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Sunday, 10 February 2013 01:04

PST is coming...How can I save money?

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If your business is eligible to claim HST input tax credits, I recommend that any large purchases you are planning are made before April 1, 2013.

This will allow you to claim the entire 12% as an input tax credit, where after April 1, 2013 only the 5% GST can be claimed.

The 7% PST that you pay will only be a corporate income tax deduction at 12.5%.

This can be a big difference on large purchases, so get your financing in line and make these purchases before April 1, 2013.

An example: new computer for $1,000

  1. a)Before April 1, 2013: $120 HST ITC – which means $120 bigger refund or $120 less HST to pay.
  2. b)After April 1, 2013: $50 GST ITC and a $8.75 savings in your corporate tax.

An extra $61.25 in your pocket on $1,000 or 6%.

Greg Kaniewski

Greg Kaniewski graduated from the University of British Columbia in 2007 and obtained his CA designation in 2010 with the largest regional accounting firm. During his tenure, Greg obtained extensive experience in auditing and assurance engagements, corporate and personal tax and estate planning, non-profit organizations and owner-managed businesses.

Surrey Accountant Greg Kaniewski on LinkedIn