform rate of 13% on all such services. On July 1, 2010 the 13 per cent Harmonized Sales Tax (HST) took effect in Ontario.

 

Since July 1, 2010, instead of paying 13 per cent sales tax to two governments (eight per cent to Ontario and five per cent to the federal government), there is one sales tax – still 13 per cent – collected by the federal government.

 

Further to your question, it would be applicable anyway, if you are selling to canadian residents / non residents or for that matter anyone. It will be applicable on "BOTH" of the scenario that you mentioned in your question.

 

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we get compensated for assisting you. Alternatively please feel free to reply back if you need further assistance.

Warm Regards

 

Ask Your Own Finance Question
Customer reply replied 4 years ago

Thank your detailed answer. Can you please clarify.


 


We are tour operator that sells travel to Russia and Europe. We don't produce any goods in Canada itself, we are just selling service.


 


Our clients are Canadians, as well as international travelers from more then70 countries. For each of the bookings that are made, sales tax will apply?


 


For example, we offer an all inclusive cruise from Moscow to St. Petersburg, and it covers transportation, entrance fees, loging and meals. What sales tax will be due for that?


 


Thank you.

DearvIvan,

Hello and welcome. Thank you for your follow up reply.

On all the bookings and all that you mentioned, it will attract sales tax at 13%. It would be exempt only in those international flights which originate from Canada.

Rest on all -- sales tax would apply.

I a sure this would help.


You may please leave a positive rating if this helps as this is the only way we get compensated for assisting you. Alternatively please feel free to reply back if you need further assistance.

Warm Regards
Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4,546
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
Verified
Rakhi Vasavada and 87 other Finance Specialists are ready to help you
Ask your own question now
Customer reply replied 4 years ago


I actually think that your answer might nit be correct. There are a lot of agencies who work for commission of 10%, and obviously they cannot pay 13% sales tax. They don't charge their customers ether, as we always sell only one set price with no add on taxes. Please advice, how they avoid paying these tax.

Dear Ivan,

I am aware of this. There can be only two possibilities. Either they are selling only those services which are originating from Canada, or, they are evading taxes.

Secondly, there is also possibility that the 10% margin is over and above the sales tax that they must be invoicing.

Apart from this, I am absolutely sure about interpretation the laws and my answer to you.

I am sure this would help.


You may please leave a positive rating if this helps as this is the only way we get compensated for assisting you. Alternatively please feel free to reply back if you need further assistance.

Warm Regards
Ask Your Own Finance Question
Customer reply replied 4 years ago

non service does not originate from Canada, and, these are big and small agencies, like Carlson vagonlit, and I'm sure they are nit avoiding taxes.

 

 

 

I double checked with customers as well. They do not pay additional sales tax. So how canxthey be receiving 10% commission, paying 13% sales tax on whole amount?

 

surely, they don't pay it. If not, what form of business registration, or travel agent status is needed to about it? Our lawyer in Canada told that from his,knowledge sakes,tax is,not paid ether. May be specific provinces?

Dear Ivan,

Hello and welcome again.

I have been going through your question time and again, but I do not see any deviance in what I anwered earlier in two occasions. I am sure that customer may not be paying separately but it must be included in the overall price.

Having said this, this is certainly province specific. You check this out for travel services operating in ON and BC.

For example, let us take travel services. The airline MUST be charging the sales tax. The agents might not be separately charging and the customer would not be seeing them separately. It must be there in the total fare break up from the airline level.

I confirmed this with one of the CRA persons as well and I would still not change the opinion that I gave you before.

Let me know if this helps. If you feel if I have left out on any aspect of your question, still, I shall opt out of this and let other expert assist you with this.

Warm Regards
Ask Your Own Finance Question
Customer reply replied 4 years ago

Thank you, but no, it didn't help.


 


Here is a simple scenario. We are an american company, and we sell 1 complete all inclusive price, no additional taxes.


 


Our canadian customers are coming to us via agent, and buying service for complete price, and agent receiving commission.


 


So, for example, sales price is $1000. Customer paying agent $1000 as well. Agent received $100 from it as a 10% commission. Obviously, he cannot pay 13% or $130 in sales tax. We are sure that customers also not paying additional $130 on top of $1,000.


 


This is a common agent commission practice that happening all the time from small to big agencies, and surely they are not avoiding tax.


 


Particularly, it does not also seems right that 13% tax should be paid at all. Because, all travel industry mark ups are less then that, and usually agencies have 10-12% mark up on services.


 

Dear Ivan,

Thank you for your follow up reply. It is first time I hear that yours is an American corporation.

This explains your situation better. Now going by your example, the Agent in Canada will pay 13% out of his commission. i.e. he pays 13% of $100, which is his commission and not on entire $1000.

The agent would be subject to his ONLY IF he is based in Canada irrespective of his end clients are Canadians or not.

I a sure this would help.

You may please leave a positive rating if this helps as this is the only way we get compensated for assisting you. Alternatively please feel free to reply back if you need further assistance.

Warm Regards
Ask Your Own Finance Question
Ask Rakhi Vasavada Your Own Question
Rakhi Vasavada
Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4,546
4,546 Satisfied Customers
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Rakhi Vasavada is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

4,546 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,218 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,920 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
When applying for a student loan financial aid, how much
When applying for a student loan financial aid, how much does your credit score play in the decision and what if you have a bankruptcy ??… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I run a US based LLC and am unsure what transactions I can
I run a US based LLC and am unsure what transactions I can put on our company card that are kosher for the IRS.For instance, can I include company dinners with employees or prospects on it? Can I incl… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,280 satisfied customers
I am a tax preparer doing tax returns specially for non
Hello, I am a tax preparer doing tax returns specially for non residents,1040NR. My clients are students who work in the US for the summer on a J1 visa,and they return to they country in Europe. So ,u… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Thanks for the quick turn around. question how are gifting
Thanks for the quick turn around. A follow up question how are gifting cryptos in 2017 taxed? I bought few litecoins and the value appreciated . I transferred the litecoins to my Brother as i owe him … read more
Carter McBride
Carter McBride
LLM
247 satisfied customers
I operate a small LLC that provides wedding officiant
Hello. I operate a small LLC that provides wedding officiant services. The LLC is in North Carolina and I now live in California. My two adult children have been helping me by officiating some wedding… read more
taxmanrog
taxmanrog
Master\u0027s Degree
776 satisfied customers
I received a lump sum distribution from Social Security in
I received a lump sum distribution from Social Security in December 2017 for the time period since I turned 66, April 12, 2016, because I have just filed. I chose the lump sum distribution over the in… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I live in Vermont. I have a pension being a State of Vermont
I live in Vermont. I have a pension being a State of Vermont employee. I want to get my social security in 4 months when I'm 62. How much do I pay in taxes with combing both of them … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Bookkeeping for a Personal Injury Attorney Some bills they
Bookkeeping for a Personal Injury AttorneySome bills they receive are for their client's costs that won't be paid until settlement (some times a year later). What makes the most sense for how/where to… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
505 satisfied customers
I have a tax question about New York City taxes. Can you
Hello! I have a tax question about New York City taxes. Can you help me? … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
I am a REALTOR and I am doing my taxes. I have a commission
I am a REALTOR and I am doing my taxes. I have a commission split with my broker. Can I write the portion I split with my broker off on my taxes at all?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I own a small business and purchased a used car for the
I own a small business and purchased a used car for the business. Am I able to deduct the purchase of the used vehicle?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
California: EDD. I don't have any employees at the moment
California: EDD. I don't have any employees at the moment and let go of my payroll service. Could you please tell what form I need to file for the 4th quarter of 2017 & how to file it, mail, online et… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a Deleware corporation and two of our contractors
I have a Deleware corporation and two of our contractors aren't filling out W9's so we can file their 1099's. They are ignoring my emails. Can I say that filling out a W-9 is a legal requirement by Fe… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I have had a lot (about 3 pages worth) if cryptocurrency
I have had a lot (about 3 pages worth) if cryptocurrency transactions for 2017. (Fortunately everything is closed now), but how do I "match up" the purchases and sales for these various kinds of trans… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
LLC expense question. I have an LLC through which I perform
LLC expense question.I have an LLC through which I perform consulting and project management.I am interested in attending a training seminar with an associate who has contracted with me before for thi… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Verview... I am an insurance broker and work for an
verview... I am an insurance broker and work for an insurance agency, however, because I am new to this I receive a salary and a w2, no commissions yet.I also have a consulting business that I perform… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I am partners with my wife in an unused LLC. We help design
I am partners with my wife in an unused LLC. We help design and developer medical products. We sometimes have products and projects that take money from investors to get the ball rolling and for that … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
My husband & I are self employed and have always filed our
Second opinion] My husband & I are self employed and have always filed our tax return with my husband making all the income and I as a house wife. My concern is when it becomes time for social securit… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x