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
- a)Before April 1, 2013: $120 HST ITC – which means $120 bigger refund or $120 less HST to pay.
- 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%.
