A GST/HST Holiday: Key Facts For Small Businesses

A GST/HST Holiday: Key Facts For Small Businesses

The Government of Canada has announced a GST holiday from December 14 to February 15, with the Province of Ontario also removing the PST during this period.

Items exempt include:   

• Prepared foods and snacks: Vegetable trays, pre-made meals, salads, sandwiches, chips, candy, granola bars, etc. 
• Dining: Restaurant meals (dine-in, takeout, or delivery). 
• Beverages: Beer, wine, cider, and sake. Pre-mixed "ready-to-drink" alcoholic beverages 7% or less ABV (alcohol by volume). 
• Children's products: Children's clothing, footwear, car seats, diapers, and other important family items. 
• Toys and entertainment: Children's toys (board games, dolls, video game consoles, etc.) and books, print newspapers, and puzzles for all ages. 
• Seasonal items: Christmas trees and other holiday items.

Please visit the government's website for more information and the complete list of items.

How Does This Affect My Business?

• Sales Impact: You won’t charge GST/HST on eligible products during the holiday, potentially boosting sales due to lower prices.
• POS Adjustment: Update your POS system for the GST/HST exemption. Contact your software provider if needed.

Does the GST Holiday Cover Tastings?

• Wine Tastings: All wine is eligible.
• Ready-Made Cocktails/Beverages: Eligible if ABV is 7% or lower.
• Food Tastings: Prepared foods like salads, sandwiches, and platters are included.

Additional FAQs

• Special Paperwork: No extra paperwork is needed, but ensure sales records reflect the exemption for audits.
• Mistaken GST Charges: Refund customers and correct records promptly.
• Business Benefits: Promoting GST-exempt items can attract customers, boost sales, and increase satisfaction.
• Need Help? Contact the CRA or CFIB Business Resources for guidance.
• Penalties for Errors: The CRA focuses on serious non-compliance. Reasonable errors won’t be penalized.

KPMG has published a briefing to help businesses prepare for the tax holiday.

The CFIB is urging the government to introduce a $1,000 small business GST rebate to cover costs and potential errors during the holiday.

CFIB’s special counter sign is designed to ask consumers to be patient and understanding with small businesses that are doing their best to implement the change. Feel free to use the sign.