Canada Tax Overview

Modified on Thu, 07 Sep 2023 at 04:16 PM

Floranext is excited to announce a new feature that will more robustly support our Canadian florists. The new Canada Tax feature will

Make it easier to see GST, PST and HST collected to make tax season a breeze.
Display business number and tax collected on receipts and invoices for reference
Automatically apply the suggested tax to web and POS orders, based on Place of Supply Rules- especially helpful for interprovincial delivery and wire orders.

Attention Quickbooks Interface users! Canada Tax feature currently can not be enabled if your shop is using the Quickbooks integration. Further work needs to be done to ensure these two features work together. You may disable the Quickbooks integration if you prefer to use Canada tax, but both may not be used at this time. We aim to have both working together nicely Q4 2020.

TABLE OF CONTENTS

Overview
Taxation Examples
- Taxations Examples for Local Delivery Orders (Orders placed and delivered by the same shop, even if interprovincial)
- Taxation Examples for Wire Out Orders
How to Setup Canada Tax Feature
HST, GST & PST Displayed on Order Totals and Reports

Overview

In Canada, tax is applied according to the Place of Supply rules which state tax applies based on location of delivery for delivery orders, or location of shop for pick-up and taken orders.

Orders delivered to Canadian addresses will apply tax based on province of delivery. Wire Out orders to outside of Canada will apply 0% tax on product+delivery and tax the wire service fee with rates applicable to shop's province. For those rare cases of local delivery orders outside of Canada, no tax applies.

You are responsible for ensuring appropriate taxes are collected on each sale no matter what the Floranext system may apply as default. If any questions, please contact the Canada Revenue Agency or trusted advisor.

Floranext makes every effort to aid in automatically applying the appropriate tax, but is not responsible for incorrectly taxed orders. Here is a general chart explaining basic rules of tax application that are set in Floranext for when the Canada tax schedule is enabled.

Taxation Examples

Taxations Examples for Local Delivery Orders (Orders placed and delivered by the same shop, even if interprovincial)

For example, if a shop in Manitoba (Province A), at the border of Ontario (Province B), has an order they will be delivering to an address in Ontario (Province B), then the HST of Ontario is applied to the product and delivery of the order.

If a shop in Ontario (Province A) is delivering an order to the U.S., then no tax is applied.

Shop Location		Delivery Location	Tax Based on	Detail
Province A	delivers to	Province A	Tax of province A	HST, or GST+PST as applicable
Province A	delivers to	Province B	Tax of province B	HST or GST as applicable, no PST
Province A	delivers to	USA	No tax	Tax is zero-rated
U.S.A.	delivers to	Province A	US Local Sales Tax	Tax not sent to filling florist in Province A

Taxation Examples for Wire Out Orders

For example, if a shop in Manitoba (Province A), wires an order to Ontario (Province B), then Ontario's HST applies to product and delivery and Manitoba's GST applies to wire fee.

The shop in Manitoba collects the HST from the customer, then passes it to shop in Ontario and reports the HST collected as Input Tax Credit. The shop in Ontario is actually paying the HST.

Shop Location		Delivery Location	Tax Based on	Tax Collected by Sending Florist	Tax Collected by Filling Florist
Province A	wires to	Province A	Tax of province A	HST, or GST+PST applies to product, delivery and service fee. Taxof service fee payable by sending florist.	Total of product + delivery with tax is given to filling florist. Service fee is retained by sending florist. Tax on product + delivery payable by filling florist.
Province A	wires to	Province B	Product + Delivery applies Tax of province B Wire Fee applies tax of Province A	HST or GST, as applicable, no PST. Applies to product and delivery. HST or GST+PST applies to service fee since service is used at sending florist location. Tax of service fee payable by sending florist.	Total of product + delivery with tax is given to filling florist. The service fee is retained by sending florist. Tax on product + delivery payable by filling florist.
Province A	wires to	U.S.A.	Product + Delivery is 0% Wire Fee applies tax of Province A	Tax is zero-rated for product and delivery. Tax applies to Service Fee based on address of customer and is payable by Province A	No tax collected or paid by the U.S.A. Shop
U.S.A.	wires to	Province A	U.S.A. Sales Tax	Tax not sent to filling florist in Province A	U.S.A. shop collects and pays tax only. Tax is zero-rated.

How to Setup Canada Tax Feature

1. Navigate to

- Settings ➜ Tax Rate ➜ Advanced

- Set Tax Schedule to Canada

- Save

2. Select Default tax rate (This should be the province the shop is located)

HST, GST & PST Displayed on Order Totals and Reports

Take Order

Order Total section should show tax rates applied with tax rate name and percentage.

Please Note: Tax applies to both delivery and products. There is no option to not tax delivery.

Daily Sales Report

A break-down of tax collected, by type now shows at the top of the Daily Sales Report Summary.

Unclassified Taxes are those recorded before Canada Tax was enabled.

Invoice

On the invoice, there is now a breakdown of the tax applied to the order.

Receipt

The customer's receipt now shows a breakdown of the tax percentages.

NOTE: Per Stripe's refund policy, the credit card processing fee will not be refunded to the Stripe account holder if a payment is refunded.